Tenant Improvements in a Post Pandemic World
The Covid 19 pandemic left an indelible mark on our memory of the years 2020 and 2021. It nearly ground our economy to a halt. And now that we are returning to “normal,” we are left to navigate a world that appears to be forever changed.
Our company performs tenant improvement work throughout Southern California. Our work takes us to various cities and counties, and we have more business licenses than I would care to count. We complete roughly 300 projects a year, ranging from 4-figure contracts to 8-figure contracts. Because we work in a scenario where landlords lease space to tenants, timing is crucial to our success. Missing a deadline creates problems for both the landlord and the tenant. Simply put, it is “not an option”. So when the world stopped in 2020 we were especially concerned about how to complete the work we had in process. We survived due in large part to our employees who wanted to work. And our clients who worked with us to keep the projects moving forward.
As consumers, we all felt the sting of the supply chain disruption. Our industry was not immune. Construction materials that pre-pandemic would take several weeks to get now took several months. As the world recovered from the pandemic these excessive lead times improved but have yet to make it back to ‘normal’. Take for example wood doors. Pre-pandemic the lead time was generally 4 to 6 weeks. Post pandemic – now 10 to 12.
Any realistic construction schedule must take into account material lead times. Using the doors as an example, if we have a construction duration of 10 weeks, we simply must get the door order placed before we start construction. Then monitor the door order throughout the process just to stay ahead of any surprises.
Across the construction industry, the managing of lead times has become a higher priority. Electrical gear that once took 8 to 12 weeks to obtain now takes 8 to 12 months. A/C equipment that took 4 to 6 weeks to obtain now takes 12 to 16 weeks. Light fixture lead times haven’t been the same since 2014 when the building codes changed to drive us all toward LED fixtures. Clearly, lead times can wreak havoc on a construction schedule. Perhaps the most frustrating post pandemic reality is the local building departments. On the positive side, the pandemic pushed local governments into a more digital process. Prior to the pandemic, most cities required hard copy building plans with design professional’s wet signatures. Further, the cities that would accept fee payment by credit card were rare. The reality of the pandemic forced the local governments to step into the digital world when it came to construction plan management and to accept digital signatures as a way to minimize contact with the individuals that they served. The plan check durations were extended, just like everything else, except the ‘return to normal’ seems muted. Pre-pandemic the plan check process would take 4 to 8 weeks for a typical office build out. Post pandemic – 8 weeks seems like a miracle. It appears that the steps such as digitization that would normally bring added efficiency have been offset by reduction in output by the local building departments.
Certainly the world will never be the same. And managing a tight construction schedule requires more effort and focus. Be sure to choose your team wisely and stay on top of delivery schedules.