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Winter 2013

Apartments are shrinking! The average apartment size Bozzuto Construction Company (BCC) built between 2008-2010 was 960 sq. ft. Today, of the 4,100 units we have under construction, the average size is 866 sq. ft. The reduction in apartment size has occurred as a result of a variety of reasons including; demographic trends, unit mix, and of course, costs. We are now seeing significant inflation in the cost to build multi-family housing (more on that in the next newsletter), however, reducing the apartment square footage is not the cure-all you might expect. Let me show you a pretty dramatic example.

Reducing an apartment from 850 net rentable sq. ft. per unit to 650 net rentable sq. ft. per unit will likely result in a reduction of construction hard costs of $10k-$20k per unit (depending upon whether or not it is a concrete or wood frame building). Assuming a total replacement cost of $300k per unit for a high-rise or $200k per unit for a mid-rise, this would only result in a 5-7% increase in your return on costs (e.g. an 8% return would become approximately an 8.5% return on costs). But this assumes you get the same rent for a 650 sq. ft. unit as you would for an 850 sq. ft. unit!! Not likely.

The reason for only a disproportionally small reduction in construction costs is that kitchens, bathrooms, lobbies, corridors, and amenity spaces are the most expensive part of any project. Reducing square footage in an apartment often occurs in the middle of the living room or bedroom – the least expensive spaces to build.

So - I would not reduce apartment sizes simply to reduce cost. The decision must be driven by other factors as well. For instance, if your site is FAR constrained, reducing unit size could yield more units. Demographic trends could also be a driving factor. As the economy improves, more people may prefer to live by themselves instead of with a roommate, which will increase the number of smaller one bedroom units in demand.

Mike Schlegel | President, Bozzuto Construction |

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Mark Weisner

In 2012, Bozzuto Construction Company (BCC) restructured its organization to bring together its estimating and pre-construction services under one roof. With this centralized structure, the pre-con team is now better equipped to share knowledge and resources and now are more efficient and effective – ultimately, enabling them to be better team for clients.

Mark Weisner, Director of Pre-construction, is responsible for the overall leadership of the department. He provides insight and recommendations on site planning, schedules, design and document reviews, budgets, and bid pricing prior to the start of construction. Mark’s main focus is meeting clients’ financial and quality goals.

Mark has been with Bozzuto since 2005, most recently serving as a Project Executive for vPoint, a 116-unit mixed-use high-rise apartment community in Arlington, VA. His wide range of experience in construction bodes well for clients in a multitude of construction types and materials, across all product types. An architect recently stated, "Mark knows more about apartment construction than anyone I've ever met in construction."

If you have any questions for Mark or would like to learn more about our pre-construction services, do not hesitate to contact him at

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$50,000 Donation to Montgomery Housing Partnership

About a year after starting The Bozzuto Group in 1988, Montgomery Housing Partnership (MHP) approached Bozzuto, needing help with a development named Dring’s Reach. Bozzuto Development helped design the community with Bozzuto Construction Company carrying out the building of the project. With that project began a long standing partnership and Bozzuto and MHP have been working together ever since.

In celebration of The Bozzuto Group’s 25th Anniversary this year and to commemorate this mutually beneficial partnership - Bozzuto decided to do something special to recognize this relationship. In efforts to support MHP’s continued leadership and dedication to providing affordable housing in Montgomery County, Bozzuto made a $50,000 donation.
Additionally Bozzuto has pledged to contribute $5,000 each year for the next five years to support MHP’s Annual Giving Program. We know these funds will be put to good use by MHP as it approaches its 25th year in business as well. Bozzuto and MHP partnership will only continue to flourish and we look forward to the future together.

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IN THE PRESS Bozzuto Construction Eyes $350M Pipeline for 2013
December 12, 2012

Bozzuto Construction Co. anticipates putting more than $350 million to work in 2013, according to its president Mike Schlegel. "2014 looks very positive as well," he tells In fact, he says, the company is very bullish about the next decade. "While there may be some temporary overbuilding in this market…the long term demographic forecast is outstanding for mixed-use / multifamily."

Schlegel made his comments after the company announced four development deals totaling $107 million. The projects include Petworth Safeway in Northwest DC, Pollin Memorial Community Development in Northeast DC, Kingsview Village Apartments in Germantown, MD, and Tyler House Apartments in Northwest DC.

The Petworth Safeway & Residences development will include an urban concept Safeway retail store, two levels of below-grade parking and five levels of apartments. The $40 million, 218-unit community is being developed by Duball, LLC and is designed by architect Torti Gallas and Partners. The project is expected to deliver in Summer 2014.
MetroTowns at Parkside, also known as The Linda Joy and Kenneth Pollin Community, is a $19 million construction contract for Enterprise Homes. It is designed by architect Torti Gallas and Partners. It is expected to deliver in early 2015.

Kingsview Village Apartments is a 195-unit, $20 million garden-style community developed by Pleasants Development, Inc. and designed by Heffner Architects. Construction is scheduled to begin in January 2013 and anticipated to deliver in Spring 2014.

The Tyler House Apartments is a 284-unit affordable housing community located at the southwest intersection of North Capitol Street and New York Avenue in Washington, D.C. The renovation will come to $28M million.

"The environment is terrific if you are a contractor specializing in mixed use/multifamily projects," Schlegel says. "While other market segments are starting to recover like retail, office and hotel, the recovery has not been as productive as our market segment." That said, he continues, "we are starting to see significant inflationary pressure from our subcontractors and suppliers. I predict that we will see the cost to build multifamily projects to increase 7-10% in 2013."

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Garfield Park

Bozzuto Construction Company recently completed construction of Garfield Park, a $28.5 million mixed-use community located on the corner of 10th Street and Washington Boulevard in Clarendon, VA. Built for developer/owner Ironwood Realty, Garfield Park consists of 149 wood-frame apartment units, 2,000 square feet of retail, 1,900 square feet of live/work units, two levels of below grade parking with 280 spaces, and a podium concrete transfer slab with wood framed construction above.

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Working with GCPay has provided Bozzuto Construction Company (BCC) with a seamless online billing program to manage subcontractor payments. The benefits include less paperwork, more timely and accurate monthly requisitions creating a more efficient and consistent billing process.

What is GCPay?
GCPay is a third party, web-based portal that BCC utilizes for their subcontractor billing process. GCPay allows BCC to accept and approve subcontractors’ original schedules of values, payment applications, change orders, lien waivers, and other construction documentation in an electronic format.

How does Bozzuto Construction use GCPay?
All subcontractors hired by BCC are required to use GCPay as the method for submitting monthly pay applications. Subcontractors enter and submit original schedules of values, change orders, and pay applications via the website. BCC’s project teams then approve the submissions via the GCPay website. Since CGPay is online, the project team can access it from any location with an internet connection.

How does GCPay benefit Bozzuto Construction’s clients?
GCPay expedites the billing process, saving BCC and their subcontractors time and money. Less time is spent checking for math and form errors, handling paper and requesting paperwork, leaving more time for the team to focus on building the project on time and under budget.

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ULI Washington Trends Conference

ULI Washington 2013 Real Estate Trends Conference
April 10, 2013

Visit Bozzuto Construction Company for ULI Washington’s 16th Annual Real Estate Trends Conference at the Ronald Reagan Building and International Trade Center. As always, this conference will be a prestigious one-day event that provides an opportunity to connect with an unprecedented number of leaders in the real estate and land use marketplace.
This year the Trends Conference is changing its format – providing each attendee with options to choose specific sessions of interest to them – including more exhibitors to highlight the best of the Washington real estate market.

The theme of the conference is LifeCycles in the New Economy – People and Places. Panels will focus on demographics from the Millennials to the Baby Boomers, to how office, housing and retail are changing to accommodate those demographic shifts.

Why You Should Attend
  • The Trends conference features 10 sessions that will bring you up to date on the most compelling issues affecting real estate development in the Washington region.
  • Take advantage of the additional networking opportunities with the new format this year (more details soon).
  • Experience the “Developers Showcase” offering the chance to meet the brightest minds behind the projects featured
  • Catch up with Bozzuto Construction Company!

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