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YOUR PERIODIC UPDATE FROM BOZZUTO CONSTRUCTION

 

FROM THE DESK OF
Spring 2015

In the Washington Business Journal article from February 5th by Michael Neibauer, “The MGM effect: Massive National Harbor project may drive up contracting costs for all”, Neibauer reports the reasons for increased construction costs up to 4.5%. Below is my brief response to that article.

In short, qualified subcontractors have several valuable resources, such as equipment, materials, warehouse space, and most importantly, quality workers. The truth of the matter is, there are more projects under construction than enough skilled labor. Therefore subcontractors are limited in how much work they can commit to, are in a position to inflate prices, and are able to be more selective with the projects they take on.

We have experienced construction cost increases well in excess of 4.5%; specifically 13% for multifamily projects in the past 12 – 18 months.  The 4.5% referenced by Neibauer may be accurate for large-scale commercial projects due to this sector’s very slow recovery from the great recession and reduced government spending, especially in the Washington metropolitan area.

Unfortunately, I do not predict we will see a notable decrease in construction costs in the short term. However, I do predict that rate of this unsustainable inflation will slow dramatically within the next 12 months. In the meantime, we will continue to work with our customers to mitigate the impact of inflation through innovative value-engineering solutions.

 

Mike Schlegel  |  President, Bozzuto Construction | mschlegel@bozzuto.com

 

 

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GET TO KNOW

 

Craig Miller
Preconstruction Manager, Bozzuto Construction Company


Please describe your role at Bozzuto Construction Company in your own words.
I work with clients during the preconstruction process—from feasibility through construction documents—to help plan a project that meets their desires, and works within their budget and schedule constraints.

How did you become interested in the industry?
I came to the construction world from the House of Representatives. At the time, I knew very little about construction, but studied physics in college and liked putting things together. A friend suggested I visit some folks at Bozzuto for an “informational” meeting. That was nearly 10 years ago—it was a good fit!

What do you enjoy most about working at Bozzuto?
I enjoy the variety of projects that Bozzuto takes on, both for external clients, and for our internal development company. I’ve been able to work on projects ranging from luxury concrete high-rise, to non-combustible assisted living/memory care, to wood-framed seniors apartments. I’m grateful for the experience this diversity has afforded.

Tell us about a personal achievement that makes you proud.
I’m very proud of the three kids my wife and I are raising. It’s a joy to see their unique personalities develop, their love for learning about the world they live in, and their growth in caring for others (starting with their siblings!).

Tell us about someone that inspires you; personally or professionally.
I’ve loved watching my parents enter retirement in the last 5 years. They’re certainly finding time for themselves—traveling the world, and visiting grandchildren. However, their faith motivates them to spend much of their time working with nonprofit groups in my Indiana hometown. None of this work is glamorous, but it is meaningful, and I’m grateful for their example.

What do you like to do in when you’re not working? Any hobbies?
I love to build custom furniture, when I can find time. At this stage in life, complex pieces can take many months to complete though!

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IN THE NEWS

 

The Springs Groundbreaking

On March 11, Arlington Partnership for Affordable Housing (APAH) celebrated the groundbreaking for The Springs Apartments.  Bozzuto Construction is the general contractor for the project and was honored to participate in the celebration.
 
“Arlington County has lost 13,500 apartments that were once affordable to low income households primarily due to rent increases, according to the Arlington Affordable Housing Study,” said Arlington County Board Chair Mary Hynes. “The Springs will help meet this dire community need.”
 
The community will provide six market-rate apartments, 51 apartments affordable to low income households, and 47 apartments affordable to very low-income households.  Congratulations to The Springs team!

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PROJECT SPOTLIGHT

 

Village at Valley Forge  

King of Prussia, PA—the largest new construction residential project Upper Merion Township of Pennsylvania has seen in over 20 years, Indigo 301 is Bozzuto’s first project under construction within the extensive “Village at Valley Forge” development. This future mixed-use community is located in the heart of King of Prussia, PA. The development includes parcels for health care, retail, office, and a variety of residential use types. Less than 30 minutes away from the city of Philadelphia, this development has easy access to Interstates 76 and 276, as well as routes 422, and 202. It is also located across the street from the King of Prussia Mall, one of the largest shopping centers in America.

Indigo 301 will contain 363 new apartment units.  The mid-rise residential building wraps three sides of a 196,999 SF pre-cast parking garage containing approximately 580 spaces. Amenities include three luxurious and beautifully landscaped courtyards. The central courtyard includes an outdoor gourmet kitchen and swimming pool. There is a fitness center with state-of-the-art equipment and yoga area. Residents will be able to relax in the clubhouse and library or entertain in the great room which includes a kitchen and bar area for private and community events. Residents can also enjoy access to state of the art technology in the e-lounge or can work on improving their golf game in the golf simulator.  Indigo 301 is a pet friendly community and will have a dog park available for resident to enjoy with their four-legged friends. The property will also be 100% smoke-free and has an environmentally friendly design which will meet the NGBS Bronze certification.

Owned by Northwestern Mutual Life Insurance Company and designed by KTGY Group, Inc. of Tysons, VA, Indigo 301 is being developed by Bozzuto Development, constructed by Bozzuto Construction, and will be managed by Bozzuto Management.

Bozzuto Construction broke ground on the project in December 2014, with final completion expected by the end of 2016.


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UPCOMING EVENTS


Delta Associates Philadelphia Market Overview & Awards
April 21, 2015; Philadelphia, PA—Join Bozzuto and other multifamily specialists at the Four Seasons in Philadelphia, PA on April 21st for Delta Associates’ Third Annual Apartment Market Overview and Awards of Excellence. The event offers trade professionals the latest on the Philadelphia market, including a presentation on local trends and prospects, delivered by Delta Associates founder, Gregory H. Leisch. To learn more, click here.
 

ULI Washington Real Estate Trends Conference
April 28, 2015; Washington, DC—Come see the Bozzuto Construction team on April 28th at the 2015 ULI Trends Conference in Washington, DC at the Ronald Reagan Building. While you are there, tap into local expertise by taking advantage of the conference’s networking opportunities and thought-provoking discussions. Also be sure to attend ULI Washington’s Inaugural Real Estate Trends Conference Awards program. To learn more click here.

 

Affordable Housing Conference of Montgomery County (AHCMC)
May 4, 2015; Bethesda, MD—Join Bozzuto Construction Company at the 24th Annual AHCMC Housing Summit on Monday, May 4th. From educational sessions to engaging panels, this conference provides chances to learn and gain insight from leaders and professionals across multiple industries. For more information about this AHCMC event, click here.

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