Construction Cost

Major economic indicators point to healthy growth for the remainder of 2015. Non-residential construction spending has rebounded nearly 50 percent from its most recent bottom in 2011, with a total volume growth of 17 percent in 2014. Year-over-year growth is currently 21 percent. Though commodity and energy prices were lower in the first quarter of 2015, the construction sector is nearing full employment, which will drive significant wage increases regionally.

Using a phased, core-and-shell strategy to construct the 310,000-gsf Life Science Laboratories (LSL) building allowed the University of Massachusetts Amherst to obtain high-level research space and take advantage of the competitive bid market and economic incentives available in 2010. The approach also provided economies of scale and the advantage of postponing programming and occupancy decisions with subsequent fit-outs.

Iowa State University's transgenic swine facility at Zumwalt Station Farm in Ames received an Award of Distinction from the Modular Building Institute in May of 2015. The 2,904-sf project was designed, manufactured, and installed by Art's Way Scientific. Supporting research on the genetic modification of domestic animals for agricultural and biomedical applications, the standalone facility incorporates biosafety features to protect a closed herd of swine.

Mercy Health System will open the $465 million Mercy Hospital Joplin in March of 2015 in Joplin, Mo. Replacing St. John’s Mercy Regional Medical Center, which was demolished by a tornado, the new hospital was delivered in just 46 months by McCarthy Building Companies using Building Information Modeling (BIM). Completed under budget and in less than half the time of a conventionally built facility, the 890,000-sf Mercy Hospital Joplin comprises a nine-story inpatient tower and a five-story clinical tower.

BluVue announced the release of BluVue Plans 2.0 for iOS and Android in February of 2015. The app allows project teams to have mobile access to current construction plan documents, eliminating the risk of building off of outdated drawings. BluVue Plans also helps construction teams collaborate efficiently on project drawings, giving them the power to view, mark up, and share plans.

Procore Technologies launched a new file storage and synchronization application for construction management in January of 2015. Procore Drive allows teams to share and collaborate on large files without the impediments of FTP clients or other cumbersome file sharing solutions. Designed to increase project efficiency by streamlining communication, the application delivers the speed, security, and scale required by enterprises to collaborate between mobile devices, laptops, and desktop computers.

The $623 million Saint Joseph Hospital opened in Denver in December of 2014. The 831,000-sf facility was built by Mortenson Construction using modular construction methodology, resulting in a savings of 72 work days and $4.3 million, according to a University of Colorado Boulder study. The 400-bed facility features entirely private inpatient rooms, advanced diagnostic imaging suites, and spacious operating rooms. The hospital is owned by SCL Health and jointly operated with National Jewish Health.

Sustained growth over the past 18 months has pushed new construction prices above the long-term trend line for the first time since 2009, according to third-quarter economic data. Capital construction prices are now trending at an annual escalation rate of 4 to 8 percent, depending on region, with northeastern and southern states showing the greatest increase. Regional labor demand is also driving up project bids in midwestern states.

Renovating or repurposing older buildings on college and university campuses is a cost-effective, sustainable, and efficient way to modernize or add program space, with the advantages of less time to completion and occupancy, fewer site planning challenges, and preservation of historic campus buildings. This approach also maximizes financial accountability and return on investment in a time of tight budgets and reduced federal funding, which requires academic institutions to depend more heavily on state support and creative funding streams, such as public/private partnerships.

Lahey Hospital is planning a $60 million expansion of its academic medical center campus in Burlington, Mass. Designed by FreemanWhite and built by Suffolk Construction, the 190,000-sf facility will provide a new emergency department as well as mechanical areas and shell space to accommodate future growth. The project will be delivered using Model-Based Estimating and Lean construction methodologies. LEED Silver sustainable design certification will be sought for the facility, which is slated for completion in spring of 2017.

With careful planning, institution-wide involvement, and innovative thinking, sustainability goals for science, technology, engineering, and math (STEM) facilities can be met by renovating and remodeling instead of more expensive new construction, without compromising the educational mission.

Data from first quarter 2014 shows a steady increase in construction labor utilization for the first time since 2007.  The latest figures show a year-over-year increase in construction employment in all but five states. However, non-residential construction spending remains sluggish at an average growth rate of 4.6 percent since the bottom in 2011. Forecasts call for a continued dollar volume growth of approximately 8 percent for 2014, which will build on the 4 percent increase in 2013.  

Microelectronics manufacturer Entegris completed construction in July of 2014 on the $30 million i2M Center for Advanced Materials in Bedford, Mass. An existing building was renovated to create an 80,000-sf R&D facility housing cleanrooms, labs, production and assembly space, and offices. BIM (Building Information Modeling) was leveraged in the delivery of the the project, which included installation and coordination of new building systems for HVAC, electrical, fire protection, gas detection, and laboratory utilities.

A multi-tenant biomedical research and laboratory building is poised to become a powerful economic driver in El Paso, Texas, thanks to an innovative public-private partnership between the Medical Center of the Americas (MCA) Foundation, the City of El Paso, and a diverse group of investors and committed tenants. Construction has not yet begun on the building, called the Cardwell Collaborative, but key stakeholders—such as the city’s public health department, Texas Tech University, and the University of Texas at El Paso—have already snapped up master leases.

The American Institute of Architects has announced the release of seven updated design-build contract documents. Building on the core strengths of the 2004 edition documents while enhancing the early interaction between the owner and the design-builder, the 2014 Design-Build documents call for clearly defined and mandated owner’s criteria for the project and require the submission of a preliminary design by the design-builder.