An­nual Con­struc­tion & De­sign Sur­vey shows con­tin­ued pickup in projects, with many go­ing for­ward on a smaller scale

Modern Healthcare - - SPECIAL FEATURE - An­dis Robeznieks

The health­care con­struc­tion in­dus­try is com­ing back, but it’s a come­back with a dif­fer­ent look— smaller projects and an in­creas­ing fo­cus on out­pa­tient care, ac­cord­ing to Mod­ern Health­care’s 33rd an­nual Con­struc­tion & De­sign Sur­vey.

Par­tic­i­pa­tion in the sur­vey de­creased this year, with 173 com­pa­nies com­plet­ing sur- veys com­pared with 196 in 2011 and 186 the pre­vi­ous year, but that trend could re­flect con­sol­i­da­tion in the in­dus­try. For ex­am­ple, ar­chi­tec­ture firms An­shen & Allen and Burt Hill are no longer listed sep­a­rately on the sur­vey as both are now part of U.S. op­er­a­tions for Stan­tec, a multi­na­tional con­struc­tion gi­ant.

One com­pany whose busi­ness moved some­what op­po­site of the pre­vail­ing trend was Gil­bane Build­ing Co., which fin­ished sec­ond on the list of con­struc­tion man­age­ment com­pa­nies af­ter reg­is­ter­ing a nearly 109% in­crease in dol­lar vol­ume and a 114% jump in con­struc­tion vol­ume. Last year, it com­pleted the 1.2 mil­lion-square-foot Fort Belvoir Com­mu­nity Hospi­tal on a U.S. Army base in Virginia and the new 850,000-square-foot Elmhurst (Ill.) Me­mo­rial Hospi­tal in the Chicago sub­urbs.

“We had a lot of large projects last year,” says Brian Gar­becki, a Gil­bane vice pres­i­dent. “Some of the smaller projects went away (dur­ing the re­ces­sion), but the large projects kept go­ing.”

Un­like res­i­den­tial and re­tail con­struc­tion, it was pre­vi­ously be­lieved that once a health­care con­struc­tion project got rolling, work didn’t stop un­til it was com­pleted. The re­ces­sion changed that.

For the past three years, Mod­ern Health­care’s sur­vey has been track­ing work stop­pages—num­bers that have been steadily im­prov­ing since 2009.

In 2011, among the com­pa­nies par­tic­i­pat­ing in the sur­vey, 67 (or about 39%) re­ported be­ing in­volved with a project where work was stopped or post­poned. In all, they said worked stopped on 244 projects in 2011, but re­sumed on 72 of those projects by year’s end. Also in 2011, re­spon­dents re­ported that work had re­sumed on 67 projects where it had stopped in 2010.

“Some of the projects that went on hold came back slightly smaller—but with room to ex­pand and be more flex­i­ble,” Gar­becki says.

In last year’s sur­vey, 91 com­pa­nies (46%) re­ported hav­ing projects stop or stall in 2010. In all, they said work stopped on 314 projects in 2010, but re­sumed on 98 of those projects be­fore the year was over. Also in 2010, re­spon­dents re­ported that work re­sumed on 105 projects where it had stopped in 2009.

Not sur­pris­ingly, the worst num­bers are from 2009 when 116 com­pa­nies (62% of those sur­veyed) re­ported they had projects stall. In all, they said work stopped on 575 projects in 2009, in­clud­ing 135 that restarted later that year.

An­drew Quirk, se­nior vice pres­i­dent for Skan­ska USA, says “a right-siz­ing of build­ings” is tak­ing place as these projects come back with re­vised plans that are mi­nus the huge atri­ums, foun­tains and other “nice fin­ishes” that have been erased from their orig­i­nal designs.

“Ev­ery dol­lar is be­ing scru­ti­nized and a re­turn is ex­pected on ev­ery dol­lar,” Quirk says, although he adds that clients are ask­ing for “shell space” to be in­cor­po­rated into designs to ac­com­mo­date fu­ture growth or new tech­nol­ogy.

Dur­ing the re­ces­sion, he says Skan­ska made sure clients had the money needed to fin­ish projects be­fore sign­ing on to do the work.

“We took a step back and we al­most in­ter­viewed clients as much as they in­ter­viewed us,” Quirk re­calls. “We had to walk away from a few projects and that re­ally helped us in the long run.”

Skan­ska, which fin­ished No. 5 among the con­struc­tion man­age­ment firms par­tic­i­pat­ing in this year’s sur­vey, ex­pe­ri­enced less than 1% growth in dol­lar vol­ume and a 10% drop in con­struc­tion vol­ume com­pared with 2010. Still, Quirk was op­ti­mistic that bet­ter days are ahead.

“We had a pretty good 2011 con­sid­er­ing the mar­ket and health­care in gen­eral,” he says. “We ex­pect our con­struc­tion and dol­lar vol­ume to in­crease be­cause we had our best year ever in sales.”

That op­ti­mism pre­vails even though Quirk pre­dicts projects will con­tinue to shrink, and where $250 mil­lion was once typ­i­cal for hospi­tal con­struc­tion projects, he says that has de­creased to $100 mil­lion and adds that this will likely fall fur­ther and that $50 mil­lion to $75 mil­lion will be the new nor­mal.

There are still ma­jor projects out there, how­ever, and Skan­ska is work­ing on two of

them: The $248 mil­lion, 95-bed Ne­mours Chil­dren’s Hospi­tal in Or­lando, Fla.; and the Univer­sity Med­i­cal Cen­ter com­plex in New Or­leans, where Skan­ska was awarded a $680 mil­lion con­tract in a ven­ture with MAPP Con­struc­tion to build a 560,000square-foot, 424-bed hospi­tal. The project in­cludes a 747,000-square-foot di­ag­nos­tic and treat­ment cen­ter, a nearly 256,000square-foot am­bu­la­tory-care build­ing and other fa­cil­i­ties that are sched­uled for com­ple­tion in 2014.

Lo­cated in Or­lando’s Lake Nona med­i­cal-city com­plex, Ne­mours Chil­dren’s—which won a ci­ta­tion award in Mod­ern Health­care’s 2011 De­sign Awards (Sept. 26, p. 27 )—is ex­pected to open this Au­gust.

“That’s a neat hospi­tal,” Quirk says. “They’ve done some in­no­va­tive things to lower the anx­i­ety level of kids and fam­ily com­ing to the hospi­tal.” This in­cludes us­ing tech­nol­ogy that alerts staff to the ar­rival of reg­u­lar vis­i­tors and iden­ti­fies them so staff can greet them by name.

Mock-up rooms were built to test the lay­out of the fa­cil­ity, which in­cludes hav­ing chil­dren lie on beds to make sure the tele­vi­sion and video-game sys­tem had the proper sight­lines and con­trols were con­ve­niently lo­cated.

Quirk says that dur­ing these tests, one child was asked, “What do you think of the gar­den?” and the child replied, “What gar­den?” The re­sponse led to a low­er­ing of the win­dow sills to make sure young pa­tients

by con­struc­tion phase in 2011

had ad­e­quate views of the out­side world from their beds.

An­other no­table chil­dren’s hospi­tal project is the $1 bil­lion, 104-bed ad­di­tion at Stan­ford Univer­sity Med­i­cal Cen­ter’s Lu­cile Packard Chil­dren’s Hospi­tal in Palo Alto, Calif., where DPR Con­struc­tion is the gen­eral contractor. Fin­ish­ing sev­enth among the gen­eral con­trac­tors re­spond­ing to this year’s sur­vey, DPR re­ported an al­most 50% drop in dol­lar vol­ume and an al­most 27% drop in con­struc­tion vol­ume.

“Next year, our num­bers will prob­a­bly be back up to where they were in 20092010,” says Hamil­ton Espinosa, DPR’S na­tional health­care leader. “It’s not like we’re not busy.”

Last Septem­ber, DPR com­pleted the first phase (and it re­cently won the con­tract for the sec­ond phase) of the Ban­ner MD An­der­son Can­cer Cen­ter in Gil­bert, Ariz.; in Oc­to­ber it placed the last beam in a top­ping-off cer­e­mony at the $1.5 bil­lion UCSF Med­i­cal Cen­ter at Mis­sion Bay com­plex in San Fran­cisco, which will in­clude a 183-bed chil­dren’s hospi­tal, a 70-bed can­cer hospi­tal and a 36-bed women’s spe­cialty hospi­tal when it opens in 2015; and just last month it topped off the $300 mil­lion Alta Bates Sum­mit Med­i­cal Cen­ter Pa­tient Care Pav­il­ion in Oak­land, Calif., sched­uled to open in 2014.

“It’s been a good turn­around in the mar­ket­place,” Espinosa says. “It seems peo­ple are fi­nally re­leas­ing some cap­i­tal and do­ing some work.”

The num­bers were way up for the No. 2 or­ga­ni­za­tion among the de­vel­op­ment com­pa­nies re­spond­ing to this year’s sur­vey, Jones Lang Lasalle, which saw its dol­lar vol­ume jump nearly 200% and its con­struc­tion vol­ume in­crease 114%.

Shawn Janus, man­ag­ing di­rec­tor of health­care de­vel­op­ment for the Chicagob­ased com­pany, cred­its the in­creases to the

The $248 mil­lion, 95-bed Ne­mours Chil­dren’s Hospi­tal is sched­uled to open in Au­gust. The fa­cil­ity is part of a med­i­cal-city com­plex in Or­lando, Fla.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.