In this episode we explore the week’s top headlines as well as a massive mixed-use project in northern Virginia.

For links to the original articles referenced in this episode:

www.pressdemocrat.com/business/97153…corps-training

www.technologyreview.com/s/611141/ai-…cident-free/

www.constructiondive.com/news/hilton-…otel/557154/

www.metrocommercial.com/news/mixed-us…g-this-trend/

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To learn more about affiliated projects and contacts for Kettler Inc, Suffolk Construction, North Bay Construction or any of the other names we dropped on the podcast, sign up for a free trial or log into your account at www.constructionwire.com/Free

Transcript

Luke O’Brien:                Hello, listeners, and welcome to the second episode of the Construction Wire podcast. The Construction Wire podcast, again, is a podcast that twice a month, takes the blue pencil to the biggest news in the construction market and makes it accessible to you. I’m your host, Luke O’Brien, and as always, this podcast is made possible by Build Central, the Chicago-based front runner in construction market research whose data keeps you ahead in the game and knowledgeable of every opportunity available, whether you are a vendor or supplier, contractor or developer.

Luke O’Brien:                Today, we have an amazing show for you. We will, again, be featuring a favorite segment of ours called the mega map, in which we allot time enough to take a brief, but deep dive into some of the more ambitious construction projects going on in the United States right now. Last time, we visited the Otay Mesa neighborhood in San Diego in order to get a look at the early planning stages of the Lumina project being spearheaded by ColRich, the San Diego based residential real estate company. And this week we’ll be headed to Virginia, the cradle of the nation in order to get a look at what is going on with what is simply being called the Mile. But before all that we at Build Central thought it would be worthwhile to catch you up, listeners, on what has been going on in the construction market this week. So we’re going to start this show with a brief recap of this week’s top construction headlines.

Luke O’Brien:                All right, listeners, the first top headline that I’d like to discuss today comes from the Press Democrat news source. I found this article online and the title of the article is North Bay Construction Corp training young people for jobs in depleted construction industry. This article was written by Martin [Espinosa 00:02:05] and it came out June 21st, 2019. And essentially, the long and short of the article is that a North Bay Construction Corp in Sonoma County, California has started a five month training bootcamp regimen in order to train young people to enter the construction industry with a job that could start at $22 an hour. With this specialized training, you’re essentially making twice the amount of the state’s minimum wage, of California’s minimum wage. $22 an hour is a great starting wage for a young person entering a technical trades field like construction.

Luke O’Brien:                And jobs like that are just not available anymore like they once were there. It’s so important to offer incentives like this for young people just for the fact that the industry is not as attractive as it once was to a young person just because they’re not going to be paid enough. To quote directly from the article, if I can find the quote here, Ethan Brown, program manager at the Sonoma County Economic Development Board, said Sonoma county needs about a thousand more residential construction and trades workers by 2025 to keep pace with the area’s current housing development needs. It’s not a dire need, but they certainly need to start hiring more and creating these incentives for young people. And I think North Bay Construction Corp is definitely a leader in that sense. It makes me think back to my own years in high school. I went to a high school that had a strong focus on sending students to college specifically.

Luke O’Brien:                We had advanced placement courses, we had the international baccalaureate program, which out of college looks great or out of high school looks great on a college resume, but if you’re not going to college, as many people in high school that I knew didn’t do, you need to have some sort of technical trades training under your belt to prepare you for the world at large if you’re not going to go to school. So, with advanced placement classes and things like that to make room for a curriculum like that, they took out home ec and they took out shop class. And people weren’t getting the training they needed for the areas of work that they were likely going to end up in. So, bravo for North Bay Construction Corp are creating a training regimen like that. I think it’s fantastic.

Luke O’Brien:                So the second top headline that I have today is definitely more of a fun one. It comes from the constructionequipment.com website. And the title of the article is Can AI Predict Construction Accidents? Unfortunately, the author is not listed on this article. It came out June 19th, 2019, however, and actually this isn’t an original article in and of itself. It’s actually a synopsis of a larger article written by Will [Night 00:05:27] for the MIT technology review. And his article came out June 14th, 2019 and it’s entitled Artificial Intelligence Sees Construction Site Accidents Before They Happen. If you want to read this larger article, you can find it at technologyreview.com, but for our purposes, because we don’t have a lot of time, I’m just going to go ahead and read the synopsis of that article provided by constructionequipment.com at length. I think it’s great.

Luke O’Brien:                To quote, Suffolk, a construction based company headquartered in Boston has been developing a system that makes use of a deep learning algorithm trained on construction site images and accident reports. According to technology review, the system can be put to work monitoring a new construction site and flagging situations that seem likely to lead to an accident. The project, a partnership between Suffolk and SmartBid, a computer vision company, demonstrates the potential for AI enabled computer to track and predict workplace activity. This is especially important for the construction industry, which has adopted other machine learning technology relatively rapidly. A construction site is also one of the most dangerous places to work with a fatal accident rate five times higher than that of any other industry. While the project is designed to improve safety for workers, it is also an example of a much wider trend using AI to monitor, quantify, and optimize work life.

Luke O’Brien:                And I think that’s pretty cool. And if you guys are interested in checking out some of the other projects that Suffolk Construction is involved with at the moment… I took a peek at our database of Build Central and we are currently tracking and monitoring over 60 other projects are featuring work being done by Suffolk. We’re always keeping in touch with them, making sure the project manager’s contact info is available, all that good stuff. I’ll be sure to give you guys a heads up at the end of this episode as to how you can get a piece of that data yourselves.

Luke O’Brien:                Our next top headline comes from the constructiondive.com website. The title of this article is Hilton Opens San Francisco’s First Modular Constructed Hotel. The author of this article was Kim [Slowy 00:07:55] and it was published June 18th, 2019. To quote, the old adage that time is money is particularly true in the hotel business where property owners and franchises are always on a tight schedule and under pressure to start serving guests and generating revenue. This means that well known and new hotel brands alike are turning to non traditional methods of building like modular construction to get the job done. This month Hilton announced that Home2 Suites by Hilton, one of it’s all suites extended stay brands, opened its first hotel built using modular construction in just 16 months and less than a year after modular components arrived at the job site. The 57,000 square foot property located north of San Francisco International Airport is the first hotel built by modular methods to open in the bay area and also a first for the Hilton profile.

Luke O’Brien:                So for those of you who are unfamiliar with what modular construction is, essentially you build a prefabricated unit offsite, away from the construction site, you build multiple of these units to uniformity, and then you ship them all individually to the site, and then essentially stack them on top of each other until the construction is complete. Obviously this is a great way of building a hotel. It is fast, it’s energy efficient, it is cheap, and because the hotel suites are all essentially the same size, it’s quite easy for a modular construction company to create multiple of these units fast.

Luke O’Brien:                I highly recommend you guys go online and check out one of these modular construction build sites, the places where they actually build these units. It’s a pretty incredible site. It’s a huge warehouse. Lots of guys working on lots of units, all in a row. I think it would be Henry Ford’s ideal vision for how one might construct a hotel. It’s essentially mass production of individual units. If you’re interested in checking out another cool modular construction hotel build, the AC hotel that’s in planning right now and it’s going to be starting pretty soon in New York, is a really cool project. I highly recommend you guys check it out.

Luke O’Brien:                Well, that concludes it listeners. There are a few of your curated top headlines from this week. You can expect further compilations of top headlines in future episodes as we will be making it a regular part of our show. But moving on, I’d like to introduce the next segment of our show, the segment that deals with the biggest construction projects going on in the United States right now, is segment called the mega map. In this week’s mega map, we will be examining the newest planned addition to the booming Tyson’s Corner area of Fairfax County, Virginia. This newest development at present being referred to as the mile will permit a maximum of 3,049,000 square feet of mixed use development.

Luke O’Brien:                To quote, Michael Neibauer recent article about the mile and the Washington business journal. The applications for the mile, which have county staff support per age just released report seek to rezone 38.8 acres to permit more than 3 billion square feet of mixed use across 10 new buildings and eight new blocks. Five of the proposed buildings will be residential with supporting retail, four residential, office or a hotel, and one, a retail kiosk. To quote further, the first of the new buildings, the subject of the final development plan, would rise to about seven stories. Offer a maximum of 435 multifamily units and a smaller amount of retail a rendering suggest the coffee shop. The other buildings are conceptual at this time.

Luke O’Brien:                All right every one. To give you a little more background on the mile, our research department here at Build Central first caught wind of this project earlier this month via a proposal submitted to the Department of Planning and Zoning of Fairfax County, Virginia. The applicant for this proposal was the real estate investment trust company, PS Business Parks. And their stated intent of their proposal was to allow for a “Rezoning to the plan Tyson’s Corner urban district to promote mixed use development consisting of 10 new buildings within eight new blocks.” At present the entire proposed area of the mile is currently zoned for 100% office use, so this rezoning is crucial for the mile to be able to move forward. Now just to go a little bit into who the applicant for this project is, remember it’s PS Business Parks. If you’re unfamiliar, who PS business parks are, if you go on their website, they have an about section that gives a little bit of their background.

Luke O’Brien:                And to quote PS Business Parks is a real estate investment trust, or REIT as they’re known, that acquires, develops, owns, and operates commercial properties, primarily multitenant industrial flex and office space. So the company wholly owns over 28 million rentable square feet concentrated in six states. Now, they have partnered with Kettler Inc on this project, a real estate investment firm based in Washington DC themselves. And Kettler is listed on the rezoning application as the development manager for the mile. Now Kettler and PS Business Parks have partnered together in the past. They actually formed a joint venture recently in order to develop a residential building called the high gate.

Luke O’Brien:                And the high gate building is basically located on the existing property that will eventually become the miles. So Kettler Ink and PS Business Parks do have a rapport. And going down the report, we can also see that Sasaki Associates Inc is going to be the master planner for this project. Sasaki Associates is based in Watertown, Massachusetts, and they are an architectural/master planning firm. A fairly renowned one that have done many international projects, they were involved with 401 Congress Street being planned in Boston. They’re going to be doing Bonnet Springs Park in Lakeland, Florida. They’ve done projects in China, so they are going to be the master planner for the mile as well.

Luke O’Brien:                Now, to go a little bit into Tyson’s Corner, the area in which the mile is being proposed, it’s important to note that back in 2008, the Fairfax County Board of supervisors voted to begin what was going to be a 40 year plan to develop an urbanized Tyson’s Corner. And to that end, PS Business Parks and Kettler Inc allocate a section of their 395 page proposal for the rezoning of the mile to what they call the overall vision. And I’d like to quote directly from the overall vision section. “The planning vision for the mile seeks to transform the existing suburban office park into a vibrant mixed use community, interwoven with parks, open spaces and public gathering areas. The proposal will replace the existing mid rise office buildings and substantial surface parking to make far better use of the application property and help transform Tyson’s Corner into the urban environment envisioned by the county.

Luke O’Brien:                The proposal calls for nine new mixed use buildings with extensive public park space. All new buildings east of West branch drive, will have views and access to park space. Several new streets will be constructed to improve vehicular and bicycle circulation at through the application property, as well as provide a grid of streets that can be extended when adjacent properties choose to redevelop. A comprehensive pedestrian network of sidewalks and trails will provide safe and convenient passage for those working and residing in the north central district at Tyson’s. So, judging by this description of the overall vision of the mile, you get the impression that it is really going to be an exceptional community.

Luke O’Brien:                Who wouldn’t prefer a live, work, play residential community dotted with public parks and gathering areas to a normal office park? We also get everything typical of a modern mixed use development included in the mile. They said renderings show a coffee shop, potentially, a new shopping kiosk, new roads that are bicycle friendly, everything that really a millennial individual would want in a community in which they would choose to reside. This style of mixed use community that the mile is chosen to emulate, it’s modern, it’s formulaic almost, it’s something that we’re seeing more and more of.

Luke O’Brien:                And to give you a better idea of what I’m getting at, I’d like to discuss a post that I’ve found on metrocommercial.com. Metro Commercial as an industry leader in retail brokerage. And this particular post of theirs came out on their website on November 29th, 2018 and was made by Kathy Sawin, who is the executive vice of brokerage services at Metro Commercial. And the title of their posts is Mixed Use Developments, a look at what’s driving this trend. And I think a lot of what they discuss here can be viewed directly through the lens of the mile project. Essentially they lay out four main bullet points that really drive home the reason mixed use projects succeed. The first reason is an all important one. I don’t want to detract from that fact.

Luke O’Brien:                Essentially it’s that mixed use developments tend to mitigate risk to investors through a number of avenues, but I’m not going to spend a lot of time right now discussing that particular point first because I think it could be a subject that we would want to look a lot more in depth on in later episodes. And really for our purposes right now concerning the mile project, it is the three proceeding points that are made that are really particular to the mile. So I want to concentrate our efforts on those for now. And the one that I think is most particular is that mixed use provides effective land use in both urban and suburban locations. Remember that Tyson’s Corner, where the mile is being planned, was an area that so warranted revitalization that Fairfax County voted on a 40 year revitalization plan.

Luke O’Brien:                So how best to revitalize an area for the future with a little bit of everything? Mixed use is the answer. To quote from the post directly regarding mixed use in urban areas, “Mixed use developments embrace a challenge in terms of effective land use. This is especially true in dense supply constrained urban markets and is not a new phenomenon. Stacking office and residential above street level retail is ages old. In an urban market it all comes back to that convenience factor, just to hammer it in even more. And to quote further from the article, again, further down, suburban mixed use developments also effectively utilize land by creating urban environments in suburban locations. Not only does this encourage more compact stacking and conserve open space, but they create walkable environments that infuse new life in the communities.

Luke O’Brien:                So the point here is that it is efficient in dense areas and preserves the walkability and community feel of areas that are more spread out. The next biggest reason mixed use developments are so popular as discussed in this post really adds up to simply being the live, work, play mentality. Right? That’s certainly a new modern, carefree mentality embraced especially by millennials. To quote, millennials and empty nesters are flocking to live in mixed use developments that offer maintenance free living in an upscale environment. They will pay a premium and rent for an apartment with luxury amenities either within the building or within the immediate neighborhood. Now that’s important to note again, because we’re talking about Tyson’s Corner. Tyson’s Corner has the highest concentration of office space in northern Virginia. It’s an area that people come to commute in for work during the day and leave after they punch out at 5:00 PM.

Luke O’Brien:                So if you are planning for the future, how do you get people to stay there? To live there? Well, the answer is you provide amenities, you provide park space, and you provide bicycle friendly roads like the mile is promising, you provide convenience. Grocery store is attached to an apartment building. You see how this works? A mixed use provides a little bit of everything in an area that needs a little bit of everything. So the final point that this post makes as to why mixed use developments are so successful and trending right now is that they provide a “retail mix.”

Luke O’Brien:                It’s important to note that the anchor tenant to a mixed use development oftentimes is going to be some sort of retail, whether it’s a Kroger, or whether it’s a whole foods, or maybe some large shopping outlet. That is a lot of times going to anchor a mixed use development to sort of build public awareness around this site as it’s developing. People will want to go there to access all the retail that it provides. And once there is a public knowledge as to what’s going on there, then you can start to build around it a little bit, then you can start to build apartment buildings out where people can be close to the retail outlets that they enjoy that are particular to them. And it’s like I said before, it is simple, and it’s formulaic, and it works.

Luke O’Brien:                All right everyone, that is it. I hope you enjoyed our look at the mild development and how it is exemplary of modern mixed use projects. As always, we will be back with more content, news, and discussion about the world of construction soon. But in the meantime, it would mean a lot to us if you could hit the subscribe button on whatever podcast platform you’re using to listen in, whether it’s Apple podcast, Google play, Stitcher, or whatever, and give us a follow. Also, if you liked the episode, go ahead and leave us a five star review that really helps us out. And remember, we are always looking to connect with our listeners and even have them on the show to discuss some of their chosen construction topics and their own businesses. If you would like to learn more about Build Central, please visit us on the web at www.buildcentral.com or if you would like to reach out to me, Luke O’Brien, personally, please don’t hesitate to email me at lobrien@buildcentral.com. That is L-O-B-R-I-E-N @buildcentral.com. We’re looking forward to seeing you next time. Take care.