If there were one word that summed up our experience from 2022 and our approach to the year ahead, it would flexibility. You succeed in a challenging environment by being adaptable to change, open-minded to new ideas, and focused on solutions.   

As we mentioned in previous posts, last year presented various challenges for the commercial construction industry. Driven by pent-up demand and the need to expand and grow, clients have been more than ready to build to increase revenues. The real headwinds over the last year were supply chain disruption, higher material costs, and personal shortages. While material costs have come down in some instances, material availability and labor issues are still a challenge heading into 2023. This can result in project delays and schedule and cost overruns if you don’t have a plan in place.

For Englewood and our national retail, restaurant, and hospitality clients, we’ve learned that the old mindset of the lowest competitive bid and a rigid approach to material and equipment is ineffective in times like these.  For example, the project can be at risk if you only chase after the lowest bid. This can lead to the inability to man the project appropriately to ensure the quality it deserves. It’s the old adage; you get what you pay for.

At Englewood, we believe a new and flexible mindset must be applied to mitigate challenges and ensure a project’s and our client’s success.  Here are a few key lessons learned, plus a few trends we see for the year ahead: 

1. Managing Lead Times for Materials and Equipment
   Understand when new equipment and materials will be available and plan accordingly. This may mean delaying the project to accommodate the proper delivery of these items.  OR… consider alternatives and options to current the current specifications to protect the timeline of the project without sacrificing quality, performance, or brand standards.  Continually stopping and starting a project can cost more in the long run.
2. Managing Labor Shortages
   Quality subcontractors perform at a higher standard. To mitigate your risks, stick with high-quality and proven performance.  Going with the lowest bidder is rarely worth it. We have spent years qualifying and building trusting relationships with our network of more than 20.000 subcontractors.
3. Permitting Continues to be a Challenge
   The best way to turn your permit review process around in a timely manner is to work with a qualified and experienced architect and engineer to produce the best documents possible.  Getting it right the first time can save you time and money.

   Secondly, inquire if the municipality allows 3^rd party review to help the process along, it could be worth the ask. 

4.  Restaurant Construction is Up
   From fast food and food service to casual and fine dining, our national restaurant clients continue to build.  After a few years of being locked down at home, people have shown they want to dine out.  They enjoy the social or communal experience. This is where they want to spend their discretionary funds.  This is a trend we see continuing in the years ahead, especially with baby boomers and young diners preferring to eat out.
5. Experiential Retail is Growing
   One of the biggest booms in retail construction has been the growth and expansion of experiential concepts such as indoor golf, pickleball, child entertainment, bowling, and even axe throwing. Again, people are looking to get out of their homes and socialize. Many of our clients are taking advantage of this trend by repurposing free-standing venues into shopping mall retail space.  This has been a big growth area for Englewood.

Looking forward, we see the glass half-full.  We understand we need to work with our clients to find reasonable solutions to the challenges we face.  We start 2023 with our biggest backlog ever; however, we must adapt to the new realities.