Trust is critical in post-COVID development and construction

If you are a business owner, owning your building establishes a profitable investment strategy

Ron Frederiksen

Business owners and building owners were enjoying a pattern of steady growth following the Great Recession. Then, COVID hit.

A year later, the construction industry is scrambling to deliver the projects currently in the construction pipeline and beginning to think about what 2022 and beyond will look like.

If you are a business owner, owning your building establishes a profitable investment strategy.

That said, it’s not clear sailing.

Quality land is scarce. Lumber prices have tripled. Fuel and petroleum-based products are headed up. Aggregate prices are rising as local supplies dwindle. New climate-protecting rules are coming. Planning and permitting response times are suffering. Tax and regulatory policies are changing. Workforce questions remain.

Meanwhile, the pandemic has accelerated changes to how our clients work, shop, learn and socialize. Businesses are rethinking how they operate differently to serve the rapidly evolving behavior of its clients. They are even reconsidering the future of their own organizational structure.

Problem is, the construction industry is not accustomed to accommodating the unique and changing needs of the end user, the building owner.

Most still default to the transactional bid-build environment that places project risk on the owner. The owner specifies what they want, and the contractor builds it. Any scope modifications come at a high cost to the owner, through expensive rework, change orders and project delays.

Construction executives with a deep understanding of local conditions should have a seat at the planning table with their clients. Operating as owners’ representatives, they bring a voice of practical decision-making as larger decisions and commitments are made. They also will be ready to deliver what the client truly needs and wants when the time is right.

Building owners need to select a construction executive they believe represents their best interests. Then, they need to place their trust in them to deliver an optimal solution quickly and efficiently.

Why? Because the best way to reduce risk doesn’t come from multiple bids. It comes from how well you plan.

This requires a construction executive who is willing to have courageous conversations early in the planning process. We have saved clients hundreds of thousands of dollars and months of heartache by helping them make wise solutions upfront, often before the property is transacted, and well before architects and engineers are engaged, and permit applications are filed.

Selecting a construction partner comes down to a single word: trust.

Testing for Trust
Here are a few tips to know if you have the right construction executive at the table.

Track Record – Find a contractor whose recent projects move beyond building drawings and specifications to find better solutions here in this region. Look for those who have a track record for understanding the client’s true needs, and a passion for helping the client deliver solutions with lower risks and better outcomes. Contractors should care every bit as much as you do about your success both professionally and personally.

Engagement of Suppliers and Subs – It is critical to know that a design and budget are built from active consultation with suppliers and subs who have a proven history of working together. Nobody knows their world like they do. When engaged at the beginning of the design process, they come up with smart, effective solutions, and they are committed to delivering as promised.

Change Orders – The volume of change orders says a great deal about your contractor and their commitment to their clients. A no-change-order guarantee is the commitment you should expect.

Contingencies – Huge contingency allowances are a red flashing danger sign to building owners. It generally means someone didn’t plan thoroughly enough, isn’t sure enough or didn’t engage a proven network thoroughly enough, to be more precise. Plus, they become a self-fulfilling line item – a license to spend more than is necessary.

Appraisal Test – There is one key question that reveals whether you have the right construction executive: “How will the complete project appraise?” Any building owner, and all of their financing and investment partners, are going to expect answers to this question. The answer will illuminate whether your contractor truly understands how to look out for your best interests.

Business owners are making tough decisions about their future. Investing in the building they work from is a logical, proven wealth-building strategy. Yes, COVID-19 has changed everything. But having the right construction executive by your side as your advisor allows you to take advantage of all the significant opportunities today while minimizing the impact of the challenges.

Ron Frederiksen is chairman and CEO of RSV Building Solutions in Vancouver. He can be reached at

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