For more than 125 years, McHugh Construction has been adding to city skylines through a variety of construction methods and processes. We’ve built hundreds of buildings from rental skyscrapers to five-star hotels to sports arenas and award-winning restaurants with every material possible. And one trend we’re happy to see rising is the design-build method where developers tap their general contractor early to deliver the projects on time and on budget.

With the state of construction lending tighter than ever, most commercial property owners agree they don’t have the same wiggle room in their budgets as before. Some may even argue the current construction loan environment should favor the traditional “plan and spec” method of project delivery where design drawings are created with written specifications that general contractors bid on – often, with the lowest bid being the winning bid.

Instead, we strongly encourage the design-build process, where the general contractor and architect work hand in hand and both are involved as early as possible in the design process. In our experience, design and construction happening concurrently saves owners money and allows projects to be completed faster.

Steve Wiley, senior vice president, pre-construction services, McHugh Construction

While the amount of time in the pre-construction phase varies, a large multifamily high-rise usually requires approximately one year of planning and estimating before the project breaks ground. During this phase, we work with the owner/developer and design team to establish budgets and the scope of work. Putting in this time upfront maximizes time and cost efficiencies over the course of the project.

Making Informed Material Choices Through 3D Modeling

One way we make the design-build process better is through advanced modeling. Our first step is to turn conceptual sketches or 2D drawings from the architect or client into 3D models. From these 3D models, we can establish budgets and clearly define our scope of work. The models help us determine not only the amount of building material we will need, but also the types of structural, mechanical, electrical and plumbing systems required for the project. It also helps us determine if there are cost savings to be found as we’re able to show owners what an alternative material – that achieves the same aesthetic – will look like on the 3D model.

The models also give a developer or owner who isn’t as well versed in reading blueprints a better idea of how one slight change can create a major impact on the building’s budget and look. This can be especially relevant when tweaking a building’s exterior, which can be an expensive component of any budget. We can plug in alternative slab edge covers, window walls, balcony doors or metal panels and see new models reflecting those changes in only a matter of minutes.

Maximizing Structural, MEP Efficiencies

While a project’s structural system and its mechanical, electrical and plumbing (MEP) system aren’t usually part of a property tour – as would-be residents are much more interested in interior finishes and amenities – these two systems do comprise between 50% to 70% of a project’s entire budget. So, to say they are an important part of the design-build process is an understatement.

At McHugh, we’ve realized over the years that the best cost-savings in this part of the process can be obtained by working with the project’s structural engineer to optimize the placement of columns, core and shear walls and floor slabs, and by using our sister company McHugh Concrete to pour the concrete for the structure. We also work with the structural engineer on drift and deflection issues to ensure the building’s strength to support lateral and vertical loads. We can shave it down to a system that’s very cost efficient and yet performs to the requirements of the project.

Based on our extensive experience, developers/owners are most likely to hit their project budget and schedule goals by engaging their general contractor as early as possible, and McHugh Construction will no doubt be leading the charge in these better building practices.

Steve Wiley is senior vice president, pre-construction services with Chicago-based McHugh Construction.

Cushman & Wakefield arranged the sale of The Riley, a 178-unit multifamily community in Burleson, Texas.

Grant Raymond and Asher Hall of Cushman & Wakefield represented the seller, Corsair Ventures, in the transaction. The community was acquired by a JV Partnership between NewStreet Properties, LLC, headquartered in Omaha, NE, and Thane Partners.

Completed in 2023, The Riley offers exceptional interior finishes and cutting-edge smart apartment features along with community amenities designed for modern living such as a resort-style pool, an Uber lounge, a dog spa and park, a 24-hour fitness center, a wine bar, a game area with shuffleboard, and a clubhouse featuring an activity center and co-working offices.

Strategically located between Hwy 74 and I-35W, The Riley also provides residents quick commutes to employment hubs and a workforce of 650,000 within 25-minutes, shopping, dining, live entertainment, and outdoor activities. The multifamily community is conveniently within walking distance to several grocery stores including the announced Sprouts Farmers Market development, to be located right next door.

The U.S. industrial vacancy rate is beginning to plateau as the new supply of industrial properties begins to fall.

That’s one of the key findings in Colliers’ third quarter 2024 national industrial report.

According to Colliers’ research, the average industrial vacancy rate in the United States climbed by 19 basis points to 6.6% in the third quarter of this year.

That is an increase, but it’s a small one. Colliers reported that last quarter’s increase in vacancy rate was the smallest quarterly jump since the industrial vacancy rate began to increase in the latter months of 2022.

Part of this is because of the slowdown in new industrial supply. According to Colliers’ numbers, new industrial supply totaled 76 million square feet in the third quarter. That is the lowest since early 2021 and 54% below the 163 million square feet of industrial space delivered during the third quarter last year.

Tenants are still claiming industrial space. Colliers reported that net industrial absorption across the United States totaled 39 million square feet in the third quarter. That brings the year-to-date amount of U.S. industrial absorption to 115 million square feet.

Expect a continued slowdown in new industrial construction. Colliers says that the development of new U.S. industrial space has decreased by 53% since its peak in 2022. New development will fall below 300 million square feet by early 2025.

While the U.S. industrial market is no longer in its boom phase, Colliers did report that 35 tenants across the country moved into spaces of 500,000 square feet or larger during the third quarter. Nearly half of these tenants were third-party logistics providers or packaging users.

What U.S. industrial markets performed well during the third quarter? Houston saw more than 5.7 million square feet of net absorption to lead the country, while Dallas-Fort Worth ranked second with more than 5.5 million square feet.

Chicago ranked second in the country for total inventory with 1.5 billion square feet of industrial space on the market. Chicago also saw its industrial vacancy rate fall to 4.9% during the third quarter down 29 basis points.

The Dallas-Fort Worth market had 1.1 billion square feet of industrial inventory as of the end of the third quarter.

 JLL Capital Markets negotiated the sale of Eisenhauer North Business Park, a newly constructed, three-building industrial park totaling 458,439 square feet in San Antonio, Texas.

JLL represented the seller, NIT Industrial, in the transaction. Goldman Sachs acquired the asset.

Completed in Q2 2023, the fully leased property consists of Building 1 at 119,200 square feet, Building 2 at 186,324 square feet and Building 3 at 152,915 square feet. The buildings feature modern, institutional-quality specifications including 32-foot clear heights, ESFR sprinkler systems, LED lighting and a mix of rear-load and front-load configurations. The park offers excellent functionality with 109 total dock-high doors, six drive-in doors, ample trailer parking with 163 spaces and 330 auto parking spaces.

Strategically located less than two miles from Interstate 35, Eisenhauer North Business Park provides an irreplaceable logistics location in northeast San Antonio. This proximity to I-35 allows tenants to efficiently serve the entire San Antonio-New Braunfels MSA while also providing convenient access to the broader I-35 corridor. The property’s position along this major NAFTA trade route enables excellent connectivity to key manufacturing centers, ports and airports throughout the region, putting all four major Texas markets within a three-hour drive.

The JLL Investment Sales and Advisory team representing the seller was led by Trent Agnew, Kyle Mueller, Witt Westbrook and Charles Strauss.

The number of new apartment units coming online in the United States is expected to decrease through 2027, according to the latest forecast from Yardi Matrix.

This isn’t surprising: The new-construction pipeline slowed dramatically this year and last, resulting in far fewer new apartment projects scheduled to open in the coming years.

According to the Yardi Matrix fourth quarter multifamily supply forecast, the United States is expected to see 508,089 new apartment units in 2025. That is down from the predicted 554,288 units expected to deliver throughout 2024.

And the number of new units is expected to only decline further, with Yardi Matrix predicting just 371,509 new apartment units delivered in 2026 and 326,911 in 2027.

This trend is only expected to begin reversing in 2028, when Yardi Matrix estimates that the United States will see 404,559 new multifamily units. And in 2029, Yardi Matrix predicts that 426,485 new apartment units will deliver throughout the country.

Among multifamily markets tracked by Yardi Matrix on or before January of 2020, the under-construction pipeline dipped 3.8% quarter-over-quarter to 1.16 million units. From September 2023 to June 2024, the under-construction pipeline was at or above 1.2 million units.

A total of 56,997 apartment units in the under-construction pipeline are in lease-up, according to Yardi Matrix. Lease-up units declined 9.7% on a quarter-over-quarter basis but increased 5.5% year-over-year.

Markets that are seeing a decrease in under-construction units include the North Dallas market, where 13,793 apartment units were under construction as of October of 2024 compared to 17,917 in the same month a year earlier, and the suburban Dallas market, where 8,962 units were under construction as of the October of this year compared to 12,288 in October of 2023.

In the Houston West submarket, 10,774 multifamily units were under construction in October compared to 14,741 in October of 2023. In Austin, 22,909 apartment units were under construction in October of this year, a big dip from the 40,895 in the same month a year earlier.

And in San Antonio, 6,109 units were under construction this October while 10,949 were under construction a year earlier.

Nashville is seeing a significant dip in new apartment construction, too. Yardi Matrix reported that 11,043 new units were under construction as of October of 2024, a drop of 29.7% from the 15,705 under construction during October of 2023.

Constellation Real Estate Partners acquired 23.31 acres of land at 11891 N. Houston Rosslyn Road in Houston, Texas, for the development of Constellation Rosslyn, a 284,960-square-foot Class-A industrial building.

Construction will begin in the fourth quarter 2024 with completion scheduled for the third quarter 2025.

Designed by Powers Brown Architecture, Constellation Rosslyn will feature a 36-foot clear height, 192 car parking spaces, 78 trailer spaces, full truck circulation, and visibility on North Houston Rosslyn Road. It also contains 1.7 acres of excess land for additional trailer parks or outside storage.

Constellation Rosslyn is in the heart of Houston’s Northwest submarket, a preferred location for large sized distribution, e-commerce, and logistics users serving the greater Houston MSA. The site has quick access to U.S. 249, Beltway 8, and I-45 and is well located to reach end consumers throughout Houston. Marketing and leasing efforts for Constellation Rosslyn will be exclusively handled by Faron Wiley and Ed Frantz of CBRE.