Roundtable on Commercial Real Estate
The impact of emerging technologies.
Emerging technologies such as drones, cloud services and artificial intelligence (AI) are transforming the construction process via reduced costs, increased safety and more. Four executives involved with Chicago-area building shared their insights with Crain’s Content Studio on how technology is providing a wealth of information previously not possible—in the process, addressing a variety of industry challenges.
ABOUT THE PANELISTS
John Donahue
708-650-3345
JOHN DONAHUE is executive director of Powering Chicago, the labor-management partnership between the International Brotherhood of Electrical Workers (IBEW) Local 134 and the Electrical Contractors’ Association of Chicago. He has nearly 40 years of electrical industry experience, including 26 years as director of the IBEW/NECA Technical Institute, where he oversaw education and training for thousands of apprentices and journey workers. Earlier in his career he served an apprenticeship with IBEW Local 134 before working in the field as a journeyman electrician. He holds a law degree and a doctorate in education.
Morris Gershengorin
847-338-5047
MORRIS GERSHENGORIN is CEO and founder of Real Restoration Group, a full-service Chicago-based firm with more than 100 years of collective experience in all aspects of construction and restoration. He seeks projects that transcend both up and down markets—focusing on new construction when the market is good and restoration and renovation when there’s a downturn—providing qualified solutions and personalized services that surpass expectations. He has been recognized for his work in developing multifamily buildings, restoring properties across a wide variety of asset classes, spearheading numerous emergency-relief projects and a deep love for hospitality projects.
Terry McDonald
312-251-1900
TERRY MCDONALD is an associate principal and board member at Klein & Hoffman Inc., a Chicago-based firm that delivers architectural restoration and structural engineering solutions. He currently manages the firm’s structural engineering group. A FAA-certified remote pilot, he utilizes aerial imagery from drones to inspect building structures. His projects include restoration of Chicago’s Union Station Great Hall, redevelopment of Loyola University Chicago’s Mundelein Center and the condition assessment of the Old Joliet Prison. He is registered as structural engineer in Illinois and is licensed as a professional engineer in Michigan, Colorado and New Jersey.
Joe Zobel
312-927-3043
JOE ZOBEL is vice president and senior MEP (mechanical, electrical and plumbing) coordinator for Clune Construction, an employee-owned general contractor with more than 600 professionals in five offices across the United States. He has 25 years of industry experience, including the last 14 years with Clune. In his current role, he plans and coordinates MEP modeling, installation and procedures to ensure a quality system and smooth commissioning—working the project managers, field staff and virtual construction. He holds a bachelor’s degree in electrical engineering technology from Purdue University.
What role does your organization play in Chicago’s construction industry?
Terry McDonald: Klein & Hoffman provides specialized architectural and structural engineering services, with a focus on existing buildings. We’re a technically oriented practice and don’t consider ourselves “designers” per se. Rather, we provide consulting services to building owners, design architects and specialty contractors involved with repairing and rehabilitating existing buildings as well as new ground-up construction. Our broad and deep understanding of building materials and systems, deterioration and failure mechanisms, and repair and retrofit approaches helps us support other design and construction professionals in developing new buildings.
Joe Zobel: Based in Chicago, Clune Construction is a national, employee-owned general contractor with more than 600 professionals in five offices nationwide. In Chicago, as in all of our markets, we provide construction management services for some of the most respected companies in the world. We’ve earned a reputation for putting our clients first and adhering to a strict ethical code–winning awards for our ethical business practices and for being a great place to work.
Morris Gershengorin: Real Restoration’s strong suit is providing excellent service and quality construction and restoration in the Chicagoland area. We have an active role in Chicago’s multifamily, hospitality, commercial and single-family market. We have different divisions that run both commercial and residential projects.
John Donahue: Powering Chicago is the partnership between the International Brotherhood of Electrical Workers Local 134 and the Electrical Contractors’ Association of Chicago. Our members are trained and well-versed in trends such as renewable and sustainable energy in an effort to promote a positive future, while continually investing in better construction, better careers and better communities.
How has technology impacted your organization over the last five years?
Zobel: It’s greatly improved our ability to share information both inside and outside our organization. From design documents to close-out documentation, technology has allowed us to keep all stakeholders in every project updated in real time.
McDonald: Much of what we do has benefitted by improved visualization/modeling to solve problems to existing buildings, or to assist an architect in designing a new building. Increasing use of technologies has given our firm a forward-thinking mentality, which may have been lacking in the past.
Donahue: Gone are the days where physical paper blueprints were common on a job site. Today, our members are using 3D modeling and, in real time, sharing that information with electrical foremen in the field who use iPads and other tablets to access the information with speed, efficiency and accuracy. The precision and accuracy of these tools elevates job site performance because our electricians are able to see both the overall job description and the finer details of the model.
Gershengorin: It’s drastically improved our ability to communicate with our customers, vendors and colleagues. And it’s given us the ability to seamlessly translate our thoughts in real time, thus creating synergies and efficiencies that benefit everyone.
How is technology reducing construction costs?
Gershengorin: By finding efficiencies companywide, technology allows us to reduce our overhead and create certain savings among different divisions. That can be through estimating, project management or tracking employee productivity.
Zobel: For us, pre-construction designing and planning in 3D has greatly minimized change orders and RFIs, or requests for information. Files can be used to prefabricate assemblies offsite at a lower cost, and design information can be uploaded to computerized layout tools, saving time and reducing errors. Subcontractors that have mastered this technology consistently provide lower bids.
Donahue: By building a computer model of an electrical grid that includes all necessary components, electricians and contractors are able to get exact measurements for conduit and other materials. This decreases material cost, since each piece is done exactly right the first time, while also reducing the installation time. This translates to direct cost savings for customers.
McDonald: High-resolution drone image capture allows us to significantly reduce the amount of close-up hands-on reviews, and make more informed decisions of locations where hands-on reviews are best suited. Drone imagery can also be useful in better quantifying the amount of certain types of repairs, such as lineal footage of crack repairs or number and relative size of brick or concrete repairs. Better estimates help potential contractors tighten project bids.
What are some of the emerging technologies your organization has embraced, and to what benefit?
Zobel: We’ve adopted a variety of building information modeling, or BIM applications to improve project planning and coordination. One technology, in particular, we’ve invested in is 3D scanning. Even before construction begins, our virtual construction department scans existing spaces to create a 3D model. Information can then be shared with architects and engineers to either validate or complete the design. This data is also shared with subcontractors to ensure a smooth installation process.
Donahue: In addition to virtual construction modeling programs, many union contractors and electricians are deploying 3D laser scanning tools. These scanners provide a total and complete picture of a job site before heading back to the office where project managers can begin work. Since project managers can’t make it out to each job site on a daily basis, smartphone applications deployed in the field allow for geotagging and automatic sorting of job site photos that enable project managers to efficiently track the progression of projects.
McDonald: Through the use of 3D printing, we’ve been able to create physical products overnight. We’ve used 3D printed parts to see how designs will fit and function within the constraints of an existing façade. We’ve also constructed and assembled full-scale curtain wall joints to investigate and diagnose repair and remediation methodologies. Increasingly, our facade assessment practice is seeing the benefits of using drones to capture imagery. While the information gathered doesn’t replace a hands-on assessment—at least not yet—drones provide high-quality information quickly and cost-effectively. It’s been beneficial in understanding the general condition of a façade and allows us to be more strategic by targeting scaffold drops at the most critical areas. Some of the other tools we’re using include thermal/moisture vapor transport modeling, BIM, infrared cameras and 360 cameras.
Gershengorin: Project management and estimation software have been a great asset, although they’ll never replace the human touch. From a marketing standpoint, social media and web presence allows us to communicate our latest projects for the world to see.
How have your key audiences—clients, employees and others—responded to your use of emerging technologies?
McDonald: Because visual communication has been a main focus of our new technology, it helps non-technically oriented clients understand the nature of the problems and solutions we’re addressing on their behalf. This can include explaining project goals, project planning, tracking progress and much more. Our in-house training has also benefitted, since technology enables employees to engage and learn hands-on.
Zobel: As a result of our virtual construction technology capabilities, we’re often engaged early in the planning process to gather existing conditions to aid in project design and budgeting. For example, something as simple as scanning the floor can reveal how much floor leveling would need to be purchased. When we provide an accurate 3D model early on, concepts can be validated prior to installation.
Donahue: General contractors and subcontractors have responded well to the industry’s use of technology. In fact, our members frequently are involved from the early planning stages because our customers trust our expertise and ability to digitally lay out an electrical plan. Powering Chicago’s main goal is to consistently deliver better construction—with increased productivity, increased safety and a decrease in cost—and technology allows the industry to achieve that goal.
Gershengorin: The response has been overwhelming. The efficiencies that have been created have affected the entire chain, starting with our suppliers and ending with our customers. People are thrilled to have the ability to both communicate and access organized information that allows them to see the project or task at hand from all angles.
How is technology making your employees’ jobs easier on a daily basis?
Gershengorin: Technology creates a better working environment for our employees and allows seamless communication between our team and customers. Our ability to use technology to relay information, photos and updates in a timely manner improves productivity, alleviates stress and allows employees to get more accomplished each day.
Donahue: Task management tools like FieldBox allow electrical foremen to complete their daily work log by phone. The foreman sets a time each day for the automated call to take place—like during their drive home from work or their lunch break—and asks a series of questions regarding a job site’s progression. Questions range from how many hours worked, to how many people are on the job site, and even what the weather was like during the workday. Once this information is collected, the report auto-populates and is sent to a project manager in the office who can keep exact tabs on the status of a job. Tools like these eliminate the time and stress of having to sit down and write out each detail of a workday, and they don’t take a foreman away from their job actually running the project.
Zobel: Technology allows our project managers to keep all stakeholders informed in real time. Drawings, bulletins, punch lists and RFIs are all distributed thru cloud-based platforms specially designed for construction management. These tools allow this critical information to be available in any platform with little effort from the project manager.
McDonald: Our recent foray into 3D printing has given us a significantly enhanced ability to diagnose defects, and to see how complex components fit together. For example, a current project under investigation centers around significant air movement through the joinery of a modern unitized curtainwall system, creating persistent problems for the building’s occupants. The joints where four separate fabrication units come together was the presumed source, but needed to be verified. By “printing” actual full-scale components and assembling them in our office, we were able to see the design flaws in the original construction that were difficult to interpret from 2D drawings or 3D computer models. The 3D printed mockups allowed us to not only view the defect, but test drive our proposed retrofits in the office prior to full-scale prototyping on site. We’re still feeling our way through this specific technology, and we’re constantly thinking of new ways to apply it.
How do you go about evaluating and selecting technologies?
Donahue: There are hundreds of new technologies available. Our contractors and electricians take the time to thoroughly evaluate each new one that comes to market and make the necessary determination about whether it will help increase productivity or safety, or reduce cost for customers. They may even test a product in the field and office to see how it integrates with existing workflows.
Gershengorin: We go through many product demonstrations in hopes to better our systems. We then put the new system into beta prior to full company-wide utilization.
Zobel: With the speed at which new technologies are developed, evaluating new tools in a timely manner is essential. At Clune, each employee is empowered to identify and propose new products and know-how that could aid their project or the company as a whole. A simple conversation with superiors can result in approval for funds to acquire and evaluate a concept.
McDonald: If you pursue every new bell and whistle out there, you’ll go nowhere fast. As my wife and I say, “You can do anything, but you can’t do everything.” Our evaluation process includes asking a few questions. Will this make our job easier, faster or improve quality for our clients? Will there be an ROI? Will this expand our service offerings? If the answer is yes, we move forward.
How do you incorporate or implement technologies?
Donahue: During their five-year apprenticeship program, IBEW electricians develop a comprehensive understanding of the electrical industry, including technologies like BIM and CAD, an acronym for computer-assisted design, to ensure accurate and efficient results for our clients on every project. We also invest in ongoing training for our members once they’ve completed their apprenticeships and are working in the field to ensure that they have the specialized skills to effectively implement new technologies that elevate industry performance.
Gershengorin: When vetting potential technology integrations, we first seek out companies that have a similar vision to our specific need. Once identified, we dive into the macros of the systems and make sure that they’re adaptable to our company’s needs and culture. In our industry, a good saying is “Measure three times and cut once.”
McDonald: As a mid-sized firm, we tend to dip our toes in new technologies by making small bets at first. Once the viability is tested and confirmed, we ramp up the implementation. Oftentimes, it starts with a single person who comes up with an idea and is passionate enough to research and develop a technology. We try to support our younger colleagues to pursue their technology interests as it’s a win-win for the individuals and the firm.
Zobel: When a new technology is brought in on a trial basis, we immediately seek out uses for it in other facets of the company. We simultaneously introduce the technology to team leaders, both in our office and in other markets, to get their help in assessing its value.
What’s the number one technology challenge your organization is facing?
Zobel: With the speed of how quickly new technology is being developed, deciding which applications would work best is challenging. For any given category of solutions—BIM, accounting, project management, etc.—there are many choices available. Properly evaluating them in a short period of time is difficult. Likewise, a lot of the technologies available to the construction industry overlap with current systems that are already in place. Changing the status quo to gain a new feature needs to be carefully evaluated to determine their worth.
Gershengorin: People are used to their current systems, and not everyone wants to make a change. Meanwhile, some of our team members are more tech savvy than others. So, we have to keep in mind that we’re catering to all levels of knowledge.
McDonald: Technology is continually evolving and just as you make an investment and become proficient, the tech may be obsolete, in which case you need to be ready to pivot. While the pace of innovation is staggering, it’s too easy to just go along doing the same old thing while others recognize that technology is changing the industry.
Donahue: One challenge is determining which tools and trends are worth adopting. The market is flooded with so many products, but not all of them will increase productivity or reduce costs. Our contractors do a complete review of each tool to determine whether it’s best for their situation. Training for new technologies is a lengthy process as well, so picking the right tool to invest in becomes that much more important.
What’s driving construction technology innovation?
Gershengorin: Construction technology innovation is driven by the current need for instant gratification and people’s current needs to see step-by-step updates on their projects. Project safety and efficiency are also at the forefront of construction technology needs.
McDonald: Innovation is being driven by inexpensive hardware combined with incredible software advancements. The architecture, engineering and construction industry is very competitive and firms need to consider every viable advantage they can, particularly when the barrier to enter the market is relatively low, as is the case with some of these technologies.
Zobel: In one word, cost is the main driver. One of, if not the largest, cost categories in construction is labor. Many newer technologies have been developed with the goal of reducing manpower hours; for example, allowing designers to create more accurate drawings which minimize RFIs, or allowing pre-fabrication, which not only reduces cost but also improves job site safety.
Donahue: Sustainable, renewable energies are driving construction technologies into the future. Whether that’s adding solar panels to the roofs of buildings or eventually adding panels directly into a building’s windows, we’re continually investing in teaching and training our members to understand and implement these technologies to enhance their ability to deliver better construction on time and on budget while maintaining the highest safety standards.
What technology trends are you seeing in Chicago? How do these compare to what’s taking place elsewhere in the country?
Donahue: Our contractors are pushing the technology boundaries every day by equipping electrical foremen with tablets to see BIM and CAD drawings in real time. During construction at Chicago’s new South Loop apartment complex, NEMA, Powering Chicago’s Gurtz Electric used tablets to facilitate communication between its suburban office, the project manager onsite and the electricians on various floors of the building. This level of efficiency ensured the project adhered to its timeline, without sacrificing quality of workmanship in any way.
McDonald: We’ve seen more commercial usage of drones here as Chicago’s ordinance has been clarified to allow for commercial flight as long as the ordinance restrictions and FAA guidelines are followed. Currently, there’s a push in the New York City Council to allow the use of drones for facade inspections there following a fatal accident last year, when a piece of terra cotta came loose from a building and tragically killed a pedestrian. If this moves forward, it would be a complete 180 from a complete ban on drone usage in Manhattan.
Gershengorin: Chicago has become a hub for technology, not only keeping up but surpassing the nationwide trend by offering luxuries and consumer services through digital platforms. On a business level, we’ve seen more use of cloud technology inside organizations that IT teams are implementing to maintain a safe place for data storage that can be shared and viewed by everyone inside the organization without fear of being hacked.
Zobel: The quality and efficiency from the trades in the Chicago area is excellent, in part due to the extensive use of BIM and virtual construction tools. The advantage of these technologies becomes apparent when we manage projects in smaller markets across the country. Concepts such as prefabrication and lean construction are difficult to implement without using these tools. We consistently see higher pricing and longer installation times where technology we’ve come to rely on isn’t embraced. Larger markets, for the most part, use similar technology and are naturally more competitive.
What technologies will likely impact your industry over the next decade?
McDonald: AI is starting to play a role in diagnostics that we anticipate will quickly evolve into useful tools. For instance, crack mapping of building facades from hi-def drone image capture will likely be something we’ll be able to feed through AI algorithms to detect defects and quantify for eventual remediation. The real transformation may happen when multiple emerging technologies converge, such as when you combine autonomous drones, 5G, multiple sensors and AI. In this scenario, you could complete an entire façade assessment by sending a drone with a click of the button—all from the comfort of your office. It sounds like science fiction, but who in 2010 could have predicted where we are today?
Donahue: We’ll likely see a deeper integration with technology through smartphones. This can be as simple as new apps that will automatically categorize job site photos based on location and what’s in the photo, to more advanced BIM and CAD integration that will allow real-time views of a project’s electrical layout through a phone’s camera. The cost of many of these technologies is decreasing, and therefore will increase the rate of deployment throughout the industry.
Gershengorin: Public platform reviews will continue to impact our company’s digital footprint, as people rely heavier on opinion to hire contractors. As such, our company will continue to strive to be a positive presence in our Chicagoland community.
Zobel: We currently use augmented reality to improve designs in the field; I believe this will become more routine. The construction information will be accessible with a heads-up display, giving the trades people instant access to all pertinent information and measurements. Another useful technology that I foresee being utilized more is robotics. With self-driving cars becoming more popular, using robotic excavators seems to be the next logical step.
This article was originally published on Crain’s Chicago Business: https://www.chicagobusiness.com/crains-custom-media/roundtable-commercial-real-estate
