Each month, we pick a topic and blog about the different industries that Banko Design services. This month, we’re tackling an increasingly prevalent topic in senior living and in all out of our markets – the rise of renovations!
THE RISE OF RENOVATIONS
It’s no secret that the cost of building right now is through the roof. Supply chains have been disrupted globally and prices for lumber and other materials have skyrocketed. This has made investing in new-build projects even more financially cumbersome for developers. As our clients pivot to manage these rising costs, Banko is seeing a boom in requests to renovate and refresh their existing communities, including light finish and FF&E upgrades. Considering the past 18-24 months, this isn’t a shock.
To say our seniors’ communities have been well-loved and used over the past year is a massive understatement. With wheelchair and walker traffic, food and beverage delivery, more strenuous cleaning regiments, and residents and staff on the move and unable to venture outside of the community – we’re talking 24 hours a day, 7 days a week usage. Senior living communities have seen serious wear and tear! Rather than building something new in an expensive market, many of our clients are looking at what they already have and taking steps to improve it. But, as we all know, renovations cost, so where’s the money coming from?
SHOW ME THE MONEY
During the pandemic, the majority of capital was going to PPE, additional care staff, hazard pay, and increased cleaning fees at senior living communities rather than to new projects and expanding portfolios. And, because of the volatility the pandemic brought with it, many held on to their cash reserves and accrued CapEx dollars in the effort to “wait it out.” A year and a half have passed and for many the wait is over. Those with reserves are now recognizing the benefit of giving their current communities a fresh start.
NEW-BUILD VS. RENOVATIONS
You may be wondering if renovations are really THAT different from new-builds. Our answer is YES for a variety of reasons. New-builds are typically in booming markets, while renovations are often in tertiary markets. We also find that owners tend to buy renovation projects in quantity, while new-build business comes in and moves at much slower rates. Another notable difference is that consultant teams are much smaller on renovations and often only include a designer and general contractor. As you would suspect, this makes project management and coordination much easier.
Aside from their differences, we would argue that renovations are much more challenging than a new-build project. Budgets are often tighter, making dollars hard to stretch. There are also so many unknowns in renovations, which is why we always include a contingency! Renovations are completed at a faster cycle than a new-build project, meaning you have months rather than years to plan, select, order, and install. With ever-increasing lead times on materials affecting everyone this year, this makes renovations even more tricky. Another reason that renovations are more challenging? Renovations are occupied, whereas new-build properties are free of residents. The occupancy factor requires exemplary coordination with community staff and other consultants to ensure that work is done efficiently and quickly without disturbing residents.
WHY WE LOVE WORKING ON RENOVATIONS
Does this all sound like a lot to coordinate? It is! And that’s why it’s SO important you consult with experts who have experience and success in this sector. (Hint hint!) We’ve managed projects from multi-million dollar new-builds to small lobby renovations, AND we’re vertically integrated, which allows our team to draw knowledge from all three of our verticals and apply it to your senior living renovation.
To ensure our success from the start, our teams form a calculated plan that clearly maps out how we’ll make the building look and feel cohesive AFTER the renovation. We do this by taking inventory of existing furniture, helping owners with project scope, and forming REALISTIC upfront budgets for design services and all necessary changes. We will then program and design the space and expertly document all selections. As previously mentioned, one of the common hiccups of renovations are tight budgets and limited time. With a full-service in-house procurement team that has direct accounts with a multitude of manufacturers and two Banko-owned warehouses in both GA and MN, we can help control costs and time.
Banko Design has beautifully and successfully completed dozens of renovations across all verticals. Let us help you maintain and increase the value of your asset! We’ve got the manpower and expertise to do it and do it right. Have a project on your mind? Reach out to our Business Development team at email@example.com and firstname.lastname@example.org.