Against all odds, 2022 brought an explosion of construction activity around Chicagoland. Not much has changed one month into 2023, yet there are plenty of emerging trends to poise the market for continued success.
One of the biggest trends is the incorporation of sustainable methods and materials, such as lower-carbon concrete and steel and the use of electric cranes. Lendlease is one company that’s become a proven leader in sustainability across all markets and exemplifies it through their portfolio of projects throughout Downtown Chicago.
Lendlease has two main goals: (1) to achieve net zero Scope 1 and 2 emissions by 2025 and (2) absolute zero for Scopes 1, 2 and 3 by 2040. To achieve these, Lendlease must operate in a manner which maximizes its reduction in greenhouse gas emissions and achieve the balance by way of carbon offset schemes for Scopes 1 and 2, and without any carbon offsets for Scope 3. And while the goals seem lofty, Kinjal Patel, General Manager, Construction, Chicago, said there are already tangible results.
The Reed at Southbank, for example, is a 41-story, 440-unit community in the South Loop, for which Lendlease utilized a proprietary green concrete mix that reduces carbon emissions by replacing up to 60% of the portland cement with slag, as opposed to a traditional mix concrete. As a result, The Reed has achieved the strength required, and the product longevity is expected to exceed traditional mix by up to 30 years while reducing energy and carbon emissions by 30%. Patel said the goal for all projects is to exceed code minimums by at least 10%.
Though this switch alone not enough to achieve both the 2025 and 2040 goals, Lendlease is also working on other solutions, like making the switch from diesel-powered to electric equipment.
“We’re in the process of working with manufacturers,” Patel said, “and I hope we’re piloting all-electric equipment on the front end of our projects within the next few years.”
Sustainability is desired by many but considered by less for one reason: cost, especially in today’s economy. But Patel said this is a misplaced notion. Being on the front end has allowed the company to pilot new methods and materials and determine early what does and does not work so by the time it’s ready to be presented, there’s not a large premium.
“The first design of the new slag mix that we piloted on our first building came at a small premium,” Patel admitted. “But because the infrastructure was already in place at the batch plant where we were sourcing the material, we were able to apply that methodology to the next building for a smaller premium than the first.”
Eventually the premium will fall even with the cost of traditional concrete, and the trial and error on the front end allows the product to enter the market at a more reasonable premium, or no premium, resulting in a savings on the back end of a project, like within operations and facility management.
Yet sustainability is just one emerging trend; another is the increased use of technology.
Patel said it’s important for construction managers to be sophisticated in how they’re setting up their virtual design professional group. Architects and designers design mostly in 3D, and a forward-thinking contractor is hiring people that can take electronic models and manipulate them for use for a variety of different steps in the process. Lendlease has a VDC group that does just this, which is what allows them to pilot many things. For The Reed, Lendlease utilized this technology to build a secondary screen wall for façade instillation, or a “cocoon of protective cocoons” outside the face of the building, from which they can install the façade of the building inside.
“When you look at any high-rise under construction, you’ll often see a cocoon at the top, which is where the concrete or steel installation is occurring,” Patel said. “This screen wall is for protection of both the structure building activities and workers from the elements such as excess wind, as well as protecting the public from debris. In collaboration with our virtual design group, we were able to apply that engineering for the façade, which is lower in the building and is traditionally done outdoors.”
By applying that cocoon to other stages of the build, Lendlease was able to increase efficiency of the crew, eliminate risk, increase safety and reduce schedule pushbacks caused by weather. Other advancements on the horizon include reducing on-site labor by way of high-rise drones and robotics for assistance in material storage and delivery around site.
Reducing on-site labor has many advantages including increased safety and efficiency at a lower cost, causing more and more companies to slowly transition, like Rosemont-based Principle Construction. Chief Operating Officer Mark Augustyn said Google Earth and Bluebeam have been especially useful programs, among others.
“Using these two programs, Principle can determine if the site is feasible to go forward with layout and construction, ultimately saving us time and a physical site visit,” Augustyn said.
As for the sectors/property types expected to drive construction activity the most in 2023, Lendlease continues to see a strength in multifamily. Patel said rental rates are high, and landlords no longer have to offer concessions for new renters. In addition to developing and building The Reed, Lendlease is also the GC for two other multifamily projects that will open this year: Greystar’s One Six Six (166 N. Aberdeen) in the Fulton Market District and CMK Companies’ 1400 S. Wabash in the South Loop. Lendlease is also the GC for The Saint Grand, a new mixed-use project in Streeterville from Maverik Development, GW Properties, Luxury Living Chicago Realty and Double Eagle Development. Breaking ground next month, the 21-story building will include 248 rental units and 40,000 square feet of office space, along with ground-floor retail.
Life science is another blooming sector, and companies like Lendlease are working to lure businesses to Chicago.
“Fulton Market and other urban hubs such as Lincoln Yards [Sterling Bay] and The 78 [Related Midwest] have plans for life science buildings in addition to the buildings already complete,” Patel said. “There’s a microecosystem of life science projects that are coming to fruition, slightly propped up by the tech sector also emerging in these areas.”
And of course, when talking about construction activity, industrial cannot be left out. Industrial property construction exceed 38 million square feet, increasing almost 16% in Q4 2022, and Augustyn has already seen a significant amount of this construction this month alone, including warehouses and repair facilities, as well as any project(s) related to trucking or truck/trailer storage. Principle has a project in West Dundee for a truck/trailer storage yard and truck maintenance operations facility, as well as several reconstruction/renovation projects, which continues to be a trend across all sectors.
In Bloomington, Illinois, Principle will be replacing an old retail facility with a new restaurant, as entertainment/dining experiences continue to do well. Additionally, Augustyn said they recently demolished and are in the process of repurposing an underutilized building on Morgan Street in Chicago into a spec office warehouse for USPS.