Doug Bevier: Welcome to another episode of Building Forward with Clark Pacific. Today we are diving into prefabricated facades with Adrian Lowenstein. Adrian, you want to give a quick intro about who you are and a little bit of your background before we just jump into it?
Adrian Lowenstein: course, my name is Adrian. I actually started on the envelope consulting side, kind of like Dan. And so, you know, I've, I've seen Dan with his forensic hat on and I can appreciate his performance driven perspective, but even though I spent a good amount of time on the window manufacturing and contracting side, I always looked at facades from performance standpoint and tried to look at the holistic picture of the envelope. so working with you guys, it's given me an appreciation in terms of being in a position where you're owning the full envelope, having to own the opaque elements, the glazing elements, the interface conditions, the waterproofing, the air tightness, thermal continuity, puts a lot of pressure on your engineer. team. So, you I think it's something you guys probably set out a standard that you're, from a company standpoint and an offering standpoint, you were looking to set a high precedent or bar, but it's something that is probably very difficult to replicate for other companies and for owners and end users to find, you know, even competition that wants to come to market with that approach. Would you agree?
Doug Bevier: I would, think partly on the West Coast is a little bit different than I would say precast in other areas of the US. There was a lot of high-end facade precasters and part of just the cost of doing business was figuring out how to get full facade panels fully dried in prior to getting to the job site. And that was a real challenge historically because precasters are precasters, glass guys are glass guys. And really this developed back in the nineties and early two thousands, where we'd be threading a needle with field logistics. the wherever the pre-caster was, they would fabricate panels. They would load them on a load. They would ship them to a glazer to install windows. They would have 24 hours to install the windows and then get it to the job site for just in time erection. And you can imagine the amount of just logistical hiccups you would have with that. And, so there was a company. that started doing pre-installed glazing. And it was really because they were a glazing company that then started doing precast. And once they entered our market, that was what everybody wanted. There were some other advantages of doing it in the plant facility. Number one, better working conditions, doing it in storage versus on a truck. You would have more time to install the windows, seal everything, let everything cure. So again, just taking as much stuff off the site. So we really were kind of pushed into it and I would say most people started with Just partnerships or a glazer may come into your plant and we said no we want to look at it holistically because the challenge was You know, you'd have the glass guy or the window or the louver whoever saying hey I'm gonna design something that's in the best interest for me that reduces the most amount of risk that gives me the best price and the best margins and rightfully so the pre caster would be doing the same thing and what would end up happening, would be a lot of times it could be a battle. And at the end of the day, the owner and the general contractor weren't getting the best value for the site because something might make something a little bit more challenging for the precast, but a lot easier and a lot more value to the class or vice versa. Instead of just two people looking at it like, hey, we're just going to do things with the best interest of ourselves. And that was challenging, right? Trying to learn a whole new product. when you have historically a lot of guys that are specialists in one area. And so we came up and the reason I bring this up is that's how I met Adrian. Adrian was an envelope consultant. Also, we worked together on a few projects with other companies that he worked with and we needed to have that technical advice from somebody who could put it into precast terms and we could look at projects together in a pursuit versus a subcontractor. or subcontractor relationship. And so I think that was the real value that really helped us evolve. what I thought was very unique about your approach historically is that you kind of went after this precast prefab industry saying, hey, there is a need across the nation to get this value to the owner. And you said, hey, there's a niche here. that I can be a subject expert in and help these people. And so I wanted to start with asking, like, how did you identify that? And then we can maybe get into some of the lessons learned you've had over the years and how you've evolved your approach with this total prefab envelope.
Adrian Lowenstein: funny from the outside, actually don't look at you guys like a precaster, even though you might identify yourself as a precaster. I mean, maybe I would think more of a whole building solution provider, especially with some of the parking offerings you guys have and structural offerings you have. it's a mentality and willingness to want to get outside of your comfort zone. And I think it's very easy for Window window suppliers, like you said, to be afraid of interface conditions, to be afraid of masonry, to be afraid of waterproofing and vice versa, precasters to not want to touch glazing. And in what I can now say years of doing this from the precaster unitizer standpoint, there has to be a willingness to want to take on scope that might fall outside of their comfort zone. And that goes way beyond a strong estimating team and a strong pre con team. I think the. major major stress and challenge and burden falls on project management and operations. because when it comes to sourcing those material, testing those material, installing those materials, understanding the logistics of all of it is when a lot of the burden falls on those particular members, especially when they then go back and point at the sales guys and say, what did you sell and what did you leave in my hands? And so I think it has to be a company wide willingness and mentality to... want to own the full envelope and be that single source solution. I mean, have you guys struggled in getting that mentality adopted throughout all stages of the life cycle?
Dan Delisle: I'd say really what we're talking about is that we own everything or can own everything and Carpacific is really good at design, manufacturing, logistics, installation. so we have broken that mold of facade design, handing it over and just seeing what happens. and making it, you know, or stopping it from being abstract, really, it's this, you know, and you're really good at this too, Adrian, I know, because we've had a few projects together, and what stood out to me the most on some of those is that the conversation very quickly turned from this high-level design and 2D prints to actual talking about production, which you're familiar with, and talking about the field. you know, shop drawings and sealing and spray foam and, you know, chipping and caulking and we, you and I and Doug and the rest of the teams have worked through all of those things before there was a handoff to production to actually go do those things. So, you know, I really appreciate that about working with you and the way that Clark Pacific does stuff and gets construction done. For you, what would you say, what's the most revealing within that context to really get a strong start with your project teams and really understand that, Someone's got to carry this all the way through to the beginning, from the beginning to the end, and have a happy client.
Adrian Lowenstein: Anyone? I keep pointing back to project management because it's so critical because they really are that interface between operations and pre-con. And I think you run into a lot of challenges when you separate precast elements from all your accessory elements between louvers and caulking and insulation and windows, because immediately it turns into that finger pointing competition. And I think if you have a project owner, project executive that might oversee a glazing project manager and then a precast project manager and can be that glue between the two of them making sure they're working together. The minute you start splitting these things up and subcontracting this and outsourcing this, things can go south really quickly. And I think something I really appreciated about you guys is that you had in-house glazers. For the most part, every time we were working together, there were in-house glazing experts. And so if glass replacement was required or if certain adhesion testing was required at your mitered corner of the window, they were able to speak to the window manufacturer in that same language. And so they could then be that bridge between Clark Pacific and the individual suppliers. But you guys only got to this point because you've done so many projects and have such a vast portfolio that you can afford to have that level of on staff, on payroll consistently throughout moving forward. But for new precasters entering the market, I think that's probably the most burdensome challenge to overcome. It's having that level of expertise in all specific areas.
Doug Bevier: I think it's kind of similar to a subcontractor and a GC relationship. You have to have trust between the partners first and foremost. And then you have to have some technical knowledge back and forth on the systems, right? And I think sometimes you learn a little bit that on project one, you learn a little bit more about it on project two, and then you keep going. I think, you know, a lot of us, maybe in your age group, that remember this industry as design, bid, build. And again, was, qualify everything. As soon as the job goes in, things change, change order. That's just how construction operated and everybody was protect. mean, frankly, it's just protect your own ass. And we've seen a major shift to this design build world where it's not, that's not how you're doing work. And it's more of a service driven value. And you got to take that same approach when you're looking at, you know, partnering, either partnering or having a sub sub to your contractor, like a glazer come in and you got to say, hey, look, we got to both understand each other's systems at some type of a base level. So we're working together. And I think that's where we've had the most amount of most amount of success. And again, every project manager is different. Every job can have a different experience. But if you take that mindset, I think we've had a lot more success throughout the years.
Adrian Lowenstein: especially in the West coast, when you see this merge between glazing and precast, which I think is unique to anywhere else in the world. I've seen your sales process and outlook evolve in that, know, traditionally or historically, precasters try to sell against window wall and curtain wall and vice versa. The unitizers on the curtain wall side are going to say, it's a pain in the ass, you need a tower crane, it's going to slow down your schedule. I've seen you shift your outlook in saying, you know what, they want curtain wall on this out elevation or, know, they need this type of cladding or this shading element on this current wall on this other elevation. Let's figure out how to make the holistic picture work. So instead of fighting against EFIS or fighting against curtain wall, different elevations might have different requirements from an aesthetic, heritage, performance standpoint. So instead of fighting it, embracing it, and then seeing how can Clark Pacific then provide the most value.
Doug Bevier: Yeah, appreciate that, Adrian. I think that is a different shift in mindset. And I think that it definitely helped as we started bringing on more more scopes. And we've done metal panels, we've done doors, we've done curtain wall, we've done window wall, and saying, hey, we want to shift our mindset to being a full facade provider. Now we specialize in precast and we're going to look at jobs that have more precast scope than others, but saying, hey, we still want to offer that value. we also got to look in the mirror and say, I get it. Precast is great in these areas. It may be better product in these smaller areas or custom where it matters. Like there is the best solution for the project and rather than fight it, say, hey, how do we de-risk this for all parties? You know, from the precasters perspective, the glazer perspective, the GC's perspective, and most importantly, the owner's perspective. And then say, hey, let's come together and work on a system where adjacent systems are coming together that have no detailing and that we can stand behind, right? versus always trying to convert the scope to what's best for me. Right. And I think that's been a big shift in the market as well as subcontractors are getting access to owners at earlier phases in pursuits than we've ever experienced in this industry. You know, just 10 years ago, everything we saw was CD construction development level drawings. I would say majority of the projects we are getting engaged at are schematic level design when they sent out the RFP, we were at 50 % SDs. And it was like, hey, this is a general what we needed to look like. And we needed to develop it together. And that I think is the biggest shift that I've seen in the industry. we, I think that's where the owner gets the most value and where we can work together. And you say, let's bring on these experts, get them in a room and we'll come up with, hey, this is our must have, should have, could have, how do we deliver that with as few contractors as possible, but still get the design intent we're looking for? Have you seen that in other regions when you're working with other precasters like Wells and Tindal's of the world?
Adrian Lowenstein: I think undoubtedly the earlier an owner commits or a GC commits to panelizing, the higher chance of success for you guys, I would think. You want to get in early. In other regions, especially New York, you can't imagine the amount of hand-laid brick you see. And they still do GFRC and precast components like parts and pieces or column covers and spandrels. Let's flip that and play devil's advocate. What is the risk in an owner committing to prefab or unitized too early in the game?
Doug Bevier: What I've heard is that you commit too early in the game. The risk of committing too early in the game is there's less full unitized providers out there, especially in the West Coast, right? There may be a little bit more on the East Coast, but you commit too early, then you can't go out and price check. what they think they see is that cost trends will continue to go up because, they've committed to me and the opportunity I have to increase my price I'm going to. or be able to use price to de-risk and de-complexify the look of the facade. And I understand that perspective and that happens if you haven't gone through the process before. Again, I always start with the word trust. It requires trust both ways and saying, hey, look, can't do that if I'm a service-driven company because it's gonna limit being used again. The best client I ever have is my repeat customer, right? And so... There's that, but then what we started doing, and I think it's fairly common in the industry now is what we call, and everybody has a different term for it, but a target value process, which is saying, look, even if you have very little detail, if you kind of give me a little bit more of a narrative of what the end looks going to be in the performance levels, we can legitimately get a price that early on, know, within 3 % and say, hey, we're going to stick to this. And then as what we'll do is every iteration of a drawing set release, we'll do a side-by-side comparison of the last budget. If something does change, it'll be broken out that says this change, which was definitely different, has this type of a cost. And when the owner gets to see that at every single step, they can decide, hey, is that worth it? And you're not consistently going three steps forward, three steps back. And we've all seen how that design time, that pre-construction design, it evaporates. before you know it and you're not hitting the deliverables you need. And so this process really, you're making real time decisions with the price. And I think that has been definitely a big evolution. And I think people have gotten a lot more comfortable with that type of a process.
Adrian Lowenstein: let's play devil's advocate to that. Let's say the, let's say the industry decided we're going to adopt this target value design approach or design assist. At the end of the day, you need to pour mud. I mean, that's what you're a manufacturer. You're not an engineering company, even though some people might argue that. So let's say, you know, you got 20 design assist contracts tomorrow. I don't even know if you could resource that or staff that. And so the risk would be you sell all these owners on 50, 100, $200,000 design assist contracts, $500,000 design assist contracts. But 10 % of those jobs move forward. You know, all of a sudden you might be selective about what projects you did and did not want to onboard in that capacity.
Doug Bevier: we've adjusted that a little bit is like, look, we're going to do pre-construction work and helping get to that confidence level. We're going to offer that service for free. Like that's just the cost of doing business. We have to make sure there's enough leads out there. they're fairly sure a job is going to move forward and they're going to go through the construction level documents, we'll have a different part A, part B, and it can cover a different amount of scope. most often it might be pre-construction design assists and maybe through a structural submittal or yeah something like that and then hey we're going to give you a part B for the rest of it and the part B is what as a manufacturer is important to us and having that timeline locked in with labor with backlog with other projects that's where a lot of risk can reside and so what we'll do with this target value price is the reason we're setting a price up front is to say look as long as we hit this budget we get the job. Now, if we go below this budget, go ahead, bid it out. Right. We didn't do our job keeping the design team, the general contractor and any adjacent sub tier sub trade partners in line. Not when I say in line, just mean coordinating to the price. Right. You know, and say that's why we do these pricing deliverables at every drawing release. So if the price does increase, it's because, hey, this was a different scope item. either approve it or don't. And then let's go back to the drawing board. But our whole goal is to maintain that price. And if you do, you want to add a new feature and increase the price, OK, that's the price we're going to be compared to at the end. So it gives me enough confidence to say, look, if I do my job right, and as long as the job continues to move forward, it's ours. In that, I can stand behind. I'm going to give you $500,000, get me through structural submittal. I can't give you any confidence that the job is going to be yours. But it just really comes down to transparent conversations upfront.
Dan Delisle: Yeah, and speaking about, costs and, you know, cost drivers, and you're alluding to it a bit here. It's not always the material costs, most often not the material costs and upfront costs and design costs, but the, you know, the things that quietly multiply labor and time and, know, whether it's profile complexities and and access and sealant work and, you know, the stacking of tolerances in the field. One off conditions. That's a big one. What do you see, Adrian, as some of those quiet adders to cost or multipliers of cost in the field?
Adrian Lowenstein: not doing your quality control testing early on in the project. And I think this is something that truly pisses me off about, I'm watching a job next door go up and I've been doing some videos about it recently, so maybe that'll tell you where I live. But I'm watching and they're already nine stories up and they haven't done their first chamber test. And if the owner already committed to it in the project specifications, we're doing... Six isolated hose tests, two chamber tests, know, one full size, whatever flood test or gutter test. Why would you wait until the end of the project? They already paid for it and they already committed to it. So why would you not get the most use out of that quality control testing? Identify the areas early. I've heard Doug, I've heard you say it a million times. It's just a perimeter caulk joint. If there's an issue, we'll be able to pinpoint it and identify it. But if the facade is 70, 80, 90 % complete, and then you start exposing issues, and you guys know this, once they start looking, they're gonna find things. So it just, all of a sudden, it starts to multiply. and it becomes, you you're chasing your tail as they're trying to dry in and commence with their interior program. So I think the fact that I've seen you guys do in-house chamber testing on your dime, you know, part of your internal protocol, excellent. But for the third party inspectors, auditors, quality control, you know. enforcers on site, think it's a huge, huge, huge mistake to save that until the three-yard line before you're trying to get your TCO.
Doug Bevier: Yeah, right before you get on critical path. Yeah, I mean, I think that is one of the biggest benefits of prefab facades and having, especially when there's multiple trade partners involved is the early QC program. mean, as you, anybody in this industry knows you do enough projects, you're going to have issues like it just, it's going to happen. And I always tell people, just, do you fix the issues? How do you remediate it? Make sure it's on time. And you, at end of the day, the owner gets exactly what they asked for. Um, so.
Adrian Lowenstein: Right.
Doug Bevier: Mine isn't necessarily saying, Hey, yeah, we want the best quality control processes in place to try and catch things early and make sure we're, we're delivering the best quality product. But it's also important, just like you said, Adrian, it's testing early. And if you find an issue, you have time to remediate it so much, that's so much of an advantage with prefabrication because of your, you have two job sites, right? They're, they're doing the earthworks. They're setting foundations, starting to go up on the structure. You're 50 % fabricated on your facade. You go to a traditional stick build system, the structure's built, then they go out. You're already on critical path. You have an issue, I mean, you're screwed. that's what I think one of the biggest advantages is like, yeah, prefab, you're going up fast. I everybody understands that. That's like a global value prop that everybody talks about. But it's not just that. You're minimizing the risk to critical path. That is a value not everybody quite understands. But it's just like, I mean, you got two job sites, quality control, you know what you built is to the spec prior to getting panels on site. Then yeah, you want your final checks as early as possible. Couldn't agree more.
Dan Delisle: you
Adrian Lowenstein: what is the biggest challenge? when you are speaking with an estimator at a general contractor and you know you're being leveled out against all different construction methodologies and system types, and you know that message or that theme or that value proposition is not getting through to the owner, how has your approach, how has your pitch evolved in time to try to get that to resonate with different parties? Do you have to? speak differently to the architect than you're speaking to the consultant than you're speaking to the general contractor to make sure that that message gets through.
Doug Bevier: Adrian if you figure out how to get the messaging to the owner, I make a joke, but it's it is the challenge, right? I mean who is communicating to the owner and it can be different on every job They have separate values that we want to get to the owner and what's hard is a sub trade contractor, nobody likes to talk about it. But at end of the day, if your value goes to a general contractor, and their business model does not align to yours, so their profit centers are something different than yours, doesn't matter what you put on the piece of paper, they're going to message or massage that message to the owner in the best interests of their company, which I understand. And a lot of, let's take an example in the precast industry. Let's say a general contractor who self-reforms cast in place is building a building for an owner. The owner says, I want you to evaluate steel cast in place and precast and put a side-by-side comparison. They wanted to go cast in place. How do you think that messaging is going to go, Adrian?
Adrian Lowenstein: Yeah, I mean, it's in at that point, it's cutting your loss, recognizing that this is not a worthwhile pursuit or not somewhere where you can provide enough value and under recognizing that, that, that avatar ideal client fit or whatever that project profile looks like that's ideal for you.
Doug Bevier: 100 % or the only other option you would have is can somehow we get the appropriate messaging or value to the owner so then they can dictate and have the right feedback to question the contractor. Or I'm using that as an example but you know there's endless of those types of situations where yeah I mean if your messaging is being telephoned. We all played that game as a kid, right? You go in a circle, you tell the guy to the left something, by the time it comes all the way around, it's something completely different. That's the exact same stuff that happens in construction, right? The more people that you're communicating to and they communicate to somebody else, somebody else, somebody else, it's challenging. then depending on how the bid process is set up, sometimes the estimating leveler is just simply somebody with less experience than you would want. And so what they're looking at is a spreadsheet trying to, they're doing their job to the best of their ability, right? They're trying to put everything in the right buckets and compare it. What that doesn't do is it never shows total value. So there's a price tag, but what's the dollar value for reduced risk on schedule? What's the dollar value for finding quality control issues early? Right? There might not be one. or they may not have the expertise to be able to kind of put that down on paper. And so that's what the challenging thing is, is when an owner gets a spreadsheet that says, here's some dollars per square foot, you decide. It's like that is, I mean, an initial small price delta can be pretty consequential compared to risk of delivery of the project, especially depending on the market sector that you're looking at.
Adrian Lowenstein: without making it too much of a product pitch. CCAP or Infinite Facade, a lightweight, pre-glazed, pre-cast system that can accommodate seismic movement. Would you consider it a universal product? I if I think about the projects we've done in Humboldt in a very wet area, in a remote... region that had challenges with their labor force all the way down to, you know, projects that are produced in Atlanta where we had challenges with adhesion because the metal was going above 120 degrees Fahrenheit. So you're dealing with extremities here. So would you say generally from a sales product offering standpoint, it is a very universal product?
Dan Delisle: When you have a system that's already had meaningful testing, meaningful presence in the industry and in place for so many years, that existing body of evidence can go a long way in building confidence with any owner, developer, specifier, building envelope consultant, project team. And that discussion starts to become less you know, do we trust this system and more, what still needs to be validated about this specific project or this specific location? And so that's what this system really does for us.
Doug Bevier: Yeah, and I think with facade or envelopes, it's a little bit easier to kind of envelope different regions, wind, seismic forces, having less of an impact on the actual pre-designed panel design. So our goal is to keep it simple, right? Unless it had a major effect, we wanted to try and have one product design that works for all regions, whether you're in high seismic, low seismic, high wind, low wind. And yeah, there may be some differences in how you manufacture the materials that we're using, depending on the climate. we took a kind of a different approach, it would be with our pre-designed structures, because seismic and wind can have such a great effect on the design. So in those cases, we do have project-specific designs for, let's say, high, medium, low seismic or different. different amount of levels per elevation. So the structure can get a little bit more complex, but there's enough value to say, hey, instead of one product, we're going to have four or four options, right? Dan really is the guy leading that. And it was all about how do we keep this as simple as possible? So when we have an architect or a design team or a contractor doing the fourth or fifth job with us, no matter where the location at, it's relatively exactly the same. There are going to be some small nuances. Let's take the two jobs we did together, Adrian. You had humble, wet, very wet climate near the ocean, one of the highest seismic zones in all of California, the highest seismic state in the lower. Yeah. Everything worked out. And so there was a little nuance to some of the weld sizes, for example.
Dan Delisle: We had an earthquake during construction. Yeah.
Doug Bevier: more or less for the guys in the shop, for the guys producing the panels, all the same as compared to the job we did together in San Diego with the most temperate climate, much lower, I mean, there's still seismic, but much lower seismic. And at the end of the day, the internal guts of the panels stay the same. And we're even utilizing that at UC Santa Barbara right now on another student housing project. so. Our goal was to keep something repeatable that then once you educate a design firm or a general contractor on the system, they understand it. And then the next job's going to go that much pain free or more pain free back in the old days for the first 40 years of our existence, every single job was custom. So you may have the exact same contractor, the exact same architect, and they're like, the details are different. The connections are different. It's just a lot of wasted fat. And we really took that from your industry, right? I mean you guys curtain wall window wall windows have been putting together standard product designs for a long long time and I Don't know why the precast industry didn't wake up sooner
Adrian Lowenstein: Well, okay, so this one's for Dan. So something that's been not as relevant in the hotter climate zones, but in colder climate zones. The way we do therm analysis for glazing systems at least takes a 2D cut in a steady state condition. So we have our boundary conditions and it looks at it in one condition. It doesn't consider all these. nighttime and daytime conditions and winter and summer. And so a lot of the conclusions we're making around thermal performance of glazing systems has been incomplete. And so the result has been a lot of new construction curtain wall projects are experiencing extensive condensation and cold spots and areas that weren't otherwise anticipated. And so is that a learning lesson for the current wall industry, for the design community? Are the modeling tools and software somewhat incomplete? Yes. So I don't think anybody's necessarily at fault. What have you learned either about precast or sealants in time that maybe 10 years ago you looked at it differently that now you you guys are waking up to or reassessing or your outlook is evolving. I mean, know something like sealant, especially your panel to panel joints, you'll probably say that thing, if executed properly, should perform 30, 40, 50 years. But I think precast is still very misunderstood as a material in terms of where does your air, air, vapor barrier line fall? when comparing a two and a quarter inch or two and a half inch skin versus eight inch deep skin, how should it be assessed? Should we be using sandwich panels? Where should the insulation lie? Is the precast concrete industry constantly evolving when it comes to, forget aesthetics for a second, I mean, from a performance standpoint?
Dan Delisle: we talked about earlier different facade interface detailing and materials and where I should say trouble, but also interesting problems typically show up is at those interfaces and you know, what was intended in the detail versus, you know, what the panel, the frame, the sealant lines, you know, all of the things that come together actually do. And when you can't just have a big block that's ubiquitous or, you know, uniform, and you want things that are interesting, which you talked about before, which we integrate with. and have seen a ton of curtain wall and window wall and brick and then you'll have a cast and play section and some precast that goes in or infinite facade that goes in. Those interfaces need to be locked in early. They need to be well understood and you need to have a project team that really knows how to move. through the SD and to the CD and into the production and into the field. I think that's what makes it interesting. And to answer your question, yeah, it's always evolving because you're always going to have that, right? And you're always going to have the differences in location and you're always going to have differences in logistics to those locations and the different preferences of the end user.
Adrian Lowenstein: But I think at some point it comes down to interface conditions are always going to rely on workmanship. So the question of workmanship, you'll never have a hundred percent perfection. And so if you have pinholes or discontinuities or whatever it is needs to be addressed. And one thing that I think is not talked about enough is in your long format, 30 foot wide panel. you're eliminating three vertical stack joints that otherwise would be a 10 by 10 curtain wall module. All of a sudden, if you have a 30 by 10 panel, think about those joints that could all of a sudden either be eliminated or dealt with in the plant.
Dan Delisle: Right, and you know where the issues are and you're not talking about a thousand penetrations through something which then gets some rain screen outside of it so that you can never see them again unless you go in and remove that additional material or cladding element. And that is one place of failure that is known. So you know where it fails, if it's going to fail. And then you can very quickly fix it and you don't need to go back and address it. You can even have some, you know, part of your maintenance criteria for that building be that, you know, if that thing happens here, then you can fix it. Before that, hopefully you're looking at some quality control testing to make sure that you do not have those issues. Yeah, workmanship, no workmanship is 100%. We go through some, as you know, very rigorous testing both in the production facility, but also in the field after everything is put up. We go in at 10 % and 50 % and beyond to make sure that we have good workmanship. And that's well known in the industry with a number of contractors, but it should be all contractors, right?
Adrian Lowenstein: How have you guys been managing this, especially you guys are huge deals of not supplier purchaser of steel. So, you know, the two big things this country we got hit with in terms of importing is aluminum and steel. So as part of the earlier conversation with your target value design, informing the project teams that there's design changes is one thing, managing expectations when it comes to escalation and buyouts is a whole different challenge. So has it been very top of mind the past four to six months?
Doug Bevier: I would say not necessarily that big of a risk for us. And I'll explain why. I would say there was a little bit of a period during COVID when we saw those, you never saw it coming. And so people were not prepared. yeah, some people got really hurt and there were some hard conversations. But it was so drastic and affected everybody in the industry. It at least allowed for those conversations to happen. That said, one thing I appreciate about precast is that, we are limited by how far logistically you're shipping large scale panels. so almost everything that we're producing and other precasters are producing are domestic products. Sure, some of the steel runs and mills that we need are coming from, are going to be affected by steel prices, but much smaller amounts than what you see in other industries. So for example, when we talk structures and you had a 10 % increase on steel costs, it affected us maybe 1%, 2%. And so at the end of the day, this is a risky business. I mean, our owners, they talk about that all the time. Their houses are on the line if this thing goes under. And you have to take that mentality when you're thinking about selling projects. But at the end of the day, our clients are looking for somebody to stand by their word, regardless of the risk factors that are out there. And so we have to price that in. We do expose, hey, this is what I'd be carrying in escalation. Right. And sometimes I'm going to get hit a little bit. And sometimes that money comes back because we didn't have as much. And so, you know, at the end of the day, it's a nut sum zero game. We are always looking at it, trying to figure out how do we de-risk ourselves? How do we procure material like the raw material as early as possible? Doesn't mean we need to cut it, weld it together, fabricate it to the panels. But if we can secure the materials, you're going to get that price you bid it at, right. As soon as you can. And so one thing that switching to a productized product delivery has allowed us to do is that you're locking in your, when we're talking facades, we're locking in our reinforcement, our frame materials, our connection types. When we're talking structures, we know what type of strand reinforcement and things of that nature. And so you're not waiting for your deferred submittal to get approved before you're procuring materials. That is a huge value that we don't talk about enough in kind of what I call the prioritization movement throughout the construction industry. And I think once you go through a couple of jobs, you're like, holy cow, that is such an advantage. We got to fit within this box. And I think the other thing that is challenging, sorry to get on my soapbox here, but it's challenging on these larger scale product prefabs. Curtain wall, lots of providers, lot of standards out there. You can really procure from anywhere, any place, and you can still make a budget. Your logistic costs are nearly as high, things of that nature. Well, when you get into like these custom, I'll call it the custom prefab more or less, the details are different from every single fabricator out there. Right. And so some of the challenges has been, well, you know, this is not how it's done in Tennessee and this isn't how it's done in Texas. And I'm Kaiser and I got hospitals in every state. I want the same product. I want the same details. Right. So yeah, you can de-risk me in the West coast, but what's going on on the East coast? And so I think what you're seeing is you know, whether it's at the industry level, like for the precast, for example, the precast concrete Institute, or just larger firms saying, Hey, let's, let's come up with some type of a consortium so we can give our clients the same or very similar products coast to coast. I've enjoyed this conversation. Every time we get together, have a lot of fun conversing about why precast is the best product in the industry. But no, I'm just kidding. As a closing, I would like to just kind of ask, why are you so passionate about prefabrication? Obviously your background is in glazing, but then you've morphed into this voice for the prefab industry as a whole, and then really built a following with coordinating adjacent scopes like precast and glass together. And I can't think that's possible without just extreme passion for what you do. So what drives you each day?
Adrian Lowenstein: I think it's, it's seen the reactions of the project teams after project completion, because when you have buy-in early on that they're going the prefabricated route, all of a sudden, and you're successful owner hits his budget architect can meet their design intent contractor can leave profitable. And I think the worst thing in the world is going around looking at project you lost or maybe a project you didn't pursue and hearing the architect say, that's not what I designed or, know, we wanted more articulation there. a different material there and it got VE'd out. So I think when you get everybody sort of singing the same song and you know a little kumbaya going on and in sync in that design build target value design effort and then I mean even look at the dorm projects we've done I feel like and this multifamily project we've done. project team is thrilled. And I think the biggest, and I don't think that's me or you or anybody. I think it was everybody being in sync and on the same page. And so I think the takeaway is finding a way to better communicate that to the owner because there are very few unitized prefab jobs where for the most part, the project team goes back and says, you know what? I regret doing that approach.
Doug Bevier: Yeah, I love that answer. If anybody wants to see what Skyline and the work Adrian's helped us do, go check out the Broderick in San Diego. Anyways, Adrian, I look forward to connecting again very soon.
Adrian Lowenstein: Thanks, guys.
Dan Delisle: Yeah, thanks Adrian.
Adrian Lowenstein: course, my name is Adrian. I actually started on the envelope consulting side, kind of like Dan. And so, you know, I've, I've seen Dan with his forensic hat on and I can appreciate his performance driven perspective, but even though I spent a good amount of time on the window manufacturing and contracting side, I always looked at facades from performance standpoint and tried to look at the holistic picture of the envelope. so working with you guys, it's given me an appreciation in terms of being in a position where you're owning the full envelope, having to own the opaque elements, the glazing elements, the interface conditions, the waterproofing, the air tightness, thermal continuity, puts a lot of pressure on your engineer. team. So, you I think it's something you guys probably set out a standard that you're, from a company standpoint and an offering standpoint, you were looking to set a high precedent or bar, but it's something that is probably very difficult to replicate for other companies and for owners and end users to find, you know, even competition that wants to come to market with that approach. Would you agree?
Doug Bevier: I would, think partly on the West Coast is a little bit different than I would say precast in other areas of the US. There was a lot of high-end facade precasters and part of just the cost of doing business was figuring out how to get full facade panels fully dried in prior to getting to the job site. And that was a real challenge historically because precasters are precasters, glass guys are glass guys. And really this developed back in the nineties and early two thousands, where we'd be threading a needle with field logistics. the wherever the pre-caster was, they would fabricate panels. They would load them on a load. They would ship them to a glazer to install windows. They would have 24 hours to install the windows and then get it to the job site for just in time erection. And you can imagine the amount of just logistical hiccups you would have with that. And, so there was a company. that started doing pre-installed glazing. And it was really because they were a glazing company that then started doing precast. And once they entered our market, that was what everybody wanted. There were some other advantages of doing it in the plant facility. Number one, better working conditions, doing it in storage versus on a truck. You would have more time to install the windows, seal everything, let everything cure. So again, just taking as much stuff off the site. So we really were kind of pushed into it and I would say most people started with Just partnerships or a glazer may come into your plant and we said no we want to look at it holistically because the challenge was You know, you'd have the glass guy or the window or the louver whoever saying hey I'm gonna design something that's in the best interest for me that reduces the most amount of risk that gives me the best price and the best margins and rightfully so the pre caster would be doing the same thing and what would end up happening, would be a lot of times it could be a battle. And at the end of the day, the owner and the general contractor weren't getting the best value for the site because something might make something a little bit more challenging for the precast, but a lot easier and a lot more value to the class or vice versa. Instead of just two people looking at it like, hey, we're just going to do things with the best interest of ourselves. And that was challenging, right? Trying to learn a whole new product. when you have historically a lot of guys that are specialists in one area. And so we came up and the reason I bring this up is that's how I met Adrian. Adrian was an envelope consultant. Also, we worked together on a few projects with other companies that he worked with and we needed to have that technical advice from somebody who could put it into precast terms and we could look at projects together in a pursuit versus a subcontractor. or subcontractor relationship. And so I think that was the real value that really helped us evolve. what I thought was very unique about your approach historically is that you kind of went after this precast prefab industry saying, hey, there is a need across the nation to get this value to the owner. And you said, hey, there's a niche here. that I can be a subject expert in and help these people. And so I wanted to start with asking, like, how did you identify that? And then we can maybe get into some of the lessons learned you've had over the years and how you've evolved your approach with this total prefab envelope.
Adrian Lowenstein: funny from the outside, actually don't look at you guys like a precaster, even though you might identify yourself as a precaster. I mean, maybe I would think more of a whole building solution provider, especially with some of the parking offerings you guys have and structural offerings you have. it's a mentality and willingness to want to get outside of your comfort zone. And I think it's very easy for Window window suppliers, like you said, to be afraid of interface conditions, to be afraid of masonry, to be afraid of waterproofing and vice versa, precasters to not want to touch glazing. And in what I can now say years of doing this from the precaster unitizer standpoint, there has to be a willingness to want to take on scope that might fall outside of their comfort zone. And that goes way beyond a strong estimating team and a strong pre con team. I think the. major major stress and challenge and burden falls on project management and operations. because when it comes to sourcing those material, testing those material, installing those materials, understanding the logistics of all of it is when a lot of the burden falls on those particular members, especially when they then go back and point at the sales guys and say, what did you sell and what did you leave in my hands? And so I think it has to be a company wide willingness and mentality to... want to own the full envelope and be that single source solution. I mean, have you guys struggled in getting that mentality adopted throughout all stages of the life cycle?
Dan Delisle: I'd say really what we're talking about is that we own everything or can own everything and Carpacific is really good at design, manufacturing, logistics, installation. so we have broken that mold of facade design, handing it over and just seeing what happens. and making it, you know, or stopping it from being abstract, really, it's this, you know, and you're really good at this too, Adrian, I know, because we've had a few projects together, and what stood out to me the most on some of those is that the conversation very quickly turned from this high-level design and 2D prints to actual talking about production, which you're familiar with, and talking about the field. you know, shop drawings and sealing and spray foam and, you know, chipping and caulking and we, you and I and Doug and the rest of the teams have worked through all of those things before there was a handoff to production to actually go do those things. So, you know, I really appreciate that about working with you and the way that Clark Pacific does stuff and gets construction done. For you, what would you say, what's the most revealing within that context to really get a strong start with your project teams and really understand that, Someone's got to carry this all the way through to the beginning, from the beginning to the end, and have a happy client.
Adrian Lowenstein: Anyone? I keep pointing back to project management because it's so critical because they really are that interface between operations and pre-con. And I think you run into a lot of challenges when you separate precast elements from all your accessory elements between louvers and caulking and insulation and windows, because immediately it turns into that finger pointing competition. And I think if you have a project owner, project executive that might oversee a glazing project manager and then a precast project manager and can be that glue between the two of them making sure they're working together. The minute you start splitting these things up and subcontracting this and outsourcing this, things can go south really quickly. And I think something I really appreciated about you guys is that you had in-house glazers. For the most part, every time we were working together, there were in-house glazing experts. And so if glass replacement was required or if certain adhesion testing was required at your mitered corner of the window, they were able to speak to the window manufacturer in that same language. And so they could then be that bridge between Clark Pacific and the individual suppliers. But you guys only got to this point because you've done so many projects and have such a vast portfolio that you can afford to have that level of on staff, on payroll consistently throughout moving forward. But for new precasters entering the market, I think that's probably the most burdensome challenge to overcome. It's having that level of expertise in all specific areas.
Doug Bevier: I think it's kind of similar to a subcontractor and a GC relationship. You have to have trust between the partners first and foremost. And then you have to have some technical knowledge back and forth on the systems, right? And I think sometimes you learn a little bit that on project one, you learn a little bit more about it on project two, and then you keep going. I think, you know, a lot of us, maybe in your age group, that remember this industry as design, bid, build. And again, was, qualify everything. As soon as the job goes in, things change, change order. That's just how construction operated and everybody was protect. mean, frankly, it's just protect your own ass. And we've seen a major shift to this design build world where it's not, that's not how you're doing work. And it's more of a service driven value. And you got to take that same approach when you're looking at, you know, partnering, either partnering or having a sub sub to your contractor, like a glazer come in and you got to say, hey, look, we got to both understand each other's systems at some type of a base level. So we're working together. And I think that's where we've had the most amount of most amount of success. And again, every project manager is different. Every job can have a different experience. But if you take that mindset, I think we've had a lot more success throughout the years.
Adrian Lowenstein: especially in the West coast, when you see this merge between glazing and precast, which I think is unique to anywhere else in the world. I've seen your sales process and outlook evolve in that, know, traditionally or historically, precasters try to sell against window wall and curtain wall and vice versa. The unitizers on the curtain wall side are going to say, it's a pain in the ass, you need a tower crane, it's going to slow down your schedule. I've seen you shift your outlook in saying, you know what, they want curtain wall on this out elevation or, know, they need this type of cladding or this shading element on this current wall on this other elevation. Let's figure out how to make the holistic picture work. So instead of fighting against EFIS or fighting against curtain wall, different elevations might have different requirements from an aesthetic, heritage, performance standpoint. So instead of fighting it, embracing it, and then seeing how can Clark Pacific then provide the most value.
Doug Bevier: Yeah, appreciate that, Adrian. I think that is a different shift in mindset. And I think that it definitely helped as we started bringing on more more scopes. And we've done metal panels, we've done doors, we've done curtain wall, we've done window wall, and saying, hey, we want to shift our mindset to being a full facade provider. Now we specialize in precast and we're going to look at jobs that have more precast scope than others, but saying, hey, we still want to offer that value. we also got to look in the mirror and say, I get it. Precast is great in these areas. It may be better product in these smaller areas or custom where it matters. Like there is the best solution for the project and rather than fight it, say, hey, how do we de-risk this for all parties? You know, from the precasters perspective, the glazer perspective, the GC's perspective, and most importantly, the owner's perspective. And then say, hey, let's come together and work on a system where adjacent systems are coming together that have no detailing and that we can stand behind, right? versus always trying to convert the scope to what's best for me. Right. And I think that's been a big shift in the market as well as subcontractors are getting access to owners at earlier phases in pursuits than we've ever experienced in this industry. You know, just 10 years ago, everything we saw was CD construction development level drawings. I would say majority of the projects we are getting engaged at are schematic level design when they sent out the RFP, we were at 50 % SDs. And it was like, hey, this is a general what we needed to look like. And we needed to develop it together. And that I think is the biggest shift that I've seen in the industry. we, I think that's where the owner gets the most value and where we can work together. And you say, let's bring on these experts, get them in a room and we'll come up with, hey, this is our must have, should have, could have, how do we deliver that with as few contractors as possible, but still get the design intent we're looking for? Have you seen that in other regions when you're working with other precasters like Wells and Tindal's of the world?
Adrian Lowenstein: I think undoubtedly the earlier an owner commits or a GC commits to panelizing, the higher chance of success for you guys, I would think. You want to get in early. In other regions, especially New York, you can't imagine the amount of hand-laid brick you see. And they still do GFRC and precast components like parts and pieces or column covers and spandrels. Let's flip that and play devil's advocate. What is the risk in an owner committing to prefab or unitized too early in the game?
Doug Bevier: What I've heard is that you commit too early in the game. The risk of committing too early in the game is there's less full unitized providers out there, especially in the West Coast, right? There may be a little bit more on the East Coast, but you commit too early, then you can't go out and price check. what they think they see is that cost trends will continue to go up because, they've committed to me and the opportunity I have to increase my price I'm going to. or be able to use price to de-risk and de-complexify the look of the facade. And I understand that perspective and that happens if you haven't gone through the process before. Again, I always start with the word trust. It requires trust both ways and saying, hey, look, can't do that if I'm a service-driven company because it's gonna limit being used again. The best client I ever have is my repeat customer, right? And so... There's that, but then what we started doing, and I think it's fairly common in the industry now is what we call, and everybody has a different term for it, but a target value process, which is saying, look, even if you have very little detail, if you kind of give me a little bit more of a narrative of what the end looks going to be in the performance levels, we can legitimately get a price that early on, know, within 3 % and say, hey, we're going to stick to this. And then as what we'll do is every iteration of a drawing set release, we'll do a side-by-side comparison of the last budget. If something does change, it'll be broken out that says this change, which was definitely different, has this type of a cost. And when the owner gets to see that at every single step, they can decide, hey, is that worth it? And you're not consistently going three steps forward, three steps back. And we've all seen how that design time, that pre-construction design, it evaporates. before you know it and you're not hitting the deliverables you need. And so this process really, you're making real time decisions with the price. And I think that has been definitely a big evolution. And I think people have gotten a lot more comfortable with that type of a process.
Adrian Lowenstein: let's play devil's advocate to that. Let's say the, let's say the industry decided we're going to adopt this target value design approach or design assist. At the end of the day, you need to pour mud. I mean, that's what you're a manufacturer. You're not an engineering company, even though some people might argue that. So let's say, you know, you got 20 design assist contracts tomorrow. I don't even know if you could resource that or staff that. And so the risk would be you sell all these owners on 50, 100, $200,000 design assist contracts, $500,000 design assist contracts. But 10 % of those jobs move forward. You know, all of a sudden you might be selective about what projects you did and did not want to onboard in that capacity.
Doug Bevier: we've adjusted that a little bit is like, look, we're going to do pre-construction work and helping get to that confidence level. We're going to offer that service for free. Like that's just the cost of doing business. We have to make sure there's enough leads out there. they're fairly sure a job is going to move forward and they're going to go through the construction level documents, we'll have a different part A, part B, and it can cover a different amount of scope. most often it might be pre-construction design assists and maybe through a structural submittal or yeah something like that and then hey we're going to give you a part B for the rest of it and the part B is what as a manufacturer is important to us and having that timeline locked in with labor with backlog with other projects that's where a lot of risk can reside and so what we'll do with this target value price is the reason we're setting a price up front is to say look as long as we hit this budget we get the job. Now, if we go below this budget, go ahead, bid it out. Right. We didn't do our job keeping the design team, the general contractor and any adjacent sub tier sub trade partners in line. Not when I say in line, just mean coordinating to the price. Right. You know, and say that's why we do these pricing deliverables at every drawing release. So if the price does increase, it's because, hey, this was a different scope item. either approve it or don't. And then let's go back to the drawing board. But our whole goal is to maintain that price. And if you do, you want to add a new feature and increase the price, OK, that's the price we're going to be compared to at the end. So it gives me enough confidence to say, look, if I do my job right, and as long as the job continues to move forward, it's ours. In that, I can stand behind. I'm going to give you $500,000, get me through structural submittal. I can't give you any confidence that the job is going to be yours. But it just really comes down to transparent conversations upfront.
Dan Delisle: Yeah, and speaking about, costs and, you know, cost drivers, and you're alluding to it a bit here. It's not always the material costs, most often not the material costs and upfront costs and design costs, but the, you know, the things that quietly multiply labor and time and, know, whether it's profile complexities and and access and sealant work and, you know, the stacking of tolerances in the field. One off conditions. That's a big one. What do you see, Adrian, as some of those quiet adders to cost or multipliers of cost in the field?
Adrian Lowenstein: not doing your quality control testing early on in the project. And I think this is something that truly pisses me off about, I'm watching a job next door go up and I've been doing some videos about it recently, so maybe that'll tell you where I live. But I'm watching and they're already nine stories up and they haven't done their first chamber test. And if the owner already committed to it in the project specifications, we're doing... Six isolated hose tests, two chamber tests, know, one full size, whatever flood test or gutter test. Why would you wait until the end of the project? They already paid for it and they already committed to it. So why would you not get the most use out of that quality control testing? Identify the areas early. I've heard Doug, I've heard you say it a million times. It's just a perimeter caulk joint. If there's an issue, we'll be able to pinpoint it and identify it. But if the facade is 70, 80, 90 % complete, and then you start exposing issues, and you guys know this, once they start looking, they're gonna find things. So it just, all of a sudden, it starts to multiply. and it becomes, you you're chasing your tail as they're trying to dry in and commence with their interior program. So I think the fact that I've seen you guys do in-house chamber testing on your dime, you know, part of your internal protocol, excellent. But for the third party inspectors, auditors, quality control, you know. enforcers on site, think it's a huge, huge, huge mistake to save that until the three-yard line before you're trying to get your TCO.
Doug Bevier: Yeah, right before you get on critical path. Yeah, I mean, I think that is one of the biggest benefits of prefab facades and having, especially when there's multiple trade partners involved is the early QC program. mean, as you, anybody in this industry knows you do enough projects, you're going to have issues like it just, it's going to happen. And I always tell people, just, do you fix the issues? How do you remediate it? Make sure it's on time. And you, at end of the day, the owner gets exactly what they asked for. Um, so.
Adrian Lowenstein: Right.
Doug Bevier: Mine isn't necessarily saying, Hey, yeah, we want the best quality control processes in place to try and catch things early and make sure we're, we're delivering the best quality product. But it's also important, just like you said, Adrian, it's testing early. And if you find an issue, you have time to remediate it so much, that's so much of an advantage with prefabrication because of your, you have two job sites, right? They're, they're doing the earthworks. They're setting foundations, starting to go up on the structure. You're 50 % fabricated on your facade. You go to a traditional stick build system, the structure's built, then they go out. You're already on critical path. You have an issue, I mean, you're screwed. that's what I think one of the biggest advantages is like, yeah, prefab, you're going up fast. I everybody understands that. That's like a global value prop that everybody talks about. But it's not just that. You're minimizing the risk to critical path. That is a value not everybody quite understands. But it's just like, I mean, you got two job sites, quality control, you know what you built is to the spec prior to getting panels on site. Then yeah, you want your final checks as early as possible. Couldn't agree more.
Dan Delisle: you
Adrian Lowenstein: what is the biggest challenge? when you are speaking with an estimator at a general contractor and you know you're being leveled out against all different construction methodologies and system types, and you know that message or that theme or that value proposition is not getting through to the owner, how has your approach, how has your pitch evolved in time to try to get that to resonate with different parties? Do you have to? speak differently to the architect than you're speaking to the consultant than you're speaking to the general contractor to make sure that that message gets through.
Doug Bevier: Adrian if you figure out how to get the messaging to the owner, I make a joke, but it's it is the challenge, right? I mean who is communicating to the owner and it can be different on every job They have separate values that we want to get to the owner and what's hard is a sub trade contractor, nobody likes to talk about it. But at end of the day, if your value goes to a general contractor, and their business model does not align to yours, so their profit centers are something different than yours, doesn't matter what you put on the piece of paper, they're going to message or massage that message to the owner in the best interests of their company, which I understand. And a lot of, let's take an example in the precast industry. Let's say a general contractor who self-reforms cast in place is building a building for an owner. The owner says, I want you to evaluate steel cast in place and precast and put a side-by-side comparison. They wanted to go cast in place. How do you think that messaging is going to go, Adrian?
Adrian Lowenstein: Yeah, I mean, it's in at that point, it's cutting your loss, recognizing that this is not a worthwhile pursuit or not somewhere where you can provide enough value and under recognizing that, that, that avatar ideal client fit or whatever that project profile looks like that's ideal for you.
Doug Bevier: 100 % or the only other option you would have is can somehow we get the appropriate messaging or value to the owner so then they can dictate and have the right feedback to question the contractor. Or I'm using that as an example but you know there's endless of those types of situations where yeah I mean if your messaging is being telephoned. We all played that game as a kid, right? You go in a circle, you tell the guy to the left something, by the time it comes all the way around, it's something completely different. That's the exact same stuff that happens in construction, right? The more people that you're communicating to and they communicate to somebody else, somebody else, somebody else, it's challenging. then depending on how the bid process is set up, sometimes the estimating leveler is just simply somebody with less experience than you would want. And so what they're looking at is a spreadsheet trying to, they're doing their job to the best of their ability, right? They're trying to put everything in the right buckets and compare it. What that doesn't do is it never shows total value. So there's a price tag, but what's the dollar value for reduced risk on schedule? What's the dollar value for finding quality control issues early? Right? There might not be one. or they may not have the expertise to be able to kind of put that down on paper. And so that's what the challenging thing is, is when an owner gets a spreadsheet that says, here's some dollars per square foot, you decide. It's like that is, I mean, an initial small price delta can be pretty consequential compared to risk of delivery of the project, especially depending on the market sector that you're looking at.
Adrian Lowenstein: without making it too much of a product pitch. CCAP or Infinite Facade, a lightweight, pre-glazed, pre-cast system that can accommodate seismic movement. Would you consider it a universal product? I if I think about the projects we've done in Humboldt in a very wet area, in a remote... region that had challenges with their labor force all the way down to, you know, projects that are produced in Atlanta where we had challenges with adhesion because the metal was going above 120 degrees Fahrenheit. So you're dealing with extremities here. So would you say generally from a sales product offering standpoint, it is a very universal product?
Dan Delisle: When you have a system that's already had meaningful testing, meaningful presence in the industry and in place for so many years, that existing body of evidence can go a long way in building confidence with any owner, developer, specifier, building envelope consultant, project team. And that discussion starts to become less you know, do we trust this system and more, what still needs to be validated about this specific project or this specific location? And so that's what this system really does for us.
Doug Bevier: Yeah, and I think with facade or envelopes, it's a little bit easier to kind of envelope different regions, wind, seismic forces, having less of an impact on the actual pre-designed panel design. So our goal is to keep it simple, right? Unless it had a major effect, we wanted to try and have one product design that works for all regions, whether you're in high seismic, low seismic, high wind, low wind. And yeah, there may be some differences in how you manufacture the materials that we're using, depending on the climate. we took a kind of a different approach, it would be with our pre-designed structures, because seismic and wind can have such a great effect on the design. So in those cases, we do have project-specific designs for, let's say, high, medium, low seismic or different. different amount of levels per elevation. So the structure can get a little bit more complex, but there's enough value to say, hey, instead of one product, we're going to have four or four options, right? Dan really is the guy leading that. And it was all about how do we keep this as simple as possible? So when we have an architect or a design team or a contractor doing the fourth or fifth job with us, no matter where the location at, it's relatively exactly the same. There are going to be some small nuances. Let's take the two jobs we did together, Adrian. You had humble, wet, very wet climate near the ocean, one of the highest seismic zones in all of California, the highest seismic state in the lower. Yeah. Everything worked out. And so there was a little nuance to some of the weld sizes, for example.
Dan Delisle: We had an earthquake during construction. Yeah.
Doug Bevier: more or less for the guys in the shop, for the guys producing the panels, all the same as compared to the job we did together in San Diego with the most temperate climate, much lower, I mean, there's still seismic, but much lower seismic. And at the end of the day, the internal guts of the panels stay the same. And we're even utilizing that at UC Santa Barbara right now on another student housing project. so. Our goal was to keep something repeatable that then once you educate a design firm or a general contractor on the system, they understand it. And then the next job's going to go that much pain free or more pain free back in the old days for the first 40 years of our existence, every single job was custom. So you may have the exact same contractor, the exact same architect, and they're like, the details are different. The connections are different. It's just a lot of wasted fat. And we really took that from your industry, right? I mean you guys curtain wall window wall windows have been putting together standard product designs for a long long time and I Don't know why the precast industry didn't wake up sooner
Adrian Lowenstein: Well, okay, so this one's for Dan. So something that's been not as relevant in the hotter climate zones, but in colder climate zones. The way we do therm analysis for glazing systems at least takes a 2D cut in a steady state condition. So we have our boundary conditions and it looks at it in one condition. It doesn't consider all these. nighttime and daytime conditions and winter and summer. And so a lot of the conclusions we're making around thermal performance of glazing systems has been incomplete. And so the result has been a lot of new construction curtain wall projects are experiencing extensive condensation and cold spots and areas that weren't otherwise anticipated. And so is that a learning lesson for the current wall industry, for the design community? Are the modeling tools and software somewhat incomplete? Yes. So I don't think anybody's necessarily at fault. What have you learned either about precast or sealants in time that maybe 10 years ago you looked at it differently that now you you guys are waking up to or reassessing or your outlook is evolving. I mean, know something like sealant, especially your panel to panel joints, you'll probably say that thing, if executed properly, should perform 30, 40, 50 years. But I think precast is still very misunderstood as a material in terms of where does your air, air, vapor barrier line fall? when comparing a two and a quarter inch or two and a half inch skin versus eight inch deep skin, how should it be assessed? Should we be using sandwich panels? Where should the insulation lie? Is the precast concrete industry constantly evolving when it comes to, forget aesthetics for a second, I mean, from a performance standpoint?
Dan Delisle: we talked about earlier different facade interface detailing and materials and where I should say trouble, but also interesting problems typically show up is at those interfaces and you know, what was intended in the detail versus, you know, what the panel, the frame, the sealant lines, you know, all of the things that come together actually do. And when you can't just have a big block that's ubiquitous or, you know, uniform, and you want things that are interesting, which you talked about before, which we integrate with. and have seen a ton of curtain wall and window wall and brick and then you'll have a cast and play section and some precast that goes in or infinite facade that goes in. Those interfaces need to be locked in early. They need to be well understood and you need to have a project team that really knows how to move. through the SD and to the CD and into the production and into the field. I think that's what makes it interesting. And to answer your question, yeah, it's always evolving because you're always going to have that, right? And you're always going to have the differences in location and you're always going to have differences in logistics to those locations and the different preferences of the end user.
Adrian Lowenstein: But I think at some point it comes down to interface conditions are always going to rely on workmanship. So the question of workmanship, you'll never have a hundred percent perfection. And so if you have pinholes or discontinuities or whatever it is needs to be addressed. And one thing that I think is not talked about enough is in your long format, 30 foot wide panel. you're eliminating three vertical stack joints that otherwise would be a 10 by 10 curtain wall module. All of a sudden, if you have a 30 by 10 panel, think about those joints that could all of a sudden either be eliminated or dealt with in the plant.
Dan Delisle: Right, and you know where the issues are and you're not talking about a thousand penetrations through something which then gets some rain screen outside of it so that you can never see them again unless you go in and remove that additional material or cladding element. And that is one place of failure that is known. So you know where it fails, if it's going to fail. And then you can very quickly fix it and you don't need to go back and address it. You can even have some, you know, part of your maintenance criteria for that building be that, you know, if that thing happens here, then you can fix it. Before that, hopefully you're looking at some quality control testing to make sure that you do not have those issues. Yeah, workmanship, no workmanship is 100%. We go through some, as you know, very rigorous testing both in the production facility, but also in the field after everything is put up. We go in at 10 % and 50 % and beyond to make sure that we have good workmanship. And that's well known in the industry with a number of contractors, but it should be all contractors, right?
Adrian Lowenstein: How have you guys been managing this, especially you guys are huge deals of not supplier purchaser of steel. So, you know, the two big things this country we got hit with in terms of importing is aluminum and steel. So as part of the earlier conversation with your target value design, informing the project teams that there's design changes is one thing, managing expectations when it comes to escalation and buyouts is a whole different challenge. So has it been very top of mind the past four to six months?
Doug Bevier: I would say not necessarily that big of a risk for us. And I'll explain why. I would say there was a little bit of a period during COVID when we saw those, you never saw it coming. And so people were not prepared. yeah, some people got really hurt and there were some hard conversations. But it was so drastic and affected everybody in the industry. It at least allowed for those conversations to happen. That said, one thing I appreciate about precast is that, we are limited by how far logistically you're shipping large scale panels. so almost everything that we're producing and other precasters are producing are domestic products. Sure, some of the steel runs and mills that we need are coming from, are going to be affected by steel prices, but much smaller amounts than what you see in other industries. So for example, when we talk structures and you had a 10 % increase on steel costs, it affected us maybe 1%, 2%. And so at the end of the day, this is a risky business. I mean, our owners, they talk about that all the time. Their houses are on the line if this thing goes under. And you have to take that mentality when you're thinking about selling projects. But at the end of the day, our clients are looking for somebody to stand by their word, regardless of the risk factors that are out there. And so we have to price that in. We do expose, hey, this is what I'd be carrying in escalation. Right. And sometimes I'm going to get hit a little bit. And sometimes that money comes back because we didn't have as much. And so, you know, at the end of the day, it's a nut sum zero game. We are always looking at it, trying to figure out how do we de-risk ourselves? How do we procure material like the raw material as early as possible? Doesn't mean we need to cut it, weld it together, fabricate it to the panels. But if we can secure the materials, you're going to get that price you bid it at, right. As soon as you can. And so one thing that switching to a productized product delivery has allowed us to do is that you're locking in your, when we're talking facades, we're locking in our reinforcement, our frame materials, our connection types. When we're talking structures, we know what type of strand reinforcement and things of that nature. And so you're not waiting for your deferred submittal to get approved before you're procuring materials. That is a huge value that we don't talk about enough in kind of what I call the prioritization movement throughout the construction industry. And I think once you go through a couple of jobs, you're like, holy cow, that is such an advantage. We got to fit within this box. And I think the other thing that is challenging, sorry to get on my soapbox here, but it's challenging on these larger scale product prefabs. Curtain wall, lots of providers, lot of standards out there. You can really procure from anywhere, any place, and you can still make a budget. Your logistic costs are nearly as high, things of that nature. Well, when you get into like these custom, I'll call it the custom prefab more or less, the details are different from every single fabricator out there. Right. And so some of the challenges has been, well, you know, this is not how it's done in Tennessee and this isn't how it's done in Texas. And I'm Kaiser and I got hospitals in every state. I want the same product. I want the same details. Right. So yeah, you can de-risk me in the West coast, but what's going on on the East coast? And so I think what you're seeing is you know, whether it's at the industry level, like for the precast, for example, the precast concrete Institute, or just larger firms saying, Hey, let's, let's come up with some type of a consortium so we can give our clients the same or very similar products coast to coast. I've enjoyed this conversation. Every time we get together, have a lot of fun conversing about why precast is the best product in the industry. But no, I'm just kidding. As a closing, I would like to just kind of ask, why are you so passionate about prefabrication? Obviously your background is in glazing, but then you've morphed into this voice for the prefab industry as a whole, and then really built a following with coordinating adjacent scopes like precast and glass together. And I can't think that's possible without just extreme passion for what you do. So what drives you each day?
Adrian Lowenstein: I think it's, it's seen the reactions of the project teams after project completion, because when you have buy-in early on that they're going the prefabricated route, all of a sudden, and you're successful owner hits his budget architect can meet their design intent contractor can leave profitable. And I think the worst thing in the world is going around looking at project you lost or maybe a project you didn't pursue and hearing the architect say, that's not what I designed or, know, we wanted more articulation there. a different material there and it got VE'd out. So I think when you get everybody sort of singing the same song and you know a little kumbaya going on and in sync in that design build target value design effort and then I mean even look at the dorm projects we've done I feel like and this multifamily project we've done. project team is thrilled. And I think the biggest, and I don't think that's me or you or anybody. I think it was everybody being in sync and on the same page. And so I think the takeaway is finding a way to better communicate that to the owner because there are very few unitized prefab jobs where for the most part, the project team goes back and says, you know what? I regret doing that approach.
Doug Bevier: Yeah, I love that answer. If anybody wants to see what Skyline and the work Adrian's helped us do, go check out the Broderick in San Diego. Anyways, Adrian, I look forward to connecting again very soon.
Adrian Lowenstein: Thanks, guys.
Dan Delisle: Yeah, thanks Adrian.
