For thousands of years, humans have been building. From the Great Pyramid of Giza to the Empire State Building to Raiders Stadium, construction has been central to the evolution of human society. Through the centuries, humans have built structures for work, for play—for life. Every construction project, right down through the ages, has had an owner—whether a Pharaoh, a government, or a corporation.
As the world’s population steadily grows and our cities are asked to accommodate the long-predicted mass migrations from rural countryside to modern metropolis, the owner’s role in the construction realm will be even more crucial to our collective future.
Ownership is the animating spirit driving the conscious evolution of our cities—a big deal with complicated underpinnings. As we ramp to the needs of tomorrow, the owner holds the keys. Now may be a good time to answer the question: what is an owner?
Construction and Ownership
In 2012, I founded Honest Buildings—which today is an integral part of Procore’s solution. Honest Buildings became one of the industry leaders in developing purpose-built software for the real estate owner. We worked with many of the largest real-estate owners in the world. Why? Because as the world gets more crowded, the owner is increasingly shouldering the burden of a responsibly planned built environment that embraces and serves everyone.
In the construction sector, stuff gets built (yes…there is a little more to it than that). The outcome of the construction project is dependent on uniting disparate teams, individuals, cultures, and even incentives into a single driving synergy that turns a complex, many-layered plan into a steel and glass spire with hundreds of offices and living spaces. In the realm of construction and building, everyone more or less understands the hierarchy of skill sets and leadership on a construction project—from specialty contractor to construction engineer.
Where does the building’s owner fit into the construction ecosystem? This can be answered as plainly or as philosophically as you like. Here’s the plain breakout.
Understanding—and serving—Owner Types
The owner community is not monolithic. To understand and address the array of owner concerns, we have to understand those concerns in context. Very broadly speaking, owners are of five types
Owners, Developers and Investment Managers are commercial real estate firms whose properties primarily exist as investment vehicles for someone else’s occupancy, whether functioning as residential, office, retail, hospitality, industrial, or mixed-use space. There are many players in this category—from real estate giants with nation-and-world-spanning portfolios, to localized owners whose businesses speak to regional concerns and progress.
Corporations are another variety of owner in the construction space—entities who build for their own corporate use. Sysco, J. Crew, Eddie Bauer; these corporate giants need brick and mortar structures for their businesses. They have the personnel and infrastructure to design and create their own spaces, and maintain ownership of those properties. Whereas the owner-Developer’s project may be built for occupancy by a corporation, here we’re talking about corporations that build for their own use.
Manufacturing and Energy are also examples of private sector enterprises building and utilizing their own construction projects. These heavily mechanized, highly capitalized builds are designed for product manufacture, such as the refining, storage and distribution of petroleum products for energy and fuel, auto manufacturing, and producing of industrial components. These projects are highly regulated by State and Federal entities, that scrutinize project impact on air and water quality, worker health and safety, public safety, as well as project effects on acknowledged cultural resources.
Healthcare and Education owners focus specifically on…well, you know. Ft. Wayne Community Schools and Boston Children’s Hospital are two examples of this owner type. The unique capital funding, planning, and technology requirements of healthcare and education builds make their owners necessary experts in these construction categories. Robins & Morton is an example of a GC whose portfolio, ever since a deliberate pivot to healthcare construction in 1975, is largely to do with hospital and other healthcare-related construction.
Government-owned projects are public sector construction builds for government institutions and occupied by government workers on government business. These projects and their completed builds are owned and operated by state and federal government entities. This means these builds are effectively funded by—and accountable to—the taxpaying public.
Owning the Future
I’ve been immersed in the owner space for years, and have watched the growing adoption of construction management technologies by that cohort.
Our intuitions don’t automatically marry “software” and “construction,” but that is rapidly changing. It has to.
Since 1950, the world’s urban population has risen almost six-fold, from 751 million to 4.2 billion in 2018. Today, 54% of the world’s population lives in urban areas, a figure which is expected to rise to 66% by 2050. An additional 2.5 billion people will move into urban areas in that time period. As a matter of global necessity and planning, cities are officially in the ascendant.
The owner’s role in guiding our collective urban future is undeniable. Our owners—who are literally building that future—deserve software that is exactingly designed to suit their dynamic, ever-changing needs. A projected spend of $10 trillion a year in construction by 2020 says one thing loud and clear; these innovators can’t be expected to shape our common future using software drawn from the past.
Owners are ramping. And reviewing their tools.