BIM Bam Boom: What Institutional Investors Need to Know About New Development Technologies
by Loretta Clodfelter
Building information modeling (BIM) is the most important technological breakthrough you have never heard of. BIM has huge applications to the real estate investment management and construction industries, as well as infrastructure and real assets. The adoption of BIM standards and practices in workflows could enable institutional investors and investment managers to lower costs, reduce risk and increase returns. Terry Bennett is senior industry strategist, civil infrastructure, with Autodesk Inc., and Chris Keyack is industry principal – commercial, healthcare, government and education with e-Builder Inc. They recently shared some insights about these new development technologies with Institutional Real Estate Americas.
Most real estate investors are unfamiliar with building information modeling, but it has significant potential for development projects. What is the BIM elevator pitch for real estate and infrastructure investors who are still learning about the technology?
Bennett: Most real estate and infrastructure investors are familiar with engineering plans, drawings and blueprints, while few can read them. When computer-aided design (CAD) emerged, software programs allowed us to create 2-D electronic documentation. While more efficient, it was still, for the most part, not intelligent — comprised of lines, arcs, circles and text — and still had the same barrier of understanding by all the stakeholders. These 2-D CAD drawings are, for the most part, being replaced by building information modeling. BIM is a collaborative process, driven by the creation and exchange of relevant digital information through the entire lifecycle of a built asset, whether it be buildings or infrastructure, like bridges, dams or highways, etc. Central to the process is the connection of intelligent, structured data to a 3-D digital model. In a connected BIM process, these intelligent, 3-D project models serve as the main means of communication between project activities and coordination/collaboration between project teams. It also provides the foundation for advanced analytics, simulation and visualization to optimize those designs to achieve desired outcomes.
Keyack: If you want to drastically reduce the chance of schedule delays caused by coordination issues, and be the driver on getting the facility you’re expecting, then BIM is a must-have, and best practice for all capital construction projects today. BIM delivers value to owners in three major areas: improving stakeholder engagement, reducing construction cost and errors, and reducing risk in facility operations.
Why should investors in real estate and infrastructure care about BIM? How does this technology improve profitability from an investment standpoint?
Bennett: First and foremost, BIM provides a much better level of understanding and transparency to the overall process. Many infrastructure projects are big, complex, and involve many approvals and reviews. BIM used for discussion with owners/investors allows for all to be active participants in the process, to focus on the desired outcomes rather than spending a lot of time trying to first understand what they are looking at.
Keyack: BIM delivers a virtual representation of the facility/infrastructure an owner expects to develop. By playing an active role in reviewing and contributing feedback in an easy-to-understand 3-D context, they are minimizing risk and costs of having to backtrack or redo a substantial step in the planning process, drastically impacting costs and schedules. In addition, once construction is complete, they can use BIM to manage and operate over the lifespan of their facility.
Bennett: As for improving profitability, BIM allows teams to explore “what-if” scenarios, rapidly test new and different alternatives, focus on outcomes required, and quickly optimize designs for constructability to achieve those goals, while reducing cycle time. Models can be used to assess the sustainability — incorporating social, political, environmental, cultural and economic information — or resiliency of a project’s approach. Powerful in-context visualizations make the project look movie-like but are engineering-accurate, being generated from the model. BIM provides the transparency, predictability and ability to proactively resolve design conflicts on the computer long before they impact the construction site. Its use has shown to drive down RFIs and change orders, resulting in lower costs and more predictable delivery.
How might investors push for BIM standards to be adopted more broadly?
Keyack: If an owner wants to leverage the “information” part of BIM, they will want disparate design teams and contractors to follow a consistent naming convention and define what information should be included in the model. Owners will have to specify that the project team utilizes software and file formats that are able to be consolidated together and be as software-vendor agnostic as possible. Owners can push for standards by participating in reputable academic and industry organizations focused on an “open BIM” approach, such as BuildingSMART, formerly the International Alliance for Interoperability. They work closely with designers, contractors and software vendors to push standards for the industry. When transitioning into BIM, and putting requirements in contracts to use BIM, have a good execution plan approved by the project team, make sure you have regular progress milestone check-ins and have a back-up plan of traditional deliverables.
Should investors include BIM as one of their requirements when investing?
Bennett: Yes. BIM provides for the means to have designers and contractors work together early in the project process. The ability to utilize intelligent 3-D models to validate ideas, to rapidly generate different alternatives, all benefit the owner’s final product, the built asset. The better schedule and cost predictability is key to ensuring fewer challenges or surprises during the process. By requiring it as the standardized approach and a condition of investment, it would continue to accelerate its widespread use. Most all AEC — architecture, engineering and construction — firms have BIM and use it, but ultimately will follow what is in the contract, and that could dictate older methods. The U.K. government now has a BIM mandate in place for all government building and infrastructure projects. In the two short years it has been in effect, the U.K. government has saved $2.9 billion in expenses and saw a dramatic rise in on-time and on-cost — and below-cost — delivery. Many other countries are following suit. If the process is good enough for wise use of a government’s dollars, why wouldn’t investors want the same for their clients’ money?
What else should real estate and infrastructure investors know about BIM? What is the key takeaway for real estate executives and institutional investors?
Bennett: BIM information is the foundation of a collaborative process, where information can be shared between the design team and used for discussion with owners/investors, adding a whole new level of understanding and transparency to the process. The 3-D model can even be leveraged into augmented and virtual reality — AR/VR — systems relatively easily, with little extra work to create more immersive experiences.
To date, those who have used BIM in the planning and design stages of major infrastructure projects have seen the following process improvements: lower cost of design resources; lower occurrence of RFIs and higher speed of answers when they do occur; minimal change orders, and on-site rework, which equals decreased future project costs; more optimized use of materials and equipment on-site, meaning less material waste, and lower fuel costs, carbon emissions, noise pollution, and improved air quality; a safer work environment, with better optimization of construction sequencing, equipment movement and fewer accidents; a decrease in contingency fee requirements; and overall increased stakeholder engagement and confidence, including from the public.
Ultimately, BIM information then can be handed to the contractors, to drive the construction process. The as-built model after construction can be provided to the owner as the basis for future O&M — operations and maintenance — activities.
Keyack: Not all BIM tools and BIM teams are created equal. Sometimes contractors and designers will say they use BIM, even though they’ve simply purchased a few seats of the software and have opened a model once or twice. When organizing the design and construction team, have them present their BIM execution plans and ask questions about their past successes and failures. Ask how it benefits them versus if they are just doing it for you. Meet the people that administer BIM software and processes. Ask how they interface with other trades. Make sure a contractor finds subcontractors from different key trades that have the tools and experience in developing and sharing 3-D models at a similar level. You don’t want to find out the structural team uses BIM, and MEP doesn’t.
Article Courtesy of Institutional Real Estate, Inc. © Copyright 2017. All Rights Reserved.