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What is the owner/operator’s role during a senior living construction project?

Many senior living owner/operators are unaware of just how many responsibilities they’ll have in a construction project — and how hard it is to handle those responsibilities on top of their usual duties. Here’s what you need to plan for.
Real estate consultant discussing senior living master plan with boad of directors

When we talk about the senior living development process for new construction, renovations, or additions, there are generally five phases:

  1. High-level strategic planning
  2. Predevelopment
  3. Design and bidding
  4. Construction and procurement
  5. Project closeout

At each phase of this process, the organization’s leaders and staff have a responsibility to be involved — but it often comes as a surprise exactly how involved they end up being. The sometimes-unwelcome truth is that taking on a large construction project will put many new responsibilities on their shoulders.

If the additional responsibilities weren’t enough, the technical information they’ll need to master is quite complex. Even the best facilities departments can get out of their depth when trying to choose the correct delivery method, develop construction cost mitigation strategies, and deliberate on change orders — among many other tasks we’ll cover in this article.

One option to help alleviate the burden is to engage an owner’s representative. Owner’s representatives, or owner’s reps, may also be known by other names such as project managers, program managers, development consultants, or development advisors. But don’t confuse them with construction managers or architects — they have very different roles. Put simply, owner’s representatives act as a fiduciaries for their client, with the role of bringing to your team the technical expertise needed to avoid pitfalls, overcome challenges, and make informed decisions throughout planning, design, and construction.

Owner’s reps offer a variety of benefits, and the best ones provide a positive ROI for the cost of their services.

Without an owner’s representative to facilitate construction-related tasks as a part of your internal project team, both the strategic and ongoing responsibilities of planning and managing a project will fall to you and your staff. Those tasks can be loosely grouped by the phase of the senior living construction project.

Actions items for the strategic planning and predevelopment phases

The first phase of senior living construction involves strategic business planning, market research, master planning and facility condition assessments, and financial planning — all at the highest level. The second phase covers a lot of the same at a deeper level, but also adds in project planning, site due diligence, team assembly, and beginning conceptual design and estimating.

Flow chart graphic describing phases one and two of the senior living construction process, which includes organizational strategic planning, market feasibility, space planning, financial planning, project planning and site due diligence, delivery method and team assembly, and conceptual design and estimate with stops along the way to determine whether to move forward with the project

Without an owner’s representative, your internal team will need to lead the following activities during the planning and predevelopment phases:

  • Lead organizational strategic planning
  • Coordinate and lead master planning, which includes space planning and facility condition assessments
  • Assess market data and industry trends
  • Develop the program, budget, and schedule
  • Determine the optimal delivery method
  • Decide on the phasing based on financials and impact on existing operations
  • Coordinate resident upgrades and options process
  • Determine project financing and provide necessary due diligence for financing
  • Prepare project financial analysis and organizational pro forma
  • Draft and issue request for proposals (RFPs) for vendors
  • Negotiate contracts with all vendors
  • Assist in the zoning and site approval process
  • Coordinate with marketing and sales
  • Identify and manage risk
  • Coordinate meeting agendas and minutes for all project meetings
  • Ensure timely flow of information
  • Manage communication with board and stakeholders

Action items during the design and bidding phase

The third phase finally starts defining the project with scope refinement through design and value engineering. Entitlements, municipal approvals, and finance coordination are being organized. There may also be additional RFP processes to oversee for bidding for vendors.

Flow chart graphic describing phase three of the senior living construction process, which includes entitlements, design oversight and value engineering, financing coordination, bidding, and municipal approvals

Here is a list of the responsibilities facing your internal team during the design and bidding phase:

  • Monitor project program, budget, and schedule
  • Coordinate financing with lenders
  • Create and implement a municipal approval plan (local and state)
  • Draft and issue RFPs
  • Negotiate contracts with all vendors
  • Oversee design
  • Ensure marketability standards are maintained for resident apartments and commons
  • Direct value engineering
  • Manage risk
  • Coordinate meeting agendas and minutes for all project meetings
  • Ensure timely flow of information
  • Manage and track communication between vendors
  • Manage communication with board and stakeholders

Action items during the construction and procurement phase

The fourth phase of construction starts with groundbreaking and mostly includes day-to-day oversight of the construction process, change order management, payment application processing, and procurement of furniture, fixtures, and equipment (FF&E) and technology. We also recommend a T-minus open operational plan be developed to capture and assign all the operational tasks needed for opening.

Flow chart graphic describing phase four of the senior living construction process, which includes construction oversight, change order management, FF&E coordination and installation, technology coordination and installation, and T-minus open operational coordination

During construction, your team can expect to focus on these tasks:

  • Monitor project program, budget, and schedule
  • Coordinate meeting agendas and minutes for all project meetings
  • Oversee RFP process for owner’s special inspections and negotiating agreements
  • Manage and track communication between vendors
  • Track, assess, vet, and approve change orders
  • Process invoices and payment applications
  • Review and approve all bank draw requests
  • Review all testing reports for compliance
  • Coordinate voice, data, and security design and installation
  • Procure and coordinate the installation of FF&E
  • Procure and coordinate the design and installation of technology
  • Develop T-minus open schedule
  • Manage risk
  • Coordinate meeting agendas and minutes for all project meetings
  • Ensure timely flow of information
  • Manage communication with board and stakeholders

Action items during the preopening and closeout phases

The preopening and project closeout phase is where the heat really kicks up as you speed toward opening. Your project has reached substantial completion. Your construction team will be working through its punch list. You’ll need to make sure commissioning, warranties and as-built documents, and all inspections and approvals are taken care of at the same time you’re completing your own list of operational T-minus action items.

Flow chart graphic describing phase five of the senior living construction process, which includes punch list, commissioning, warranties and as-built documentation, and inspections and approvals before the building opens

It’s crunch time, so here’s what you can expect to face preopening:

  • Manage and track communication between vendors
  • Track, assess, vet, and approve any final change orders
  • Finalize voice, data, and security
  • Finalize FF&E
  • Continue to process invoices and payment applications
  • Continue to review and approve all bank draw requests
  • Oversee punch list activities
  • Review all testing reports for compliance
  • Oversee commissioning activities
  • Confirm and follow up with project team for warranties and as-built documentation
  • Oversee inspections and approvals
  • Manage T-minus and preopening activities
  • Manage communication with board & stakeholders

Managing your internal resources

A large construction project is a complex juggling act involving multiple teams of people, complex processes, nuanced skills and knowledge, and high stakes — but with the potential for great rewards for your organization.

This list gave you an overview of the breadth and depth of work needed to manage a capital project. However, these steps are by no means the only ones you undertake during a project, nor do they always fall in this order. The development process is not linear; the five phases mentioned overlap and require continuous planning, consensus building, reevaluating, and recalibrating prior to and during each phase. Before committing to a large construction project, executives and boards should understand the extent of extra work and expertise needed to successfully plan and manage a construction project.

If these responsibilities seem like a lot for your internal team to handle, don’t worry. It’s common to need additional resources to allow your staff the bandwidth to keep operations running seamlessly during construction. That’s why owner’s representatives exist — to give your organization extra resources and technical expertise so you can effectively plan for and manage the intricate details and day-to-day construction activities of large capital projects. You won’t regret the help: Owner’s reps offer a variety of benefits, and the best ones provide a positive ROI for the cost of their services.

Learn more: Download our guide to large construction projects

If you’d like to learn more about the development process and what to expert as you plan for major construction projects on your campus, download our white paper, “The senior living operator’s guide to large construction projects.”

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