How Mixed-Use Developers Save Money on Container Parks
November 29, 2018
They use similar designs for different tenants.
A common mistake in the construction process is that design requirements aren’t considered independently, but rather as one piece of the entire build. When we talk about costs, we break them down into fixed costs and variable costs. Fixed costs are the costs you pay regardless of how many units you produce. Examples of fixed costs include rent and software licenses. Variable costs are the costs you pay per unit. Examples of variable costs are raw materials and labor costs.
Depending on how you approach construction, design costs can be fixed or variable costs. Container parks will typically need a few different designs to accommodate the kinds of tenants. A retail vendor and a food service vendor need very different facilities to run their businesses. However, retail tenants may not need completely different footprints. Foodservice providers may be able to work within a pre-existing footprint. Of course, they will want to customize their own space, but there are ways to approach customization that saves retail developer’s money on the front end.
At Boxman Studios, design is not just the conceptual renderings. We include the costs of structural engineering, MEP (mechanical, electrical, plumbing) designs, life-safety drawings, and architectural drawings. While all these documents are necessary to permit shipping containers for semi-permanent or permanent installation, the costs add up when each tenant needs their own custom footprint. Developers save money by grouping like tenants and re-using designs for multiple businesses. This way, the designs move from a variable cost (a developer would need to pay for design sets for each custom building) to a fixed cost (only pay the design fees per the type of structure they need). When designs can cost up to 30% of the total cost of a structure, these saving add up too.
To customize per tenant, we recommend playing with signage, colors, and finishes to differentiate each brand without sacrificing budget.
They get their plans and costs up-front
The biggest budget busters in construction typically come as change orders. Whether requested by the client or necessary to resolve the vendor’s unexpected issues, these surprise changes can have a big impact on a project’s price tag and timeline. For example, in this Wall Street Journal article, “Old Containers Find Out-of-the-Box Second Lives,” the author interviews a restaurateur who expected to build a shipping container restaurant for around a million dollars. By the end of the project, their costs nearly doubled, and the timeline was extended to four years. Real estate developers are held accountable for budget and timelines, even if the holdup isn’t their fault. Boxman Studios works with you to firm up your plan and provides your total costs up front before a torch ever hits metal.
They work with a single-source provider
There are lots of ways that working with a single vendor save time, headaches, and blood pressure levels. Single-source providers make communication and coordination easier, as you only have one point of contact. Using one vendor can also save time during your due diligence and procurement process, but what about the money?
Using a single source provider saves money because it reduces compatibility issues and can save big on logistics between providers.
When we talk about compatibility, we are referring to how well each service unit understands the processes that take place in order to bring the entire project together. Does the logistics company only deliver? Do they need to hire another company to set up the unit? Does the design company take into consideration shipping container modification best practices? Does the fabrication company understand the significant details of your design?
If your design company is different than your fabrication company and logistics company, misunderstandings are commonplace and costly. Boxman Studios has design, fabrication, and logistics all under one roof. We eat lunch together. We know what our counterparts need to get the job done. No matter how good a project manager is, they can’t fake the coordination that happens when a company is vertically integrated and unified by a singular vision.
There’s also an opportunity for saving costs when you consider how much it costs for the project to change hands. If one fabricator is responsible for the heavy metal work and one fabricator is responsible for the finish work, you’re left responsible for the cost of shipping your structure between the fabricators or paying them to travel to your work site. When everyone already works at the same building, this logistical nightmare is eliminated.
They utilize existing infrastructure to support experiential activations
Retail properties are receiving pressure from customers to integrate experiential elements into their programming. Some properties will bring in outside vendors to spice up the experience. Others will purchase mobile stages, seasonal decorations, or use a sponsor to integrate immersive technologies. Shipping container parks already have a leg-up because of the experiential nature of modified shipping containers. Shipping containers are a symbol of travel and possibilities. They go all over the world and then come back here to house your favorite ice cream shop. They’re visually interesting and still uncommon in the retail landscape. Again, we return to the theme of inspired imagination. Smart retail property managers will leverage this phenomenon to save on seasonal and special-event activations.
Although shipping container architecture is not necessarily a cheap option, there are ways that developers can save money in the design-build process. If you’re interested in learning more about how to design, develop, and deploy container parks and shipping container venues, please fill out our contact form below!