“How can BIM, Building Information Modeling, effectively communicate the design of a new multi-sport facility in order to engage investors in financial participation?” A student sent me an email with this question, a question that was part of their assignment. I thought that is an easy question, the answer for the student is renderings, diagrams and animations as a result of using BIM. But, the more I thought the more I realized there was a bigger answer. BIM touches the entire investor presentation; the developer should take full advantage of the “BIM Story” throughout their presentation to investors.
“How can BIM, Building Information Modeling, effectively communicate the design of a new multi-sport facility in order to engage investors in financial participation?”
A student sent me an email with this question, a question that was part of their assignment. I thought that is an easy question, the answer for the student is renderings, diagrams and animations as a result of using BIM. But, the more I thought the more I realized there was a bigger answer. BIM touches the entire investor presentation; the developer should take full advantage of the “BIM Story” throughout their presentation to investors.
My background includes practicing architecture for 25 years, principal in a construction company for 12 years, principal in a development company for 12 years, and AEC/FM software development for the last 25 years. As I put on the different hats from each of these perspectives, the longer the answer became. Just in case you are wondering, many of these years are overlapping, so, no, I am not over 100 years old.
Why do investors invest? And the answer is: To make money on their investment.
You need to convince them that this is a good investment over all the other investment options they have. The way to do this is to make them feel comfortable with the:
- 1. Development and management teams
- 2. The financial projections
- 3. The project design team
- 4. The construction team
- 5. Ongoing operations
- 6. The exit strategy or incremental return on investment
The areas that BIM will influence are all of the above. BIM is more important than just communicating the design.
#1. Today developers are just starting to understand how important BIM is for the entirety of their project, for the reasons discussed below. In ten years BIM will be as expected as the financial projections. Investors will demand BIM. The sooner a developer weaves BIM into their process and their story the better.
# 2 Financial Projections — The use of BIM and IPD (Integrated Project Delivery) is resulting in project costs coming in at ten to twenty percent below traditional construction costs of non BIM/IPD projects. This means that if two similar investments are available the BIM project will result in a better return on the investment. Developers are hearing of these results and developers will demand BIM projects. Developers that use BIM can give a story today that can separate themselves from other developers. In ten years the integration of modeling, costing, and financing will allow real time “what ifs” resulting in better projects for the developers to create and sell.
#3 The Project Design Team — This is the logical category for the use of BIM. The use of BIM to design the project will result in better designs, visualization and contract documents.
- Design — BIM allows the designer to better see the results of their ideas and to then refine their designs. There is no doubt that BIM will help create better aesthetics, more efficient layouts and better buildings.
- Visualization — Many people cannot visualize a building from plans and elevations. The byproduct of the use of BIM is the ease with which renderings and animations may be created. Investors need to understand what they are investing in, the renderings and animations are critical to the investors understanding the building. Projects that clearly show the end results are much more likely to attract investors.
- Contract Documents — Even now when most architects and engineers are still modeling in BIM for the creation of paper drawings the drawings are more accurate and have less chance of errors and omissions. Consultants work is more accurately integrated. When BIM contract documents move to the next stage of BIM (modeled with construction level detail included and correctly created objects) the value further increases with the immediate result of lower construction costs, links to analysis and downstream use for operations and facilities management.
#4 The Construction Team — I have heard that Autodesk is licensing more Revit programs to contractors than architects. This is very logical to me for the 3D model is valuable for planning construction sequences, cost estimations and bidding, conflict resolution and visualization. I have seen contractor presentations where the contractor models the project in great detail in several versions. The final costs for the same square footage vary more than 30%. If the developer is using contractors that use BIM, and even better IPD they can promote to the investors that they are maximizing the investment and eliminating the traditional waste of money found in design and construction.
#5 Ongoing Operations — Every dollar spent operating and maintaining the completed project is money taken out of profit. Better designed and constructed projects require less money for repairs and maintenance and less money spent on energy. BIM can be used to populate analysis programs that help the designers refine the design of the building for minimal energy use. The near future will find more and more information associated with the objects (products) that are selected for use in the projects. More and better information will result in more informed selections and the use of products and materials that will last longer and perform better.
#6 Exit Strategy or Incremental Return on Investment — Poorly designed, constructed and operated projects are a disaster and they will end up as a very bad investment. I have investigated scores of projects that devoured money with poor designs, bad HVAC systems, leaks, and failed plumbing. Investors look for professional teams that they believe in. A team that is knowledgeable of BIM, and uses BIM has a much higher likelihood of success. This success will result in a project that is more valuable throughout its life and therefore more valuable when it is sold.
BIM will change everything for everyone involved in building projects. The sooner developers understand all the consequences of BIM the sooner they will take advantage of the positive changes BIM brings.