What issues are ahead in land development and how will that affect the future of the construction industry? This week’s episode features an in-depth interview with a land developer who helps us understand the market from the inside out.
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On this episode, Zach and Beth talk with Eric Tune, a general-contractor-turned-developer, who is now Vice President of Land Development at Brookfield in Phoenix. He’s helping to build more sustainable cities, and we talked with him about how construction and building materials impact the way cities grow today.
The Landscape of Today’s Land Development Industry
Brookfield Residential is a division of the global firm, Brookfield Asset Management. Eric Tune oversees the land development of the communities that Brookfield builds. “I like to say that I get to build cities — cities within cities,” he says.
Brookfield has a great reputation in the Phoenix area, where they just finished construction of the Eastmark community that started development in 2013. “It's a 3,200-acre master plan,” he explains. “What we typically like to search for are projects that are 500 acres or more, so that we can then sell to builder partners finished lots.”
Eric got his start in civil engineering and worked in that field for about five years, but transitioned into land development with a desire to build more. “In 2006 to 2012, the market was pretty horrible,” he explains, “so I got to get a lot of experience in different aspects of our business and actually became a general contractor.”
The market has fluctuated over the years, and this past year was no different. “I think we all thought that COVID was going to create this monster downturn in our market, and it actually did the opposite,” explains Eric, “We sped up all of our development. Supply has been a huge issue for us.”
In October 2020, Brookfield Properties started their second large master-planned community in Phoenix. “It was a very interesting opening,” he says, “because we had to do it sort of virtually, but not virtually. Everyone stayed in their cars, it was spanned over several weekends, so kind of a unique way to approach opening a large scale master-planned community.”
Supply and Labor Solutions in Today’s Development Industry
Eric gave us some insight into the shortage of land in regions like Arizona and other parts of the U.S. Large tracts of vacant land are held by organizations like the Arizona State Land Trust. “And, in order for that to be able to be purchased, it has to be petitioned to come to auction and it's a fairly long, drawn-out process to try to get it to come to auction,” Eric explains.
“It's difficult to find vacant land,” he says, and “supply has been constrained by lots of large development happening all around North America.” Large corporations and technology firms are moving to areas like Phoenix, which means the supply for materials and labor will (again) go down.
The construction labor shortage isn’t anything new, though. “One of the big focuses has been on trying to entice the younger generation to want to come into our industry,” says Eric.
For land developers, that’s been an ever-growing concern. “There is some very hard manual labor that's involved in digging trenches and laying pipe, and putting concrete on the ground and so on,” says Eric. “Many of our aging population within our industry are aging out of the business, and we don't have enough to backfill it.”
But Eric is hopeful, and Brookfield works within their local communities to bring about solutions: “So we're trying to work with local organizations, such as the community colleges, any of the different trade organizations like the AGC and so on, to come up with a way to create programs that will be engaging with the younger generation in order to make them want to come into what we do,” says Eric.
And because the pandemic took a serious toll on workers, he thinks there’s a chance they can fill the demand for labor on the jobs coming up. “I'm hopeful that people will look at that and they'll say, ‘You know what? If I go into that industry, it's a little bit more stable for me and I'll be able to not have to worry as much,’” he says.
Developing Sustainable Futures in Construction
Stability and sustainability are a big focus for Eric and the team at Brookfield. “It's always been top of mind to create sustainable communities, but it's becoming even more focused now,” says Eric. “There's a hypersensitivity to it, within all the different demographics that we target.”
But using the term sustainability and practicing it are two different things, and Brookfield doesn’t just talk about a greener future.
“I can use Eastmark as one of our examples,” Eric says. “It was the former GM proving grounds — so a facility, 3200 acres, that was utilized for testing the capabilities of GM's prototype vehicles in the desert.” When Brookfield acquired that land, there were still 60 buildings on the site.
“When we purchased the site, one of our objectives was to try to recycle as much as we could of that facility,” says Eric. In the redevelopment process, Brookfield was able to recycle a lot of the materials on the site — from the asphalt on the GM campus track area to the building concrete.
Brookfield was able to save money on materials because they could repurpose the old materials, and they “didn't have to go to a local pit that was mining material to create this base coarse, we used what we had locally on the site. Saved us some money; it also created a sustainable environment,” explains Eric.
In Brookfield’s communities, there are programs created to promote sustainability and being more eco-conscious. “We promote builders who are using materials that are most sustainable, low flow fixtures, better SEER rating on the AC units, low-E windows, things like that.”
And residents of Brookfield communities also play a part in sustainable programs. “With our community life programs, our residents who come and live in our communities, typically get engaged in cleanup opportunities,” he says. In Brookfield’s newest community, Alamar, residents helped out with cleanup in the local Rio Salado area.
“It's about creating that environment for everyone to feel like they are doing their part,” explains Eric.
How To Plan for the Future of Building Materials
For land developers like Eric, working with materials that are durable and environmentally conscious is key. PVC pipe is one of those materials, and he hopes there’s a solution for a better product “that is long-lasting and doesn't require as much petroleum to develop,” says Eric. “We constantly have the issue, every year there's always a shortage in supply. That shortage in supply then creates a cost increase, and it never comes back down, it's always going up.”
Manufacturing products that are reusable will also help to build a better future for the construction industry. “Getting our agencies on board with the use, or reuse of these materials would be key to helping stop the mining operations that are required to create new material,” he says.
Public awareness will also play a huge role in supporting the building materials and construction industries. “I think that educating the public is a big factor, and letting everyone know you can make really good money doing these trades, you can make a career out of it,” he says. “I don't think we do a good enough job of promoting how successful you can be, because everyone has spent so much time focusing on how you need a four-year degree to be able to be successful.”
Want Even More Insight?
The construction industry has weathered varied and numerous challenges in the last few years, and it will take the right conversations and connections to ensure the success of that industry.
Eric explains further: “I think it's important for us as developers and builders in the industry to push our contractor base to have conversations with local community colleges, high schools, trade schools and so on, to say, ‘Look, these are the things that we really need, and if you can help us come up with a program that will get our workforce in a position where they can start the job day one and not have to have a whole bunch of extra training, that would be phenomenal.’”
He’s passionate about the sustainable future of construction and is hopeful that tomorrow’s generation of builders, manufacturers and developers will grow the industry further. “I think that helps to draw in that younger generation, to want to be part of something that's a little bit bigger than them,” says Eric. “To be able to be part of that, that's our focus. Look, you can be part of something that's much bigger than just your local community.”
Listen to more of this insightful interview for even more perspective on the construction industry and its impact on land development.
You can reach out to Eric at [email protected].
Or get in touch with us with your questions or comments about the future of construction, at [email protected].
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