A top-tier residential market that’s only getting hotter, low interest rates and rising construction pricing are all increasing pressure on developers to deliver new housing projects now. Time is never our friend in the development world, but this latest push to decrease time to market is a perfect storm of pressure.

With escalation costs at roughly 10 percent per year right now, gaining a few months in a three- to four-year development process can save millions of dollars. On a $100 million project, saving six months would save $5 million in escalation alone. On the income side, moving quickly reduces the risk of missing a market, delivering in a slow season or falling victim to an uptick in interest rates.

Where To Save Time

Developers have always utilized different strategies to execute faster, but there are only so many ways to squeeze the schedule. When we were working on Continuum in Barry’s Corner, our latest mixed-use development in Allston, we tried a newer tool. We bought our guaranteed max price (GMP) contract with our general contractor based on design development drawings – an earlier, and not quite complete, set of documents.

Traditionally, the design process consists of four main phases – concept, schematics, design development (DD) and construction documents (CD) – condensed at your own risk. Developers work from the CD set, the most complete and fully coordinated set of drawings, to buy their GMP contract from a general contractor.

It typically takes four or five months to move from the DD to CD phase alone – somewhere between 5 and 10 percent of the total development timeline. Jumping straight into the GMP was a risky move, but it reduced our timeline by four months, saving us well in excess of $3 million in escalation costs (not to mention other savings, like carry costs).

Managing The Risks

As you can imagine, a lot of information was missing from the DD drawings. This made it essential to develop a robust qualifications document along with our contract.

This qualifications document, prepared by the design team and construction team, details elements that will be added in the CD phase but aren’t yet been committed to paper – some examples in our case included quantity and quality of some materials and finishes. It’s important that the qualifications document also include guiding principles to ensure that the contract and GMP are generated based on the spirit of the design, not the letter of the plan. Anyone who’s ever worked on a development knows that this is a dramatic departure from what usually works.

A lot of people, ourselves included, might ask if it really made sense to move forward with the project under that scenario. We spent a lot of time thinking about whether we wanted to go forward with project this way. It was highly risky. We asked ourselves repeatedly, “What’s not in that qualifications doc? What’s not on paper that we might be missing?”

We found the answers by talking regularly with the contractors. In our case, we turned to the construction team, who have built tens of thousands of luxury products and knew the types of things we were considering. The contractor also knew some of the bigger sub-contractors we’d be working with (glass, site, concrete, masonry), so everyone worked on those details together. This allowed the design assist process to move forward in a way that stayed true to design intents of architect, but also incorporated input from the broader construction team about how it would all be built to stay within the budget.

A Matter Of Trust

This approach could never work without a true partnership between the design team, the ownership team and the contractor. In our case, we relied on a long history together. We had to trust that the team would design and build something that held to our budget and fulfilled our original concept.

There was some healthy conversation along the way. Not everyone was always in agreement, especially when it came to the detailing – and the devil is always in the detailing. Sometimes complexity is well worth it to make a project more beautiful, but sometimes it’s not necessary. We had to trust our partners on all sides that we could strike a balance and stay true to the design intent in a way that would meet our budget.

A New Way Forward

Four months after we started construction, the construction documents package was issued, with the fully coordinated drawings and our final plans.

This process wouldn’t work for every developer or every project, but looking at the market in Boston today, I predict that we’ll be seeing many more projects take this approach. All told, the risk was manageable, and we’re considering it for future projects. When every day and every dollar matters, saving a few months and a few million dollars makes straying from the beaten path well worth it.

Leslie Cohen is a principal at Samuels & Associates, president-elect of New England Women in Real Estate (NEWiRE) and an active member of the Urban Land Institute (ULI). Samuels & Associates is guided by the belief that people should live, work, shop and play in dynamic communities that inspire and enrich all aspects of their lives.