Navigating Construction Challenges and Centralizing Services: How PEG is Enhancing Customer Experience in the Real Estate Industry
In recent years, the construction industry has faced numerous challenges, and for the executives at PEG, navigating these obstacles has been particularly difficult. As a real estate firm that develops and operates apartments, as well as builds, owns, and manages hotels and build-to-rent properties, PEG has had to adapt to the ever-changing landscape of the industry.
One of the main challenges that PEG has faced is the increase in costs and interest rates. According to PEG Executive Chairman Cameron Gunter, "In developing those types of products, it's been tough to make deals pencil, even for the last couple of years, just because of the increase in costs and interest rates." The uncertainty surrounding tariffs has also caused additional issues for the company.
To mitigate the impact of tariffs, PEG has taken steps to plan ahead. For example, the company has purchased cabinets from China and stored them on property until they are needed. Additionally, PEG is working with its contractors to share the cost burden on tariffs. Gunter explains, "I can create contingencies where they have it as part of their [guaranteed maximum price] and we use that contingency to cover any tariffs based on the general contractor piece."
Labor costs have also been a challenge for PEG. The company was initially excited to see costs stabilize and potentially even decrease, but this has not been the case. However, with a number of projects currently under construction, there are more subcontractors bidding on projects and willing to take lower rates. Additionally, energy costs are coming down, which is a positive for construction.
Despite these challenges, PEG is still moving forward with development projects. The company has two multifamily projects in development, with one in Tucson, Arizona, slated to open later this year. However, the uncertainty surrounding tariffs has made it difficult for the company to determine whether to move forward with any additional development.
When it comes to customer service and centralization, Gunter explains that PEG is focused on providing a great experience for its residents and guests. The company is looking into how AI can help reduce costs and provide better service. Additionally, centralization is playing a key role in improving efficiency and providing real-time data to employees.
In conclusion, while the construction industry faces numerous challenges, PEG is taking steps to adapt and overcome these obstacles. By planning ahead and working with contractors to share the cost burden on tariffs, the company is able to continue moving forward with development projects. Additionally, by focusing on customer service and centralization, PEG is able to provide a great experience for its residents and guests.
