Build Better Podcast

Home Improvement Company Gets New DIRTT Home

April 26, 2019 Season 1 Episode 8
Build Better Podcast
Home Improvement Company Gets New DIRTT Home
Chapters
Build Better Podcast
Home Improvement Company Gets New DIRTT Home
Apr 26, 2019 Season 1 Episode 8
DIRTT
Using quick-connect fiber and digital construction DaBella built the perfect workplace in an imperfect existing building.
Show Notes Transcript

DaBella (https://dabella.us) is one of the fastest growing home improvement companies in the US. They feel the key to their success comes from their dedication to amazing service. And to attract and retain people dedicated to their clients' happiness, they knew they needed to give them a great workspace.
Finding that wasn't so easy.
They wanted a big single floor-plate filled with opportunities to meet people from different parts of the company and be ready to adapt when teams needed to change things up. They wanted to be in a location easy for their employees to get to and was in a community favorable for business. And they wanted to own their own building rather than lease. 
The only building that ticked all their boxes was a rundown, former call center. After talking to four different contracting firms, getting it up to the level they needed, on a schedule that would allow them to get out of their other leases, seemed impossible. Until they talked to the team at GRIT, the local DIRTT Partner in Portland. 

Speaker 1:
0:05
Hey there and welcome to build better. This is a podcast that's mostly of interest to DIRTTTbags and our Partners, but everyone is welcome to listen in. Today's story comes from Oregon. DaBella is a home renovation company that's growing like crazy. They're doing it by gathering great people to deliver great service to clients whom they care deeply about. And since culture is such a big part of DaBella's success, they were looking for a building that was in the right location and could support all their employees on one floor. That was a challenge for Brad Christensen, their real estate broker.:
Speaker 2:
0:41
I have served as a commercial real estate advisor for over 20 years and work at Colliers international and in today's market there are still a number of folks that are questioning adopting DIRTT as the solution for tenant improvements. And I think one of the challenges you have is that you've got an industry that's number of hundreds of years old. You have developers who can in their head and many times quantify what it's going to cost to build an office, a conference room, a bathroom. And so just just that basic knowledge base gets twisted when you start to look at something like this that's a pre manufactured product. If you go back 25 30 years and the manufacturing processes, the design, the technologies, were not there to create something that would be at par with a lot of what we see in traditional construction today. And so that memory of demountable walls still sits there. But I again think that it's a function of time and if we were to look at the quadrants of introduction of this, and especially over the last, we'll call it three, four years in this market specifically you, hate to use the cliche, sky's the limit, but I, I just can't say it differently and I think that the more we see the fortune 500 and fortune 1000 say we're going to move forward with a DIRTT solution, the greater adoption you're going to see by everybody.:
:
2:00
I'm Greg Swartz I'm the chief financial officer of DaBella. A home improvement company here in the northwest got 13 locations across five states. I am Brian Fravel and I am chief marketing officer at DaBella. We're dealing with homeowners one to one relationships and so we want the best people in front of the homeowner, showing them their options, helping them choose the right product and without the right people to do that, you just can't deliver. Awesome customer service experience.:
:
2:29
And how fast is this company growing? We're growing 20 to 30% a year. It's been pretty exciting. Every single year we're growing both in the existing states that we're in and we're also opening up in new states every single year:
:
2:43
and I cannot help but notice. But already today, three tours and there's more tours. What does it do when you know that there's people from all over the region? So excited about just looking at your space, coming to hear about DaBella?:
:
2:57
Yeah. Well, you know, it's a real sense of pride from a company standpoint that we're making a name for ourself here in the Greater Portland area in terms of innovative companies. It helps us with recruiting and potentially even new business.:
:
3:11
This building allowed everybody to be on a single floor and one of the real goals the leadership was that culturally there it'd be an opportunity for real interaction amongst the team regardless of your position. A lot of the neighborhoods that were developed within the space are intended to be destination for people to congregate and I think that uh, finding a single story building of this size out in this market was challenging alone. We looked at, you know, sites up and down the I five all the way out to highway 26. One of the advantages of, of being out in Hillsboro today is that it is a work friendly business friendly community. The jurisdiction was very supportive. And then finally the cost structure. We were able to get into this building because of its condition at a much lesser price point than we might someplace else. Definitely far below replacement cost.:
Speaker 4:
4:04
The project that we're sitting in right now as a brand new 57,000 square foot building to us, this was a existing building that didn't meet the needs that we needed. So we actually had to fully gut this building:
Speaker 2:
4:17
obsolete is probably the best definition. The group who had occupied the building before it was bank of America. It used as a call center. Everything down to the restrooms were antiquated and abused and effectively it was going to be a pretty substantial redevelopment of the existing building on the inside Shell.:
Speaker 5:
4:35
Hi, I'm Claire Goddard. I'm an interior designer at Ankrom Moisan and I was part of the design team here at DaBella and I'm Kaci Mespelt with Ankrom Moisan architects and I was the lead designer on this project. This building had this wavy soffit all the way down the corridor and just some very unique existing features. Unique color scheme too. I kind of like Barney threw up in here. Yeah, it was awful. It was dated, but I think that's the beauty too of doing tenant renovations is that the outside of the building can be one way, but then you walk in and it can be completely spectacular. I've been thinking about, we got to do a trip to Calgary to see DIRTT's factory and you know, it's just like a basic brick building and you're like, hmmm, I thought it'd be something a little fancier and then you get inside you're like, whoa. So I think that's the beauty of DIRTT.:
Speaker 2:
5:29
The timing of it was really, really critical because there were not a lot of other options that were of this size on the marketplace. Nothing that was on a single floor.:
Speaker 4:
5:38
DIRTT was able to come in and not only from my bean counter hat, very cost effective, be very maneuverable for our future growth. They also cut the schedule down by almost 60%:
Speaker 2:
5:50
time was definitely of the essence. They had not only outgrown their space. There was going to be a pivot that would be ideal right around the, holidays:
Speaker 3:
5:58
and the only opportunity to get the construction complete and get part of the team in the building was going to be using the DIRTT system that,:
:
6:06
you know, when we moved the call center, we were prepared for everything to go wrong. We did it over the holidays. We actually had time to spare. We were up and ready two days before we needed to be.:
Speaker 4:
6:20
We went out to three different companies that were stick built as well as the DIRTT solution. For our company every single day that we have our marketing team down, that's $500,000 a day in lost revenue opportunity. DIRTT was the only one that could meet our schedule that where we could be able to do all of our switch move over between Christmas and new years to be fully operational. Every other solution that we looked at that was non DIRTT, there was your traditional stick-built, that had trade compaction, that had to do trade stacking, had scheduled compaction because of that. We would not be sitting here in February. We wouldn't be sitting here until, April or May:
Speaker 5:
6:56
when all the carpet was laid and you kind of think who was a designer like pink, blue and yellow carpet next to each other. And because you normally don't, you never see that there's always wall separation. It was, it was funny to see that, but then it was nice to see it within like two days almost all the walls were in place and then you come back and it's just a whole different space. And then your, you know, your client's like, oh this, these carpet changes, this like wall changes. Make Sense. That was fun.:
Speaker 6:
7:25
I am a Wes Verret. I'm with JPSI Johnson Project Solutions Incorporated and I am a CC, which is a construction coordinator.:
Speaker 4:
7:36
What are your impressions of the, of the speed of construction?:
Speaker 6:
7:40
Extremely fast. Um, they, you know, they did half of this building in 11 days and that's all the wall construction was complete and it, and these are 11 feet walls with many components that go to it with fiber and electricity and all that being done. And it was just blew me away how fast it went.:
Speaker 7:
8:02
My name is Gordon Caudle. I'm the operations manager for the construction division of Johnson Project Solutions Inc. And I'm also a project manager and an estimator for the company. Give us an overview of what this project is. It is a 52,000 square foot TI project . There's some conventional construction but it's mostly DIRTT construction. And we did this in two phases. We had a call center phase and then we had the office phase. They had anticipated that it was going to take about five weeks to stand all of the walls in the office side cause it was quite a bit bigger and they were able to do it and essentially two and a half weeks. Whereas ahead of schedule, we're waiting on the furniture to come. Now:
Speaker 5:
8:52
we were working with not only a lot of square footage but a very quick turnaround time like with most projects you, the client wants it sooner rather than later. And on this, in this project in particular, we were trying to move a lot of people into here very quickly and the lead time was very, very critical. And because of that we're now able to move in actually on schedule.:
:
9:15
If you could say to a superintendent/ construction coordinator on another project who's just like, oh no, you know they're forcing me to do DIRTT. What would you tell them to ease their minds?:
Speaker 6:
9:26
I would say just give it one try, follow through with with everything, just just relax and ask a lot of questions. There's a lot of support out there to help you with the your answers and trust me it will go smooth.:
Speaker 8:
9:44
No, something else we don't talk about much on this show. We're really anywhere around DIRTT is the whole idea of tax depreciation. Yeah. Wooo! Tax!:
Speaker 6:
9:52
Financing structure is really, really attractive and specifically the depreciation opportunities that are associated with buying the product and being able to accelerate that in the first year as much as we've seen, you know, tax reform, adjust what we do in Tenant improvements, there's still a much higher value associated with DIRTT installed than there would be with traditional tenant improvements,:
Speaker 4:
10:14
the cost benefits of going with DIRTT over traditional stick construction is what I use to help make the investment into it. Since we're an owner occupant, we're able to classify this and take immediate tax advantage of all the fixtures from the DIRTT side of it, and that's been able to help with our year one cost of it significantly. It also is going to help with our year two year three and year four costs. As we expand, we know that every single time that we go and we purchase additional walls, we purchase additional glass doors, we make upgrades to the existing DIRTT that we have, we get that immediate tax advantage right away.:
Speaker 8:
10:51
One of the other directions DaBella decided to go was using the PON system instead of conventional copper cabling. PON stands for passive optical networks. That is basically fiber. The big deal about fiber and PON is that a typical copper installation can only go to a radius of 330 feet, and that means you have to build a data room every 330 feet. Whereas with PON you can go 12 miles before you need other data room and that's one little cable rather than 96 is the equivalent of one PON cable. You not only have one single data room, it is a teeny tiny room and you need less cooling for it. You need to have less security because you only have the one room to deal with fire suppression. All of those things, you know, why hasn't PON been used by everyone? Always. Copper obviously came first and all of our devices, whether it's laptops or routers, everything has a copper connection. The deal now is to get all of the, by the way, unlimited bandwidth of PON and not have to worry about your devices on the other end. So the key there is a thing called an ONT or an optical network terminal and it's just this little plastic unit that goes inside, in our case, the DIRTTt wall that allows you to go the last couple of feet as copper and now you can plug in like normal, but the rest of those spaces made of PON. Let's hear what Greg, the CFO has to say about that.:
Speaker 4:
12:24
When we were looking at our network infrastructure, DIRTT was able to bring the PON solution to us. We're very excited. My brother's actually a network engineer even he was telling me it's just like the miles of Cat5 and Cat6 cables you'd have to pull for a building of this size compared to the PON structure that you could probably outfit. This whole building from our server room with under a two inch conduit was very exciting. With our future growth, it was a no brainer to go with the PON system. It had the adaptability to be able to double or triple our call center without having to make additional investment into our hardware back in a server room and to be able to run another couple of miles of Cat5 and Cat6 cable. The minute that they started sharing what the PON system could do for our use, again, being an owner occupant, we also knew the tax advantage that we can have on it. Really made it not only cost effective but it really a no brainer for us.:
Speaker 6:
13:17
This was the first job that I had the plug and play PON and it was amazing how fast they did it. They come in and hook it up and within three or four days they got 300 stations ready to rock and roll pretty fast. Impressive.:
Speaker 5:
13:32
All of us were together in a room and we were able to look over this plan and glean a lot of information. Say this is exactly where we went. Data, exactly. exactly where we want ONTs we planned for the future. So that speaks to the future growth of DaBella is they have all the electrical planned for this entire building and all they have to do is send an email and say, let's go. And they can just drop it all in. Of course, our electrical plan, it was way different. So we had to learn and some of that was learned towards the end of the project. So my encouragement for people using PON on their DIRTT project would be to encourage your client, if you're the designer, to use it from the get go. Because it does create challenges if you do throw in midway and they work through those. But we definitely encourage starting with DIRTT, with the project and starting with PON, if that's the flexibility that you need.:
Speaker 9:
14:17
I'm Bryce Judamen. I am with point monitor corporation and we did the installation of the PON system out here. My role is the foreman for the project. It really struck me how impressive the PON system was when I had to go back and do a traditional installation. I had almost been spoiled by this job site by being here so long. I went and helped on a job in Salem and I spent all day terminating standard data cables going. I really, really took advantage of how convenient the PON system truly is. Not having to terminate and line up 24 gauge conductors and there's six or eight of them in a cable and not having to test every single cable on both ends with two people and walkie talkies and radios. When you're a hundred feet apart, it's just a more intelligent, well thought out design. My overall impression of PON is that it should be installed in more places. If I, if I had my way with it, I'd love to run every PON job that was offered to point monitor.:
Speaker 4:
15:12
I mean when you think of what a server room for a company with 500 employees all having to have phones and computers and accessibility to conference rooms and stuff like that. When you think of the number of switches and how much heat that server room would be putting off and then you go into our server room and you see two small switch panels that's really gonna allow us to do this whole building for both our day one and our day two and 365 use, everything's already built in right there. It's not putting off nearly as much heat. It's a lot easier for our IT director to be able to map everything. You add a new phone and you're not having to go and change this port to this port and this port to this port and to go back and retest it. It's just like, no, everything's out at the PON switches.:
Speaker 9:
15:58
The difference between this and a standard installation has to do with really the size of the backbone. The job we're doing down in another project in Salem, there's like 650 copper lines going from their locations in the field all the way back to the rack. It takes up an entire room and it's a minor walk-in closet full of data terminations. The PON system on the other hand it it's one two posts rack and maybe about a third of it up and they have service to the entire building. The footprint savings are incredible. Large data racks can take up an entire room in some buildings and they've consolidated it down to essentially one rack and also the size of the installation. I've pulled trunks of cat6 so large you can swing from it out here. It was like one line of 16 four and the fiber and that's it. And so the size of the system, the physical labor involved and the footprint saved, those three things are largely different than a standard copper installation.:
Speaker 3:
16:53
We looked at a variety of technologies and PON at this point we think can grow limitlessly. It is as fast as you can get and even if we grow this call center from 75 to 100 to 300 people we'll be fine. We have plenty of bandwidth.:
Speaker 9:
17:11
If this building was a standard installation and the customer wanted to add two drops in the gym and the backend, all of the head end rack is over here in the middle of the building. That'd be about a 500 foot pull for two cables plus two guys through the ceiling two days worth of work terminations at both ends while still maintaining it, looking clean. It would be a hassle to say the least versus the PON system. There's a CP in the ceiling 200 feet away from the gym. You pull one fiber job install one ONT two cables, three hours. I can't stress enough how beneficial the expandability of the system is. That's the number one selling point for me as a technician who's had to go and add to systems for customers constantly who after the fact they get more money or their budget renews or they up their budget for certain additions. But adding to the system that they had already created is more trouble than it's worth or it's twice as much work as it should be versus a PON system.:
Speaker 5:
18:08
I mean even in CA process we've already repurposed rooms. So there has been flexible in that way. As in, we've been able to have data and good locations and PON system planned out pretty well and we've been adding data drops everywhere. Yeah, we forgot to plan some because what always happens and so it's pretty easy to it. It's just like, Yep, we got it.:
Speaker 2:
18:28
There's never going to be a situation where one shoe fits all anymore. You know, even major accounting firms and law firms are trying to figure out how do we be smarter with the space, what are the real key ingredients to recruit the best talent what DIRTT does as much as anything is It literally provides that flexibility in steps so that the room that we're sitting in today, if we decide it needs to be two or three feet more one direction, we can make that happen without impacting the day to day operations. And likewise, if we decided we don't need this room anymore, it can go away and become something different. Again, you get back to what's the real differences between traditional construction and DIRTT? It's that flexibility of change that we see every single day is going to be required more and more.:
Speaker 3:
19:13
one of the problems with conventional construction is that you pretty much decide what the building's going to look like and unless you undergo a huge, massive reconstruction of the building, you're stuck with it. And we know we're going to grow, but we don't always know what the future is going to look like. So having something that's configurable and adaptable just like we are in the business side, was a huge reason we chose to go this direction.:
Speaker 4:
19:41
I thought DIRTT was going to be a good idea the minute they told me how the construct-ability of it goes. I've been in a construction trade is a financial management associate for the better part of 18 years. The first time that DIRTT explained to me how they going to do the majority of their trade work above ceilings, how all the walls are very modular and how we're going to be able to reconfigure our space as we grow without having to make significant capital investments. I was on the hook.:
Speaker 1:
20:08
Sustainability was another priority for the team. So not only is DaBella using an existing building, which saves all kinds of embodied energy, they also had very little material waste on the job site.:
Speaker 2:
20:22
That is the biggest thing. When your clients come on onsite and your job site is so clean. There's no, there's not a whole lot of sheet rock dust, there's not debris everywhere. Everything's organized and it, that really makes your job look good:
Speaker 4:
20:36
so much less. There is so much less material waste. A lot of times you don't know where the head end's going yet or they try and push you onto our project before everything is set in stone and the PON system prevents that:
Speaker 9:
20:48
because it requires it to be completely designed first. So if the customer chooses this form of installation, they have to have those answers before we can begin our work and that is extremely beneficial. A lot of times you get to a project and it's like it's going in this room somewhere and so you pull the cable 50 feet across the room and then it's on the wall closest and then you have 50 feet extra times, 650 cables or however many that installation turns out to be and that is thousands of feet of wasted copper. It's just incredible how fast you accumulate waste.:
Speaker 2:
21:23
Landfills today are mostly composed of building materials and when we look at our long-term responsibility to our kids and the next generations, I think this is an opportunity to have an impact on that. Culturally we would all say we're paying much more attention to environmental impact than ever as the climate is changing and as we see the concerns and questions around temperature around the globe, this is again one of those moments where you can say, okay, I can make a decision that's going to be best for the environment long term or I can make a decision that's consistent with what we've done for the last few hundred years and and if the cost is equivalent or, or you know, in some cases maybe even a little bit more the potential is, but I'm, I'm making a decision that hopefully protects the next generations and that's a really important aspect of this:
Speaker 8:
22:18
as our clients are making their mind up about whether do you use DIRTT or not. One of the things we like to do is invite them to come up to Calgary so they can determine whether we really walk the talk or not. I asked Gordon Caudle the PM on the job if he was a fan of that idea,:
Speaker 7:
22:33
it was eye opening to see actually how big the factory was as a person that had never really seen a modular system. I didn't know that much about it. Obviously it was just an eye opener to what's coming.:
Speaker 5:
22:49
I think one of the most interesting things was the pricing conversation that we had in Calgary, because of course you have design skeptics. It was nice to actually see solid numbers that can compare to conventional design and charts. So as a designer That was really important. And then as a client, I think it really just opened up their mind to what they could do in their own space.:
Speaker 2:
23:11
I'll never forget we were, we were finishing the tour and talking about again, the amount of waste that's created. I can assure you that in the majority of factories that I've walked through the sizes of the dumpsters and the capacity of those dumpsters. Yeah, they're full almost daily. And the big difference with DIRTT is that, I mean we're, we're down to basically the dumpster I have in my driveway at home,:
:
23:36
our trip to Calgary to go and do the factory tour was two of the funnest days I've ever had on the job. The factory tour was one, unlike any factor toy that I've ever been on. They've had it very well:
Speaker 4:
23:46
laid out. They knew exactly how to structure for that where you can see, you know, not only the, the bones of their product, you got the ground onto the manufacturing floor, you to actually see the workers creating each MDF panel. You've got to see them making each aluminum frame. The wood work shop was amazing to go to, to see how they use all the technology tools that they had there. The one thing that I really took away is DIRTT is very well organized and we can see it from how he designed it, into the three d model all the way to seeing the panelists with us SKU codes on the back of the panels. Everything that I've seen has gone well, just like a giant Lego set or a jigsaw puzzle. And that's because it's shipped to our door in a constructable manner.:
:
24:29
The care that everybody seemed to have for each other, the support, the interest in each other's success with super, super high. My wife works in medicine and people who go into medicine go into medicine for patient care because they care about who they're serving on a day to day basis. And generally we would say that, you know, there's service businesses that people would go into and that would be their focus. Rarely does that happen in manufacturing. And I would argue that that's probably a very, very high quotient requirement for most of the employees that are there, which is that they, they go to work for DIRTT because they are seeing themselves make a difference. And it's not just about doing a job, earning a paycheck, taking care of my family or what have you, but it's okay. I'm going to be at a company that when it's all said and done, we did it different and and that hopefully has a longterm effect in a positive way.:
Speaker 8:
25:20
At some point, in every case study we ask our clients about their experience with our software platform called ICE. So ICE is a very big deal because it gives real people the ones paying for the building of the space there'll be occupying for several years. It gives them complete control over the look, performance and cost of the project. The entire team, including the designers and the construction consultants can go inside. The design is avatars. We make everyone an ice cream cone because we're hilarious. Anyway, inside there they make modifications of what they see and how it's going to look and they do that all inside 3-d and immediately they discover if that change makes a difference in the price, will it go up or will it go down?:
Speaker 2:
26:06
I think ICE is, it's a game changer. If you look at how the process of pursuing sites selection, getting to a negotiation design and implementation, ICE squeezes that time-frame of design and implementation by at least half. In this specific project. When we were able to do the virtual tour and get to be the ice cream cones or whatever they call them, the potential was we could make instep decisions, adjust those decisions, right then there was a printout on the profit and loss of what it's going to cost to make that happen. Ultimately, now we don't even have to build it then make the adjustments. So, so those again, are advantages that as much as we're doing virtual tours and we have a lot of 3D dimensional design skill today, it's still isn't quite the same as what we can accomplish with ICE.:
Speaker 5:
26:56
I'd also say to you about working with the ICE software, something that was really awesome was oftentimes when we're doing conventional construction, we don't elevate every single wall. We elevate only the walls that we need to really show some information on and in DIRTT and with the ICE software. While it could be overwhelming at some times you get these submittals and you see every single wall, but then it's really awesome cause you saw every single wall and all the glazing, all the glazing walls are elevated. So now when we want to go back and do graphics and films and privacy screening, we can just send our vendor for the film, the actual whole wall with exact dimensions and they can just print it exactly to that and I don't have to do any more work.:
:
27:39
What are you expecting the customer experience to be like when they come through the doors?:
:
27:43
I think that's the most exciting part because when you think about home improvement and construction, dingy old office, this is going to feel like, I mean honestly this feels like a, you know, a Google or Facebook or something you would see in silicon valley in the tech space. And back to the first impressions. I mean that's a great first impression that hey, this company is different. There's something special about this company and since we're in home improvement and making people's homes beautiful, it's fitting that our offices also look beautiful.:
Speaker 1:
28:16
Thank you for listening to build better. I'm Julie Pithers, and if you have any ideas for shows that we should be doing on the built environment, particularly the insides of buildings, please send them along to hello@DIRTT.net DIRTT is with two ts. Thanks again. Bye Bye.:
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