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The Rich are Paying a Premium to Build Faster
Existing-home sales fell to a nearly 10-year low last month, and major builders are reporting big losses. But a small group of wealthy people unfazed by the downturn are paying big premiums to have houses erected in record time.
I am 3 weeks into the process with a client of taking a concept to plans, to permit, and the plan to break ground in Cascade in November with occupancy by the end of the year but this takes it to a new level.  While I am sure we can all find some solace in having a client that doesn't have time to change their mind I am betting that if you are not careful you could have some serious quality issues.  But if money is not an object . . . you could pay to make it better right?

By Sally Beatty
From The Wall Street Journal Online

Existing-home sales fell to a nearly 10-year low last month, and major builders are reporting big losses. But a small group of wealthy people unfazed by the downturn are paying big premiums to have houses erected in record time.

Robert Lapidus, a 46-year-old real estate executive, recently hired builders to put up a 10,000-square-foot second home in Bridgehampton, N.Y., in 10 months -- compared to the two years it normally would take to construct a house that size. The accelerated schedule, he says, reflects his desire to spend as much time with his family as possible before his two kids, ages 13 and 16, leave home for college.

"Time is money for everyone," says Mr. Lapidus. "Those of us who work hard, we want instant gratification, and speed is part of that." While he admits this might be considered a "personality defect," he says he shares it with friends also building Hamptons houses. "This is not a group of people who want to stand in line to get into a restaurant. They call someone to cut in line," he says.

Related Links

Read news and analysis on the housing market at's Developments blog.

The Real (Dismal) Picture on New Home Prices

As anyone who has worked with a contractor can testify, such expedited construction is still rare. But builders in wealthy suburbs like Greenwich, Conn., and in resorts areas like Aspen, Colo., say such projects represent a growing percentage of their business. To pull them off, specialized builders are deploying small armies of workers who often work seven days a week. Joe Farrell of Farrell Building, which is constructing Mr. Lapidus's house, says it's not uncommon to have 70 people working on a job site in a single day. For a Connecticut mansion, a contractor sent five dozen masons and laborers to build in two days a 480-foot stone wall that normally would take months to complete. The builders also use complex staging tactics to slash the time it takes to construct a house by half or even more.

Going fast is expensive, with contractors charging anywhere from a 20% premium to double the price, depending on the work. Still, these high-end builders say neither the housing slump nor the credit crunch has slowed their business. Vincent D. Tyer III, whose Taconic Builders has offices in Oyster Bay and Westchester County, N.Y., says half of the custom luxury homes he is building are on an accelerated schedule. Don Lockard, whose Easton, Pa., firm specializes in custom cabinetry and woodworking, says accelerated projects make up more than three-quarters of his work.

In Aspen, fast-track projects now account for 80% of Silich Construction's job portfolio. Builder John Silich says there is a steady supply of clients who have "more money than time." He adds: "They want to enjoy their investments. And they want to enjoy them as quickly as possible."

See what fast-tracking various projects will cost you via an interactive house schematic.
After movie producer Sidney Kimmel and his wife, Caroline, bought Johnny Carson's old house in Malibu, Calif., earlier this year, they put contractors on a fast track so they could move in by midsummer. Renovating the 10,000 square-foot-house, which the Kimmels purchased in March for close to $40 million, would normally have taken well over a year. Ms. Kimmel turned to I-Grace Co., a builder that caters to wealthy homeowners and often handles high-speed work.

"At one time we had 60 painters on the job," recalls the 58-year-old Ms. Kimmel. "Many weeks, they were in there seven days a week." Four-and-a-half months later, "when my husband walked in that house he could not believe it. There was not a detail that was missed, everything from the dishes to the clothes hanging in the closet." It was, she says, "like a miracle." Ms. Kimmel says she has no idea how much more the speeded-up work cost since what was more important to her was moving in on time: "I didn't want to waste a summer."

This past summer, the family of Fortress Investment Group President Peter L. Briger Jr. moved into a traditional shingle-style mansion in East Hampton, N.Y., that was built in just 18 months. Normally, a house that size would have taken about 2½ years to construct. Last year, the hedge-fund executive paid $18 million for the five-acre property, where a 4,000-square-foot home stood, according to a person familiar with the transaction. In early 2006, crews began to tear down the old house, and contractors went to work on the Brigers' 12,000-square-foot spread. It was finished in time to give the Briger family a full summer at the beach.

"That was part of their deal," says Steve Howard, a project manager at Wright & Co. Construction Inc., which oversaw the project. "They wanted to have it ready for the following summer." Mr. Briger declined to comment.

Hedge-fund mogul Steven A. Cohen, founder of SAC Capitol Advisors, recently spent $18 million on an East Hampton mansion that went up in 10 months, according to a person familiar with the home. It was built by the same contractor that put up Mr. Lapidus's house, Farrell Building of Bridgehampton. (A spokesman for Mr. Cohen, Jonathan Gasthalter, declined to comment.)

Beyond the added costs, homeowners on a fast schedule can be forced to compromise -- doing without a complex roofline or elaborate carved moldings, for example. Or, they may be compelled to use plans devised by the builder -- which he may have used in a slightly different version to construct another house -- instead of hiring their own architect. Most often, homeowners who want accelerated timetables give up the right to dither over design decisions and must stick with choices once they are made.

Ms. Kimmel understood she had to make compromises to move into her new Malibu home on time. "We had a Plan A and a Plan B," she says. Plan A comprised what the Kimmels really needed to be finished on time. Plan B included items that the builder could complete after the couple had moved in. "They were very realistic about what they thought they could produce in the time frame available," says Ms. Kimmel. So while the plumbing was redone before the summer they waited to replace the septic and air-conditioning systems.

Mr. Silich of Aspen presses homeowner-clients to make decisions on sinks, tiles and other items long before the foundation has been poured, so they can be ordered in advance and stored on site in the exact sequence they will be used. (To keep pricey or delicate items safe from theft or damage, he secures them in locked containers.)

Still, many high-end finishing treatments, including wire-brushing, staining and rubbing, need to be done by hand -- and throwing an extra person on the job can create inconsistencies in custom finishes. One artisan's approach to brushwork, for example, may be noticeably different from another's. Other costs associated with high-speed construction are harder to quantify. The big work crews needed to expedite jobs can alienate neighbors by generating additional noise and congestion.

And high-speed building can be risky for contractors. For one thing, few housing markets are rich enough to support these builders' big, high-cost operations. "We pay our bills every week, so subcontractors flock to us," says Mr. Farrell. But "you need to be constantly starting new jobs to feed this monster. It eats money."

The rapid construction of a Greenwich, Conn., house shows how such a machine works. The 10,000-square-foot, three-story home went up in under six months. The key: a huge crew, instant access to all manner of heavy machinery and precision-staging.

Builder Mark Mariani purchased the property in September 2006 for $3.25 million, according to property records. He says he routinely sent more than 100 workers to the site in a single day to dig ditches, put up walls and install plumbing. To erect the stone wall in front of the house in two days, Mr. Mariani deployed a seven-truck convoy to transport more than 60 workers, who spilled out the back early one morning last winter armed with trowels, axes and metal picks. "They were crawling all over the place, like ants," says one neighbor, David Sebastian, a builder himself who lives three doors away. "It was like War of the Worlds."

As the winter sun set, giant highway lights powered by generators illuminated the three-acre property, according to several neighbors, allowing four excavators, two mechanized hammers and a gravel-pulverizing machine to continue smashing rocks until exactly 6 p.m., when local zoning regulations require construction crews to stop work for the day.

Mr. Mariani is able to meet a high-speed schedule by maintaining a large vertical operation, keeping more than 250 people on his payroll, including painters and carpenters. He even installs landscaping using his own nursery. (An instant wall of vegetation can help placate neighbors.) "The key is to be organized," he says.

But such quick work can result in lapses. One person familiar with the Greenwich property says it has been plagued by annoyances such as sticky drawers and missing shelves. Lighting installed in the roof of the wine cellar has no vapor barrier, which upsets the delicate temperature-control system. And the wine cellar's oak paneling was stained with polyurethane, which some wine enthusiasts say may create fumes that can seep into corks.

The house was purchased last May by investor Steve Johnson and his wife for $9.6 million, according to property records. Mr. Mariani says that "some people prefer polyurethane because it can prevent mold," and that he wasn't aware of the other problems.


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Posted by Nic Stover at 10/29/2007 10:13:00 PM
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