Construction is underway on Level, a 114-unit apartment building in Hubbell Realty Co.’s Bridge District, located south of Interstate Highway 235 and east of the Des Moines River. Photo courtesy of Hubbell Realty Co.

Hubbell Realty Co.’s plans to build a five-story, 114-unit apartment project in its development east of the Des Moines River and south of Interstate Highway 235 became public in August 2019.

The $28 million project received all the necessary city approvals, allowing plans for an early 2020 construction start to move forward.

The plans, though, were stalled when the pandemic hit. Other issues, experienced by developers nationwide, emerged: Materials for the project became hard to obtain. Prices rose. A labor shortage, particularly in the areas plumbing and heating and cooling, became more acute.

All of those things made a 2022 completion for the apartment project impossible to meet.

In early summer, Hubbell officials announced that the project was ready to start. Still, little activity occurred on the site until last week when construction began on the elevator shafts.

“We’ve been saying for months now that there’s been three issues in the market – pricing, availability of materials and a trade labor shortage,” said Casey Port, a vice president in construction for the West Des Moines-based Hubbell Realty. “This project really was affected by all three.”

The apartment project, called Level, is located in the Bridge District, a townhouse and apartment development started in 2015 by Hubbell. When completed, the development is expected to be valued at nearly $112 million and include about 1,000 people living in 477 residences.

Construction of Level is expected to be completed by mid-2023, barring any other delays, which developers nationwide have been dealing with for more than a year.

According to the Associated General Contractors of America, most contractors have been experiencing delays in shipments of many types of materials. Frequently, it’s difficult to predict when supplies will arrive, the Arlington, Va.-based group has said.

Adding to the frustration is the double-digit percentage increases in the cost of materials used in every type of construction, according to the association. The producer price index for steel mill products jumped 123% between August 2020 and August 2021. The index for plastic construction products increased 29.6% and lumber and plywood, 15.9%.

Port said the prices have increased for nearly all of the materials needed to build Level.
Originally, the lumber package for the project was expected to cost $700,000, he said. In the first quarter of 2021, the package cost about $2.2 million, he said. Lumber materials were ordered when lumber prices dropped.

Plumbing supplies including toilets, sinks, showers and faucets have been difficult to obtain, Port said. Hubbell ordered all of the plumbing supplies needed for the project six months ago and is storing them in a warehouse.

“This is forcing developers and builders to make decisions about products sooner,” Port said. “We are having to procure the materials sooner and potentially having to warehouse them.”

Hubbell plans to start construction of an industrial warehouse in Ankeny in the spring. The company has already ordered the roofing material that will be needed for the project, as well as the insulation, steel and precast concrete panels, Port said.

“Those are things that we’re having to do now that we really never had to do before,” he said.
Port said there likely is enough warehouse space in the Des Moines area to store construction materials. Builders could also store the materials in temporary buildings on a construction site or in storage containers, he said.

Ordering supplies early or when dips in prices occur helps keep the project costs close to budget, Port said. “We can protect against the availability of supplies and price hikes. What we can’t protect against is the labor issue.”

Port said Hubbell typically works with certain plumbing and heating and cooling companies on large projects like Level. Early in the fall, Hubbell heard from the companies that they didn’t have enough workers and were forced to bow out of the project, he said. “We’ve never had somebody come to us and say, ‘Hey, I can’t do it,’ especially for this size of a project.

“I think people have left the industry and doing other things. We were facing a [labor] challenge before the pandemic; it’s gotten worse.”

Editor’s note: This story has been updated to include the accurate expected completion date of the apartment project, which is mid-2023.

Related article: New 114-unit apartment project will receive up to $4.8 million in financing from Des Moines

Construction of Level, a 114-unit apartment building in Hubbell Realty Co.’s Bridge District, is expected to be competed in mid-2023. Rendering by Slingshot Architects