Market Outlook Construction Forum

Summary

as of August 7, 2020

Presenters o Richard Vermeulen – Lead Economist, Vermeulens o Daniel Aizenman – Senior Principal, Stantec o Sarah McGarry – Principal, Stantec

Macro to Micro Analysis, Vermeulens Current Economics & Labor Market Data

o 3%‐4% escalation for long time horizons o comparison of COVID timelines extrapolated from real time data across several global jurisdictions o holding unit rates at March 2020 values, until bid data is substantial o comparison of macro timelines between this and previous recession o monetary stimulus maintaining consumer prices and incomes despite drop in GDP o some offsetting cost increase for COVID measures and construction efficiency o Vermeulens bid data show rates stable or declining for 5 to 10% of projects o consider design add alternates in the 10% cost range

Getting Back to Business and Social, Stantec Short Term

o utilizing temperature heat mapping to figure out the safest ways for people to share workspace o normalizing signage will be vital, both indoor and outdoor o increase in the use of new health and wellness technologies (e.g. washroom occupancy lights, custom door

handles, etc.) Medium to Long Term

o working from home will become a normality and will remain so for a long time o insufficient evidence that implies a decrease in real estate o some changes to space allocation and health and wellness prioritization are expected o interior design will have a stronger focus on biophilic design and a more “home” like feel

COVID Ready World, Vermeulens low cost/high efficiency cost models for transportation, green infrastructure, home, work, and institutional uses integrated design processes as they iterate for a variety of different scenarios taking the long view on our built environment gathering and measuring data for home, work, and social scenarios Future Agenda August 21st

o SOM: Higher Education Design Implications

Macro to Micro – Great Recession

Macro to Micro –

Macro to Micro – Fed Watch

0.0

2.5

5.0

7.5

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12.5

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8

NYSE

/ Un

empl

oym

ent

Rese

rve

Asse

ts /

EFFR

/ PC

E / G

DP

Reserve Assets [Trillions]

Effective Federal Funds Rate [%]

Unemployment Rate [%]

NYSE [relative scale]

Macro to Micro – Consume Price Inflation

Macro to Micro - Escalation Position

• Budgeted rates maintained at or past the Design Development stage

• 3%-4% escalation below the line for projects with long time horizons

• Line item unit rates will be held at March 2020 values until bid data shows a trend

• No reliable data or history on how long or deep this downturn will be

• Offsetting cost increase for COVID measures and construction efficiency

• Vermeulens bid data show rates stable with declines on 5 to 10% of projects

• Recommend design add alternates in the 10% of cost range

Macro to Micro – Macro Flattening?

Macro to Micro – Herd Immunity?

antibodies were only found in 6.1 per cent of the samples collected nationwide in the week ending May 24 – though immunity could be much higher

Afternoon all,

We are pleased to inform you that the COVID Alert app is now available for free from the Apple and Google Play app stores.

This new made-in-Ontario mobile privacy-first app, a joint initiative of the Governments of Ontario and Canada, lets you know quickly if you may have been exposed to COVID-19. You can then get tested, sooner, to help protect yourself and those around you.

COVID Alert also provides access to the most up-to-date public health advice and resources to anyone who receives a message that they may have been exposed to the virus, including recommended actions, such as: get tested, self-isolate, or monitor for symptoms. To protect the privacy of all users, the app does not share any details about the time, date, or place of any potential exposure; and does not collect or share any personal information, such as the name, phone number, permanent device identifiers, locations or testing status of any users.

By alerting more Ontarians faster of potential exposure to COVID-19 and providing direct access to public health resources, COVID Alert can help keep us safe and help reduce community spread.

While the app is voluntary, we encourage you to download and use the app to help protect yourself and your colleagues. Please promote and introduce this key tool to your colleagues, family, friends and neighbours. The more of us who use the app, the more effective it will be in helping to stop the spread.

COVID Alert marketing materials can be found on the following Google drive.

Macro to Micro – Contact Tracing

Macro to Micro – Containment Sawtooth?

Macro to Micro – Macro Flattening vs Micro Containment

Macro to Micro - Job Creation and Employment by Sector

US Employment (millions)

Jan-08 Feb-10 Feb-10 to Feb-20 Feb-20 Apr-20 Jun-20 Feb-20 to Jun-20

Total nonfarm 138.4 129.7 22.7 152.4 130.4 137.8 -14.6

Total private 116.0 107.3 22.4 129.7 108.6 116.5 -13.2

Goods-producing 21.9 17.6 3.6 21.2 18.7 19.9 -1.3

Mining & logging 0.7 0.7 0.0 0.7 0.7 0.6 -0.1

Construction 7.5 5.5 2.1 7.6 6.6 7.2 -0.4

Manufacturing 13.7 11.5 1.4 12.9 11.5 12.1 -0.8

Private service-providing 94.1 89.6 18.9 108.5 89.9 96.6 -11.9

Trade, transportation, and utilities 26.7 24.5 3.3 27.8 24.5 25.7 -2.1

Business 29.3 27.0 6.3 33.3 30.4 30.9 -2.4

Education and health services 19.0 19.8 4.8 24.6 21.8 22.8 -1.8

Leisure and hospitality 13.5 12.9 4.0 16.9 8.6 12.0 -4.9

Other services 5.5 5.3 0.6 5.9 4.6 5.2 -0.7

Government 22.4 22.5 0.2 22.7 21.8 21.3 -1.4

Getting Back to Social

Daniel AizenmanSenior Principal

Visioning, Brands, Experiences

Sarah McGarryPrincipal, Interior Design and Workplace

B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s

Since 1972

Preparing properties for the return of all those who work, visit, live, connect, interact and provide service to these properties with protocols, information, security and amenities that respect, educate and facilitate new behaviors required for proper social distancing, hygiene and safety… in the aftermath of COVID-19 and in preparation for possible future events.

This presentation contains a range of ideas to consider as properties begin to return to normal operation. Our thinking has considered the practicality, simplicity, and immediate deployment needs for:

• Short-Term (1-6 months)• Mid-Term (6-18 months)• Long-Term (18 month +)

Sectors Covered

General OfficeOffices

Laboratories

Getting Back to Social

Getting back to SOCAL

Getting back to SOCIAL

CHALLENGE

1 4 532

1

2

2

3

4

5 GETTING TO THEOFFICE SAFELY1 AT HOME APP, DIGITAL CHECK IN2 COMMUTE DRIVE, TRANSIT, WALK, PARK3 ENTRY QUEUING, LOBBY, RECEPTION, SECURITY4 CIRCULATION ACCESS, DOORS, ELEVATORS, STAIRS5 OFFICE INTERNAL AREAS OF INTERACTION

EXTERIOR ENVIRONMENTS

B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s

Since 1972Getting Back to SocialGetting back to SOCIAL

Getting back to SOCIAL

FACILITYTOUCHPOIN

T

B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s

Since 1972Getting Back to SocialGetting back to SOCIAL

Getting back to SOCIAL

BRAND RECOGNITIO

N

TYPICAL OFFICE ENTRY DOORCONDITION1. HAND SANITIZER UPON EXIT2. WALL-MOUNTED TISSUE

DISPENSER3. REVOLVING DOOR FOR

EMERGENCY EGRESS ONLY4. DEDICATED DOORS FOR

SINGLE- DIRECTIONTRAFFIC

12

3

4OUT

4IN

CONSIDERS A 360êDEGREE SAFE ZONE

PRE-PANDEMICCONDITIONS

STANTEC NYC OFFICE

POST-PANDEMIC CONDITIONS

STANTEC NYC OFFICE

STANDARD APPROACHCREATES OVERLAP IN SAFE ZONE UNINTENDED

OVERFLOW

22PEOPLE

29PEOPLE

18PEOPLE

18PEOPLE

SecurityDesk

Elevator Bank

SecurityGates

RevolvingDoor

Door

Door

SecurityDesk

ElevatorBank

RevolvingDoor

Door

Door

SecurityGates

Person

SafetyZone

Stanchions

Safe ZoneOverlap

SafeZone

QueuingPath

The picture can't be displayed.

QUEUING OPTIONS

Getting back to SOCIAL

B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s

Since 1972

B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s

Since 1972

B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s

Since 1972

Getting back to SOCIAL

SOLUTIONS?ELEVATORSOLUTIONS

B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s

Since 1972

Getting back to SOCIAL

ELEVATORSOLUTIONS

B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s

Since 1972

Getting back to SOCIAL

LOBBY RECEPTION

B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s

Since 1972

Getting back to SOCIAL

MEETING ROOMS

B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s

Since 1972

Getting back to SOCIAL

RESPONSE TOOLS AND AUTOMATED

SANITIZATION STATIONS

B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s

Since 1972

Getting back to SOCIAL

RESTROOMS

B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s

Since 1972

Getting back to SOCIAL

ON/OFF SOLUTIONS

B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s

Since 1972

Getting back to SOCIAL

INDIVIDUAL SANITATION

WHERE WILL WE

BE IN 12−24

MONTHS?

SPRING/ SUMMER

2021

WORKPLACE

2

Getting back to SOCIAL

WORKPLACE SURVEY

THE SURVEY

IMPACTS OF WFH ON THE FUTURE WORKPLACE?

SHORT TERM

18%

LONG TERM 82%

AVERAGE EXPECTED WFH DAYS/WEEK 86% SAY 1-3 DAYS/WK

04

3

2

1

Getting back to SOCIAL

WORKPLACE SURVEY

130 COMPANIESPARTICIPATED•Remote Work is here to stay•Choice is the Future•Over 50% of people have a more positive view of remote working

2

2

Getting back to SOCIAL

WORKPLACE SURVEY

WHY COME TO THE OFFICE?

1—COLLABORATION & FACE TIME

WITH CO-WORKERS

2—

SENSE OF BELONGING & CULTURE

3—

COMMUNICATE BRAND & OUR PURPOSE

SANITATION OF WORKPLACE

PROXIMITY TO PEOPLE

80

604020

SAFETY & SECURITY

0

TOP 3 CONCERNS ORGANIZATIONS HAVE FOR RETURN:

THE SURVEY Getting back to SOCIAL

WORKPLACE SURVEY

80

• No significant short-term changeinReal Estate portfolio

• Space standards and allocations remix

• Activity based office work programs• Define Choice overlaywith

Organizational Culture• Health & Wellness is a toppriority• Push Smart Building Tech to

forefront

“We are remotework

capable.Having an office is a cultural choice

rather than a necessity. We need to decide

goingforward how

important that office is to our culture.”

FOCUS WORK COLLABORATIVE HUB = CHANGE ON CULTURE & DESIGN SOLUTIONS

THE RESULTS

WORKPLACEENVIRONMENTSWHAT IS THE FUTUREOFFICE?

ABLE TO EFFECTIVELY

NEUTRAL13%

AGREE 58%

STRONGLY AGREE

23%

DISAGREE 6%

1-2

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3-4

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POST-PANDEMIC YOU WOULD BE MOST EFFECTIVE

PRE-PANDEMIC, ON AVERAGE HOW OFTEN DID

1-2

days

/mon

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"A DAY IN THE LIFE"SO HOW DO WE PUT THE IDEA OF CHOICE

INTO ACTION?

WORKPLACEENVIRONMENTS THE NEW PARADIGM

WHAT SMART BUILDING AMENITIES SHOULD YOUEVALUATE IN THE TRANSFORMED WORKPLACE?

LightingControl

HVACControl

ENERGY MANAGEMENT

R�al Estat�Optimization

Mtg. RoomSch�duling

SPACE UTILIZATION

Em�rg�ncyR�spons�

SmartSurv�illanc�

SECURITY & SAFETY

Equipm�ntTracking

P�opl�Tracking

LOCATION SERVICES

People Counting — WorkplaceIntelligence

ThermalComfort

SmartLockers

SmartAccess

TECHNOLOGYGetting back to SOCIAL

B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s

Since 1972

Getting back to SOCIAL

WORKPLACE CASE STUDY

KEY CONSIDERATIONS• Wider aisles• Buffer zones between open

workstations• Unassigned work carrels

along window wall• Workroom for teaming with

120configuration

• Offices with small meetingarea

• Mobile furniture for agiledesk orientation

OPEN WORK AREA• Wider corridors to avoid contact while navigating

space• Collaborative spaces used as buffer zones between

stations• Greater distance between clusters of stations

WORKPLACE CASE STUDY

FORMAL COLLABORATION• Visibility into larger meeting

spaces ensure meeting capacities are maintained

• Wider corridors in front of larger meeting spaces to avoid contact

• Reduced seating capacity inmeeting spaces

WORKPLACE CASE STUDY

WORKPLACE CASE STUDY

INFORMAL COLLABORATION• Isolate open collaboration spaces minimizing

contact• Reduced seating capacity

WORKPLACE CASE STUDY

WHAT DOES WORKPLACE CHOICE MEAN TO YOU?IN A WORD, WHAT DO YOU MISS ABOUT GOINGTO THE OFFICE?

SOCIAL

COLLABORATION

CITYcoffee PEOPLE SOCIALIZATION

energy

chair

charette

conversing

movement

gossip

colleagues

change INTERACTION pants

buttons

CONVERSATION

EYES FAMI LY

S E C E N E R Y

physical ADULTS

connectedness

connection

socializing

n o t h i n g

CONNECTIONSinteraction

space

UNEXPECTED

LEADERSHIP

desk

LAUGHS DIFFERENT

IDEAS

FOCUS s h o p s

CLIENT WALKS commute

timeWINE

LUNCH

FLEXIBILITYspending

SLEEP

pajamas

dogs

much

CHEAPEFFICIENCY

s h o r tMOVEMENT

CASUAL

connection

relaxation

sav ing bra

mak eu p

HEALTH FOODFAMILY

athleisure FREEDOM flexibil ity

FLEXIBLE C R E A T I V I T YPRODUCTIVITY S U N

focus

DINNER

kids MONEY comfort

CHOICETHE IMPORTANCE OF CHOICE IN THE NEXT NORMAL

COLLABORATION | SOCIAL INTERACTION | COMMUNITY | CULTURE | BRAND | TECHNOLOGY

HOW TO SUCCESSFULLY

IMPLEMENT FUTURE OFFICE

STRATEGY?

• CulturalAcceptance

• HR Policies & Governances

• Operational &FunctionalRequirements

• Organizational Behavior & Culture –Macro andMicro

• CRE Utilization Metrics

• Technology Integration & Smart Building

• Management Training

• Industry Specific/ DepartmentSpecific

WORKPLACE

B o s t o n N e w Y o r k T o r o n t o S a n A n t o n i o D e n v e r L o s A n g e l e s

Since 1972

Getting back to SOCIAL

THANK YOU!

DESIGN WITH COMMUNITY IN MIND

Daniel AizenmanSenior Principal, Visioning, Brands, Experiences

Email: Daniel.Aizenman@Stantec.com

Sarah McGarryPrincipal, Interior Design and Workplace

Email: Sarah.Mcgarry@Stantec.com

Macro to Micro – Ecology Wellness Economy in a Covid Ready World

Green at No CostIntegrated Design

Macro to Micro – Green Infrastructure Access and Mobility

Macro to Micro – Covid Ready Transportation

Macro to Micro – 19th and 21st Century Networks

Macro to Micro – Planning Framework Walkability

Macro to Micro – Planning Framework Adaptability

Macro to Micro – Live Work Mixed Use

Macro to Micro – Cost Models and Integrated Design

Macro to Micro – Mission Vision Values

Green InfrastructureAccess AbilityMacro MobilityRight Size BuildingSprawl On

Macro to Micro – Work and Work Travel Post COVID?

- Work from home increases 1 day per week globally- Work from home increases 2 days per week for workers in

central business districts- Office space shrinks 25% globally due to hoteling- Rush hours distribute across 7 to 7 spectrum for central

business districts- Offices become poly nuclear 20% utilizing share space- Intercity business travel decreases 20%- Interstate business travel decreases 30%- Home delivery increases 25%- Pre-order and pickup increases 25%- Mass transit funding collapses- Rideshare shifts to trusted networks- Mass gatherings become segmented