The Housing Industry

FROM ROOFING CONTRACTOR TO GENERAL CONTRACTOR FOR THE HOUSING INDUSTRY

        Not many remember that the initials B&O stand for Bihler and Oberneder, a company with a long-standing tradition. Established in 1958, it became a leading building contractor specializing in roofing and façades – not only in Bavaria and Germany, but worldwide. During its first 30 years in business, B&O’s prestigious projects included the roofing of the Olympic village in Munich in 1972, airport roofs in Saudi Arabia, and the roofs of many of BMW’s production facilities. Today B&O focuses on the housing industry – the content of our portfolio ranges from structural building appraisal to the renovation of entire residential developments, fixed price routine maintenance and service centers that coordinate repair services. Manfred Neuhöfer, editor-in-chief of Die Wohnungswirtschaft, a trade journal, made his way to Bad Aibling looking for a company both modest and publicity-shy.

        Driving from Rosenheim in a rented car on a foggy morning, I turn into the area of the former U.S. military base Mietraching at Bad Aibling. The low buildings on the right and left of the road immediately remind me of old army barracks, which is what they are of course. This is where Stuka pilots underwent training and Messerschmitt fighter planes were serviced until 1945. When the Americans came in after 1945, they set up a listening post to gather intelligence. They are still active in the vicinity, gathering information by means of huge antenna towers to monitor email, telephone, fax and data traffic. The total area of the base is 130 hectares, of which B&O bought 70 hectares with buildings at the end of 2005 and early in 2006. Over the next few years, B&O intends to turn it into a Zero Energy City as part of the Energy-Efficient City initiative fostered by Germany’s Ministry of Economics and Technology. Here B&O is doing research, trying out new ideas and designing plans on a large scale. More on that later.

        Ernst Böhm welcomes me in a meeting room in the old airfield tower. The furnishings are modest, as is the managing partner himself. Neither his business card nor the B&O annual report makes any mention of his Ph.D. in law. Expertise, eloquence and visionary entrepreneurship are his distinguishing characteristics. The Bad Aibling residential park is essentially his idea. With this project he intends to catapult B&O into a different league of housing construction contractors, once and for all casting off the company’s old roofer image, while still honoring trade traditions. At the heart of all of B&O’s business strategies is the combination of quality workmanship with the efficiency and cost effectiveness of large contracts.

BUILDING WITH WOOD

        We walk across the grounds to the timber construction project called Building with Wood up to the High-Rise Height Limit, which is in fact the reason for my visit. A crane has just set down prefabricated segments for a four-storey wooden apartment building. Carpenters and drywallers are working on the ventilation systems. The wooden structure, built on the basement foundation of a demolished barracks building, is the pilot project for a building system to erect multi-storey residential dwellings of wood. Ernst Böhm and architect Arthur Schankula want to prove that wood can be used to construct aesthetically appealing urban structures in high-density metropolitan areas. All this comes at a reasonable cost – they are aiming for a price of EUR 1,500 per square meter – and it is a model of environmentally friendly construction (see the following pages for a detailed report).

        A residential area designed to make people feel comfortable is being built in the northern section of the grounds. Former officer housing and a casino are being converted into a school and medical services complex, which includes a wellness center and a clinic for outpatients. A conference hotel opened last year. A landscaped park lies to the south. In addition to the apartments already built for park employees, other rental units are coming into being – as is happening everywhere else on the grounds of the former base. A student dormitory has already been built and the holiday apartments in the buildings which used to house soldiers have just been completed. They will soon form part of an exchange system used by housing associations. Construction manager Jens Eitner of B&O Chemnitz and Ernst Böhm are proud of the results. “Early this year we started renovating a housing complex for senior citizens owned by the vhw housing association in Hamburg. While apartments in the complex were being renovated, their tenants came and stayed in Bad Aibling. Ever since renovation started, there have always been 15 senior citizens here at a time. At the beginning it was a huge challenge for these elderly people, but now they feel like they’re on a holiday close to the Alps.” They both chuckle. The first tenants to return to their apartments in Hamburg gave the renovation project the best publicity it could have had.

A BEACON FOR INNOVATION

        When it comes to creating an efficient Zero Energy City, Ernst Böhm isn’t just talking. He is intent on “turning this beacon project into reality”, and Bad Aibling shows that he means business. B&O’s project proposal for the German Ministry of Economics and Technology refers to the project as a prototype and model for other abandoned military, industrial and infrastructural spaces. The proposal also states that “If one keeps in mind that disused land in Germany makes up more than 10 percent of the country’s entire built environment, and that the total area of abandoned military bases in Germany, which could be put immediately to use again, is roughly 750 times the size of the Bad Aibling base, the growth potential of this project becomes obvious”. Indeed, this would enable Germany to aim its land use policy at reducing land usage from 117 hectares per day to 30 hectares per day.

        Until 1997/98, B&O’s main activity was in new construction, particularly commercial buildings. Then the construction crisis hit and delays caused by others involved in B&O projects resulted in contract penalties; the situation was frustrating. Böhm explains the company’s change of course: “Ever since then, we have devoted ourselves exclusively to the renovation of existing buildings, and in 2000 we decided to focus exclusively on commercial residential construction.” He said that this was also the reason why B&O was not affected by “the really serious crisis of the last three years”. At the same time, ownership structure also changed. The heirs of the original founders sold the company in 1989 to a subsidiary of the Deutsche Bank. Between 1990 and 2003, the company was in the hands of four consecutive private equity investors. Böhm, who had been the company’s managing director since 1993, left for a sabbatical at Harvard in 2001, and in a management buyout, he and three other colleagues (Jochen Töpfer, Brigitte Dworak, and Peter Münn) took over B&O. Today B&O has three main regional divisions and B&O Service, with offices in 28 German cities as well as branches in Salzburg and Breslau. Local managers have a 20 percent share in 15 local limited liability companies. Some 750 employees, including a social worker and a psychologist, generated turnover of approximately EUR 220 million in 2009.

REPAIRS – A PHONE CALL AWAY

        “B&O keeps improving its processes”, Ernst Böhm explains. According to him, this is the only way the company could become a market leader in Germany for comprehensive redevelopment projects. About 8,000 apartments are renovated every year. B&O looks after the upkeep of roughly 400,000 apartments belonging to 100 apartment housing companies with whom it has fixed-price maintenance contracts. Two service centers in Bad Aibling and Berlin, with 25 employees each, are responsible for initial contacts with tenants. As soon as a tenant calls, their file immediately comes up on the screen and service staff at the call center can propose a time and date for repairs to be done because the program also displays information on the availability of B&O technicians in the area. It even calculates the average time needed for the repair job, including the time it takes a technician to get there and back. “This really accelerates the complicated process of coordinating appointments between tenants, repair crews, and housing companies”, says Uwe Gründken, head of business operations at B&O Service in Bad Aibling. Technicians are informed of new appointments via UMTS on their tablet PCs and then work along the routes given. B&O specializes in repairing insurance damage claims. Over-particular insurance companies like seeing transparent rates and precise schedules.

        Furthermore, B&O guarantees that an apartment to be renovated will be ready for rental again within a month of being vacated. “This means significantly lower vacancy rates”, Ernst Böhm explains, adding that this could be significantly improved if B&O were also given an – anonymized – copy of the written notice, which would allow them six weeks to thoroughly prepare the renovation job. Böhm is also assertive in proposing a nationwide benchmark for maintenance and renovation services, similar to the Geislinger Convention, a German concept designed to reduce ancillary rental expenses. He is critical of the “sledgehammer approach” taken by some housing companies managed by private equity investors: “A high rate of fluctuation costs the most money.” In contrast, B&O prefers to focus on reliable maintenance and upkeep, avoid a backlog in renovations, and look after neighborhood management and related social measures. Moreover, B&O has found that bathrooms play a key role in the way tenants evaluate the entire renovation process. Böhm also sees a huge future market for controlled indoor ventilation systems, but costs are still an obstacle here. Although today the average cost of a system is still EUR 4,000 for each apartment, B&O offers it for as little as EUR 2,500 (excluding heat recovery). This cost will soon fall below EUR 2,000, he says, adding that “if several large housing companies got together and placed large-scale orders, we could soon offer it for around EUR 1,500 per unit.”

B&O RESEARCH

        B&O is also committed to research. For the past five years, the Technical University of Munich and ift Rosenheim (a window technology institute), both of which are moving to the B&O project area in Bad Aibling this year, together with the Rosenheim University of Applied Sciences, have been experimenting with 15 different types of ventilation systems in a model house on the park grounds. Several awards for Bauherren [builders] show that B&O’s passion for construction is paying off. In honor of the company’s 50^th anniversary in 2008, the staff thanked their boss in an unusual way. They bought an old Russian helicopter, brought it to the old airfield on a flatbed trailer, and restored it, putting in many hours after work. Now it’s outside Böhm’s office, next to a pole with a windsock, looking like it is ready for takeoff. But it’s planted firmly on the ground – just like Ernst Böhm himself.

Author: Manfred Neuhöfer

Download as a PDF.