Custom Design-Build in ATX | Q&A w/ Lex Zwarun, Newcastle Homes

"9oh3" designed by KRDB. Spaces are defined yet connected, styles are eclectic but cohesive. Photo: Elena Grey
“9oh3” designed by KRDB. Spaces are defined yet connected, styles are eclectic but cohesive. Photo: Elena Grey

The 2015 Austin Modern Home Tour is just a month away, and will again feature cutting-edge designs from Austin’s best architects and builders. With two homes on this year’s tour, Lex Zwarun, founder and principal of Newcastle Homes, has agreed to share his vision of what modern building means in Austin.

Zwarun’s unique take on creating a modern home has made Newcastle Homes a single-source, one-stop-shop for modern green urban infill homes. Newcastle – a design-build firm – offers a uniquely comprehensive approach to green urban residential development. Working intimately with their clients to deliver a custom-style home, Newcastle is involved from the earliest conceptual phases through the finance, design, and construction of a home.

Design-build, as Lex describes it, is a delicate balance of form and function. A bunch of forces must work in tandem to respond to a complex bouquet of factors – a client’s taste and budget, a site’s topography and solar orientation, a neighborhood’s character and architectural vernacular, to name a few.

We chatted with Lex about design-build “the Newcastle way,” the challenges and opportunities of green building in the urban core, and how to cost-effectively (and sanely!) confront the financial realities of the custom design-build process.

Q&A w/ Lex Zwarun | Founder & Principal, Newcastle Homes

Newcastle Homes offers a uniquely comprehensive approach to green urban residential development.  What is your approach to design-build, and what makes it successful?

Newcastle’s approach is truly comprehensive right from the start, and that makes for a better project and creates more value for our clients. We involve architects, engineers, and other experts in our lot selection and initial project conceptualization, and we pride ourselves on extremely thorough due diligence.

We specialize in green urban infill development at relatively affordable price points, and that poses additional challenges. Infill development on a budget is inherently more difficult than modern design-build on large lots or in new subdivisions. We always joke how easy it must be to have a huge budget and a big piece of land with new infrastructure, but since being green, an intimate part of the ATX lifestyle, is so important to us and our clientele, we stay close to downtown in the urban core and have become expert at assembling a winning team, the right ingredients, and identifying hurdles early on so we that can not only get over them, but turn these challenges into unique opportunities to be seized.

Design-build is the delicate balance of form and function—you have to choose the right site, put the right team together, and consider a diverse array of factors, from a client’s taste and budget to things seemingly mundane, like trees, utilities, and sidewalks. Of course other factors matter, like solar orientation, topography, existing neighborhood character, the local architectural vernacular, and more. Our goal, and what I think makes Newcastle unique and successful, is thinking of ALL these things right from the start and getting ALL the right team-members involved and cooperating immediately.

"Double-O-Seven" designed by Francois Levy, AIA. Highly connected outdoor living spaces are an essential element of Newcastle Homes' projects. Photo: Jonathan Garza
“Double-O-Seven” designed by Francois Levy, AIA. Highly connected outdoor living spaces are an essential element of Newcastle Homes’ projects. Photo: Jonathan Garza

Can you walk us through the process of building a modern home in Austin? What’s the timeline?

We are a one-stop shop for modern green urban infill homes. There are so many moving parts to this process and people are so busy that by single sourcing them all through Newcastle we make things understandable, doable, and fun, all while creating value that we pass on to our clients. Newcastle provides all the major elements needed to make design-build a reality for just about anyone: lot, financing, design, construction, and brokerage services. This not only makes things easier and less expensive, it provides significant peace of mind to our clients that a trusted expert is on top of everything they need to know and do!

The first step is understanding what the client wants or what we want to create (for our spec homes). Communication is key with clients, and for specs we try to react to the market and design trends quickly, but we also try to steer the market and design trends with our own style and approach. The first thing we do is assign our potential clients some ‘homework’:

  • In one or two sentences, what do you want your home to be?
  • Price point?
  • Financing plans?
  • Location?
  • Must-have features/specs?
  • Outdoor living desires?
  • Parking needs?
  • Any other unique and/or critical things we should know about you and your program?

Once the basics above are understood, we send clients out on a self-guided tour of past and current projects. This provides excellent context in many vital areas: different architectural styles/architects, different neighborhoods, size (what does a 1800 s.f. 3-2.5 on a .16 acres lot really look and feel like?), pricing, etc.  This technique is unique, very well received, and really jump-starts the process!

After getting feedback from the tour and more discussion with our client, we challenge them by asking WHY they want and like the things in their design program. This allows us and our team of experts to even better and more efficiently help them realize their goals. This is a unique step – and while it catches many clients off guard at first, it truly adds to our process and their project.

After the above is completed, which usually takes about 2 weeks, we figure out financing plans (more on that below) and select which architect we will work with. We take tremendous pride in working with the top up-and-coming local talent, although we also work with highly established ‘name brand’ designers in Austin and elsewhere. Playing matchmaker is fun, and surprisingly simple thanks to the earlier steps we have already performed. These steps usually take about 2 weeks also.

Next is the design phase, where we are intimately involved but really let our architects do their thing.  We always let the experts do what they are best at! One important role we play here is what my partner – Judy, who is also my mom! – calls being the ‘Budget Grinch.’ Architects are artists, and while they know plenty about construction and pricing, a builder knows more. Clients? They always want it all –who wouldn’t? – so it is our job to get them real-time pricing info so they can prioritize and make comprehensive/fully informed decisions. One of the best things about design-build, I always say, is the ability to focus your resources on what matters most to you. We make that happen and have a unique process to avoid the number one pitfall in design-build/custom houses: running over budget. (More on this below, too.)

This phase usually takes about 2-3 months (never rush design—it is the most important phase!). After the design is complete, we permit the project (no mean feat in this town!), prep the site for construction, and tee up the financing all at once. Doing these three items at once helps save some time. This phase usually takes 2 more months.

Next is construction, and we put quality above pace. It should take about 4-6 months to complete our typical build, but this market is so hot and the top vendors and subs we insist on using are so busy, we are now seeing build times more in the 7-8 month range.

The last step is closing and ensuring complete customer satisfaction. Every project is our baby and likely the largest and most important investment our clients have ever made! This step takes a couple more weeks.

In short, design-build the Newcastle way usually takes about one year. We all wish things were faster, but the ends justify the means, and the bonus in a market like this is that as the market appreciates while your home is being built, you are more likely to move in with even more instant equity. Also, since quality is paramount for us, we find our homes prove to be an excellent investment in the longer term, too.

1704 Canterbury, "17oh4" designed by Francois Levy, AIA. The kitchen is the heart of the home, so form and function blend and balance beautifully in our interior spaces. Photo: Chris Diaz
1704 Canterbury, “17oh4” designed by Francois Levy, AIA. The kitchen is the heart of the home, so form and function blend and balance beautifully in our interior spaces. Photo: Chris Diaz

In terms of site selection, what makes a desirable location for a modern home?

To Newcastle, modern means being green. Unfortunately, most of the lots in the urban core in Austin are north-south oriented, which is not optimal for green performance. However, intelligent design can still prevail. We love treed lots even though tree protection, which the City is very serious about, can make things difficult. We turn these challenges into opportunities! We also love lots with good clear southern exposure for solar, as well as lots that have the proper underlying geology for geothermal. Level lots are more affordable to build, so that’s important. And modern to us also means being part of the City’s electric lifestyle, so close-in lots, and especially those with downtown views, are great. Lastly, Austin is an eclectic town, so we prefer sites where there is a mix of old and new architecture—I think these styles being nearby and juxtaposed makes both styles pop more, and is also analogous to what Austin is: a dynamic and diverse place that embraces change as well as its roots.

1300 Canterbury, "Canterbury Square" designed by Clark Richardson Architects. "Modern Farmhouse" Design: a clean, contemporary twist on more traditional architectural style to fit into this old Austin neighborhood between the lake and downtown. Photo: Myra Naylor
1300 Canterbury, “Canterbury Square” designed by Clark Richardson Architects. “Modern Farmhouse” Design: a clean, contemporary twist on more traditional architectural style to fit into this old Austin neighborhood between the lake and downtown. Photo: Myra Naylor

The issue of financing is one that can make a lot of would-be custom home-owners cut and run. How does Newcastle Homes help make the finances of custom home-ownership easy and cost-effective?

This is an astute question, and an area that Newcastle is uniquely adept at. We, too, quickly realized this is perhaps the main issue that prevents people from pursuing design-build, so conquering this hurdle was a key part of our plan to become a single source/one-stop shop for ALL design-build needs.

Most home ownership involves a permanent mortgage. While most people are familiar with that process, it is still tedious and a moving part. Custom design-build involves another loan that must be in place before the project begins. This is a process/product that most people are NOT familiar with, so we made it our job to figure it out for our clients. To do so, we carefully developed coveted relationships with a handful of select regional banks—banks that are not so big that they do not understand the local Austin market and the unique process that is design-build, and banks that are not so big that they treat you like a number and overwhelm you with bureaucracy. However, these banks are also not too small—they are stable and experienced, FDIC insured, and excel at hands-on personal customer service, all while truly getting out in the field with our clients and us to understand the Austin market and each individual project.  These banks also offer permanent mortgages, often at discount if they already provided the construction loan. To give our clients more control, options, and opportunities for savings, we then partnered with a couple choice permanent lenders.

Newcastle handles the construction loan, unlike most design-build operations. We get the construction loan (and sometimes the lot loan if the client or Newcastle does not own the lot already) in OUR name, and then we build that cost (at no mark-up) right into the construction budget, just like we do for any other project cost. This not only saves our clients major time and hassle (we handle the paperwork, the closing, the title policies and insurance, etc.), but it assures them they are getting the best rate (we often get a preferred rate that clients might not be offered directly) and provides two other unique advantages: a lower down payment (most custom builders ask for 20% down, we usually get 5-10%, and sometimes as low as 3%!) and saves them ‘double rent’ (Newcastle makes all construction payments during the construction phase so clients do not have to pay their rent or mortgage AND another monthly payment). So, in sum, Newcastle is uniquely able to save our clients time, hassle, and money when it comes to finance, all while providing unparalleled peace of mind that only comes from single-sourcing with an established professional outfit.  That is a big part of our success and truly makes this process of a million more parts graspable…and more fun!

What are some unique issues that arise in modern construction?

The first thing that comes to mind is HVAC – heating, ventilating, and air-conditioning. Many modern designs do not have the typical attic space that more traditional (gabled) design has, so designing a high-performance HVAC system in a modern home can be tough. We conquer this challenge by involving our HVAC experts and engineers with the architect FAR earlier than most other firms do (or than would be necessary in more traditionally designed homes).

Another challenge is getting the maximum light into your home without making it a greenhouse that is not cool or efficient. For this, we select our sites carefully and only use architects that are expert at passive solar design, using the latest BIM software.

2017 Hamilton, "The Wedge" designed by Studio Momentum. Bold design and voluminous interior spaces are balanced with a compact but highly usable and properly shaded interior 'zen courtyard,' all moments from downtown. Photo: Elena Grey
2017 Hamilton, “The Wedge” designed by Studio Momentum. Bold design and voluminous interior spaces are balanced with a compact but highly usable and properly shaded interior ‘zen courtyard,’ all moments from downtown. Photo: Elena Grey

How do you see your firm and the rise of other design-build firms fitting into the modern space?

People are more informed than they ever have been, and what they do not know they can learn online! When you are smart and informed, you like control. Design-build offers control. People are also more socially and environmentally conscious than ever before, and design-build (when done correctly, as Newcastle does it) also offers maximum performance for YOUR lifestyle. Newcastle specializes in bringing better design and green performance not only to those with 7 digit budgets and 1 acre lots, but to many more of the people that make Austin Austin!

Be sure to check out the two Newcastle Homes properties featured on the Austin Modern Home Tour on Saturday, February 7!

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