LEASEHOLD IMPROVEMENTS AND …...In the Calgary marketplace, we recommend: • Working with...
Transcript of LEASEHOLD IMPROVEMENTS AND …...In the Calgary marketplace, we recommend: • Working with...
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LEASEHOLD IMPROVEMENTS AND
CONSTRUCTION COSTS IN TODAY’S MARKET:
Current Issues and Management Challenges in
a Greening Market
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Today’s Discussion
• Market Influences
•Being Ready on Time
• Managing Construction Costs
• Delivery Dates
• Penalties
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Market InfluencesRising Costs
• Leasing Costs- Less multi-floor contiguous space
- Base Building: rising taxes and fuel costs - higher density space
- Extreme growth
- Staff attraction and retention
- Construction costs remain at 2007 levels
• Technology change every 6 months – i.e. wireless
• Churn rates 100%
• Reduced credit = volatile marketplace
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Building Search / Feasibility Planning
• Preliminary space planning, often of several buildings
• LEED Certified buildings – LEED CI Commercial Interiors
Being Ready on Time Managing Construction Costs Delivery Dates
- 10,000 sq. ft. requires approximately 4 days for planning
- 20,000 sq. ft. requires approximately 1 to 1 ½ weeks for planning
- 60,000 sq. ft. requires approximately 1 ½ weeks for planning
- 120,000 sq. ft. requires approximately 2 weeks for planning
• Schedule:
• The more lead time you have the better the costs and schedule are controlled
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Building Search / Feasibility Planning
High Level Generic Preliminary Budget Pricing
• Existing Buildings- Level of existing finishes and architectural
detailing have a significant affect on the bottom line
- 13,000 sq. ft. comparison is $60,000 different
• New Buildings- Building Efficiency:
Building A - 127,000 sq. ft.Building B - 147,000 sq. ft.
Being Ready on Time Managing Construction Costs Delivery Dates
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ProgrammingBase Building Delivery• New buildings under construction:
- no elevators:schedule extensionhigher costs access to complete space
- loading dock not accessible
- base building occupancy permit
- no phone service
- no air conditioning or cannot be balanced
Being Ready on Time Managing Construction Costs Delivery Dates
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Programming• Construction Managers
- Experience in buildings you are considering- Over 15 years in the Calgary marketplace; loyalty from the subtrades- Has experience with LEED projects
• Landlord work to be completed by the Landlord- Incorporate electrical and mechanical systems and interconnecting stair
openings based on a Tenant’s plan layout = significant savings in construction costs
Being Ready on Time Managing Construction Costs Delivery Dates
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Detailed Planning
• Identify types of planning expectations
• Open planning is typically less construction cost
Being Ready on Time Managing Construction Costs Delivery Dates
- 10,000 sq. ft. requires approximately 2 weeks for planning
- 20,000 sq. ft. requires approximately 3 weeks for planning
- 60,000 sq. ft. requires approximately 4 weeks for planning
- 120,000 sq. ft. requires approximately 5 weeks for planning
• Schedule:
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Modular Planning
Law Firm, Downtown Calgary
• Modular planning = future flexibility = lower renovation / reconfiguration costs
Being Ready on Time Managing Construction Costs Delivery Dates
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Design DevelopmentSustainability
• Materials should be analyzed for their lifecycle, not just initial cost
• Materials need to be:- durable over a long period of time- made from recycled material- recyclable- reused on site- designs need to use less new materials = reduced cost
Being Ready on Time Managing Construction Costs Delivery Dates
• Professional fees on a 127,000 sq. ft. project = $1.00 sq. ft. for interior design fees
Most Sustainable Materials have little or NO cost increase
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Design Development• Pre-ordering of long delivery
items
Being Ready on Time Managing Construction Costs Delivery Dates
- 10,000 sq. ft. project start 6 to 8 months prior to move-in
- 20,000 sq. ft. project start 9 months prior to move-in
- 60,000 sq. ft. project start 1 year prior to move-in
- 120,000 sq. ft. project start 2 years prior to move-in
• Schedule:
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Design Development• Shortage of materials:
- drywall vs. moveable wall systems - less credit = manufacturers carry less inventory = longer delivery time- less credit = risk of manufacturer closing, plan B and C alternative materials
• Shortage of labour:- millwork – 6 weeks manufacturing time- modular kitchens - less time to manufacture- systems furniture instead of millwork – less time and less expensive- modular walls, doors, hardware and glass are being used for wall construction
or office fronts to reduce costs and installation time
Being Ready on Time Managing Construction Costs Delivery Dates
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Contract Documentation /Working Drawings
• Construction employees in training
• The tighter the drawings, the more controlled the cost of construction
Being Ready on Time Managing Construction Costs Delivery Dates
- 10,000 sq. ft. requires approximately 3 weeks for Working Drawings
- 20,000 sq. ft. requires approximately 3 weeks for Working Drawings
- 60,000 sq. ft. requires approximately 4 weeks for Working Drawings
- 120,000 sq. ft. requires approximately 8 to 10 weeks for Working Drawings
• Schedule:
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Building Permits
• Process ranges from 5 to 7 weeks
• If no permit is posted, the job site can be shut down, resulting in the schedule being compromised
• Fines add cost to the project
Being Ready on Time Managing Construction Costs Delivery Dates
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Tender / Final PricingIn the Calgary marketplace, we recommend:
• Working with construction managers to ensure quality, cost control and meeting of schedules
• Using the industry standard stipulated price CCDC 2 2008 contract
Being Ready on Time Managing Construction Costs Delivery Dates
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Tender / Final PricingCost per square foot in the Calgary marketplace:
New Construction
Basic space: $80.00 per sq. ft.
Being Ready on Time Managing Construction Costs Delivery Dates
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Tender / Final PricingCost per square foot in the Calgary marketplace:
New Construction
More typical: $100.00 to $120.00 per sq. ft.
Being Ready on Time Managing Construction Costs Delivery Dates
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Tender / Final PricingCost per square foot in the Calgary marketplace:
New Construction
High-end: up to $200.00 per sq. ft.
Being Ready on Time Managing Construction Costs Delivery Dates
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Tender / Final PricingCost per square foot in the Calgary marketplace:
Renovation
Depending on the quality of the existing space, pricing can range from
$40.00 per sq. ft. to $80.00 per sq. ft.
Being Ready on Time Managing Construction Costs Delivery Dates
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Construction / Field Review
New Construction
Renovations
- 10,000 sq. ft. one floor – 8 to 10 weeks
- 20,000 sq. ft. one floor – ranging from 10 to 12 weeks
- 60,000 sq. ft. three floors – 16 to 20 weeks
- 120,000 sq. ft. – 8 to 10 months depending on the extent of architectural detailing
- Similar to new full floor construction depending on the extent of the work
- Up to 30% more time required if the space is occupied
Being Ready on Time Managing Construction Costs Delivery Dates
• Schedule:
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Contract Administration / Cost Control
• Get everything in writing!
• Document daily materials being shipped, stored in warehouses delivered to site and installed on site
• Penalties / Bonuses
• Furniture Installation:
Being Ready on Time Managing Construction Costs Delivery Dates
- 10,000 sq. ft. one floor – 3 to 4 days
- 20,000 sq. ft. one floor – ranging from 5 to 7 days
- 60,000 sq. ft. three floors – 3 weeks
- 120,000 sq. ft. – 6 weeks depending on the extent of systems furniture
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• Follow instructions in maintenance manuals to ensure the warranty does not become void
Project Closeout
• Establish yearly service agreement for equipment. i.e., air conditioners
• One-year warranty walkthrough
Being Ready on Time Managing Construction Costs Delivery Dates
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Schedule Summary
- 10,000 sq. ft. project approximately 3 to 4 months to complete
- 20,000 sq. ft. project approximately 6 to 7 months to complete
- 60,000 sq. ft. project approximately 7 to 8 months to complete
- 120,000 sq. ft. project approximately 1 year to 1.5 years to complete
Being Ready on Time Managing Construction Costs Delivery Dates
• Lease Negotiations / Design Process through to Furniture Installation
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Benefits of Using an Interior Design Consultant
• Cost control and savings• Market knowledge / benchmarking
/ future trends• Experience and strength in
accurate scheduling• Have long-term relationships with
Construction Managers and subtrades
• Client can focus on their core business
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SHAPING THE WAY
YOU WORKONE SQUARE FOOT AT A TIME
DISCUSSION