It is, however, vital to note that cost estimating for commercial construction projects may at first glance appear to be an overwhelming exercise but it is very important to get it right before undertaking any new construction project. There are some basic ways through which the total costs can be estimated and it is not that impossible. In this blog post, we’ll explore some tips for estimating commercial construction costs including:
- Purpose: The first step is to establish the project’s scope and requirements.
- If possible try to look at the costs of construction in your area.
- As the name suggests, hard costs include the materials and labor used in the construction of the project While soft costs are all other expenses that are not directly related to the physical construction of the project.
- It is necessary to build in contingencies for unexpected expenses That is always important to have some contingency put aside for emergencies.
- Consult Professionals who have dealt with Commercial Construction Projects.
Assess the Project Requirements & Define The Project Objectives
The first one is to state the extent of the work and the proposal’s requirements for the project. Meet with clients, architects, engineers, and other stakeholders to understand:
- The nature of the building or the facility that is in the construction (office, retail, warehouse, etc.).
- Total square footage
- Number of floors/stories
- Extras such as LEED accreditation, safety systems, emergency power systems
- These costs include construction material costs such as structural steel, masonry, gyp board, floor, etc.
- HVAC systems, elevators, lighting, power, fire alarms, and security systems
- Such as features of the landscape and car parking areas.
The more specific the scope documents are, the better the chances of getting those accurate quotes. Included floor plans and elevations to give contractors insights on fundamental measurements that affect costs, for example, the total length of the exterior wall, number of bathrooms, and type of HVAC system required.
Prospective Construction Estimators must learn to research construction costs in their particular region.
Local construction costs must be monitored as they greatly differ from one region to another, and find out the cost per square foot in your region. Hiring professional contractors, consulting building cost estimators, or using building cost calculators, industry cost research, and RSMeans data can help determine average costs of construction per square for various building types given the local rates of labor and materials.
For instance, an office building within the premises of San Francisco will attract a higher price per square foot than a building in Phoenix. And, construction costs for a Class A high-rise office tower will be significantly different from a simple warehouse. Conduct a literature search to find at least three reports that identify the most suitable cost for your project type and geography.
Consider Other Overhead Expenses Besides the Resources Such as Raw Materials and Workforce
While the direct building construction costs make up a significant portion of the overall budget, don’t overlook other soft costs including:
- Construction-related costs such as architects’ and engineers’ fees.
- Project management costs
- Permitting and impact fees You’ve collected permitting and impact fees for [XXX number] projects, and in every case, you’ve followed established best practices to ensure that this process has been conducted equitably for all involved parties.
- These costs include any fees that had to be paid to secure financing as well as the interest on any loans taken.
- Legal fees
- Utility connection/capacity fees
- Furniture, fixtures, and equipment;
- Contingency reserves
These costs can easily add 20% or more to the total project costs, thus adding significant extra costs to any project. It is also important to note that although soft costs vary greatly by geography, you should not exclude anything from your estimate of them.
The following is a list of contingencies that must be created when developing a marketing plan:
While scoping documents and plan preparations are normally done to ensure a clear understanding of the Construction Estimating Services project, there are always occurrences of additional costs due to matters that cannot be foreseen. Change orders for unforeseen conditions related to:
- This means that the soil in some places is bad and needs additional foundation work.
- Utilities that have not been documented or noted earlier and are now required to be relocated
- Some problems become revealed as soon as the remnants of the previous construction are taken down.
- Fluctuations in the design progress halfway through the project
- Weather delays
- If for example there was vandalism or theft at a site that was being leased out.
By adding contingency reserves of at least 10% in the original estimate of a Construction Estimating Service project, these extra costs are taken care of and your budget does not fall through.
Use the Services of Expert Commercial Contractors
The above steps will give a rough estimate of the cost; however, getting an experienced commercial general contractor to inspect the scope of work you have planned and give a bid is the most effective way of coming up with a cost estimate. This is important because contractors who focus on new construction or remodeling will have experience in the particular kind of commercial property you intend to build or renovate.
Since they will be actively involved in the actual construction management, contractors will possess practical knowledge of the prevailing local labour and material costs. These also come with experience on probable incurrences and other expenses to estimate are in the process. It is advisable to involve a contractor at the early stages of the project as he or she can be involved in matters such as evaluation of the project scope and costs before work begins.
Key Takeaways
Professional cost estimate gathering is a very significant step to start any commercial building project without facing the problem of cost overruns. When providing a comprehensive understanding of its extent, total construction costs as of today in the region, including all the direct and indirect costs, additional allowances for possible contingencies, and working with commercial contractors, a realistic construction budget can be created.
What are the other recommendations that you would give concerning the right commercial construction cost assessment? Please remember to use the comment section below to post your questions and advice!
Conclusion
To estimate the cost of the construction of commercial buildings, one needs to compile some factors concerning the project, location, average price of labour and materials, overhead expenses, and probable risks. However, it is not easy to have a set budget before the start of construction; nonetheless, not having one may lead to unprecedented expenditures. Adhering to the process described in this blog will enable the user to use the key details to arrive at a proper and comprehensive total that will enable the user to complete the estimate for the next commercial building project.
