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Working With Architects In Commercial Real Estate

June 19, 2012

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By Rich Vanchina, CCIM, SIOR

As commercial real estate brokers, we are often engaged by developers, investors, and end-users of commercial property to identify sites that they can either redevelop or build new buildings.  And most of the time, this task is much more technical than simply identifying a site large enough to accommodate the desired building in the desired location. 

Part of the broker’s job, as a value-added service, is to make sure that we are not wasting the client’s, or our own time, chasing the wrong deals.  This is why, when we represent clients that want to purchase an existing building to redevelop, or a land site to build new, we advise them to engage an architect early in the process.

Last Friday, we were fortunate to have our friends from Hendon + Huckestein Architects come in to teach the latest installment of the Southpace Learning Series (SLS) on the process of how brokers and architects can work together to effectively serve their clients.

One of the first phases of a typical new construction, or redevelopment project, is the site selection/due diligence phase.  After potential sites are identified, an architect will “test-fit” the sites for alignment with the owner’s outline program.  This adds value to the process by helping the client make a decision on the right site before time is wasted on the sites that are either inferior or just won’t work for their desired project.

Once a potential site is identified, the architect will generate a conceptual budget, which typically falls within 15-25% of the final project cost.  At this early point in the process, it is very important for the client to understand that many unknown variables still exist.  But an architect’s input is an invaluable resource for the broker to use to advise the client on selecting the right site for the desired project.  After an acceptable site is identified it’s time to fine-tune the building details for budget accuracy.

During the conceptual building and site design phase, the architect will develop the site layout and building schemes. Special conditions, such as environmental considerations and required variances that had been unknown variables, are also identified and considered during this phase.  Once these special conditions are determined, the architect can really begin to refine the project budget.

When the project reaches the detailed programming phase, the architect and broker work with the client to specifically define their growth goals and predictions, functional building needs and building ownership strategy.  Once these needs and priorities are identified, it becomes time to add a general contractor to the team and move to the schematic design phase of the project.

When the project reaches the schematic design and design development phases, the team works with the client to develop a building and site strategy.  Once the site plan and building floor plan are established, the team is then able to reconcile the budget by developing a program to narrow the specific building parameters.

The architect will then work with the client to refine the building strategy by advising on all of the remaining design decisions.  Once the all of the design decisions are made, the project budget can be narrowed down to within 10% of actual cost.

Now the architect has enough information to generate the actual construction documents by which the design will be implemented.  When construction documents are completed, the budget should be within 5% of the actual cost, with the exception of any contingencies that have been identified or change orders from the client.

This is the stage where the work for the construction of the building is sent to be bid on or negotiated with general contractors.  The architects’ experience and advice are extremely helpful to the client when determining factors such as bidder qualifications and bid analysis for the project.

Once work has begun, architects can provide a valuable construction administration service to ensure that the construction documents are interpreted as intended and that the contractor is performing per the terms of the contract.

Construction administration services are important to a client in order to monitor technical phases of construction such as the schedule progress, any unforeseen changes to the scope of work and the inspection of the finished project.

Redeveloping an existing building or constructing a new one is a very expensive and time-consuming process for a developer, investor or end user of commercial real estate.  As brokers, our job is to guide our clients through this process in the most timely and cost efficient manner possible, ultimately adding value to the property during the project.

The most important lesson that I learned from Hendon + Huckestein’s presentation was to understand how engaging a good architect early in the process will give the client the greatest chance for a successful project.

Southpace Properties, Inc. is Alabama’s largest independent commercial real estate firm. At Southpace, we add value to the use and ownership of commercial real estate through services such as office, retail, land, warehouse and industrial sales and leasing, tenant and landlord representation, development, consulting, investment sales, property management and construction management. With nine CCIM designees, Southpace has one of the state’s highest number of CCIM accredited brokers under one roof.


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