Project Execution - Urban Adaptive Reuse Residential and Retail Project

So let's take a look at budgeting and estimated as regards to our adapter reuse example project. So remember this is where we have retail on the ground floor we have residential units on the upper floor as we've added some units at the top and it's an old manufacturing building, old loft building, and so it has a bunch of very particular issues to it that are about the fact that it's a loft building and so in those early fazes when we're talking about doing a kind of R of P type numbers or early numbers just to be able to put together the contract, we might have a lot of information about comparables, but you know, maybe not.

You know this is one of those things where it's not always clear that, you know, when you're dealing with an older building like this how exactly comparable would it be to another older building? 'Cause often there's a lot of very specific set of issues, you might have environmental problems or something along those lines. So there's all kinds of issues that might come up, but you need to start somewhere and so you would start with square footages and start with comparables and those kinds of things in order to get those early basic numbers just like any project.

And then as you got into SD and then eventually into DD, you would still do kind of an assemblies type understanding so that's where we're thinking about overall systems and how these things go, but it would be more about partitions and that kind of thing and you would have to have very good information at your assembly's database about existing structures, tuck pointing, you know fixing lintels over windows, all of those things that are likely to happen in a project like this, and that you would do it per window and per square footage tuck pointing and all of those things.

So you're still doing that idea of the assemblies, but it's a little different because the adaptive reuse requires a little different way of thinking about these things. The new construction parts obviously would be just like the typical assembly systems.

So as we start thinking about how the budgeting is working we're sort of going through roughly the same way that we were doing with any of the other projects, but there is a couple of key spots here. Remember that the way this project is working is that there's overall developer, and that developer is doing essentially the shell and the core which is to say the sort of big base building, the elevator core, the kind of main mechanical shafts, fixing the exterior of the building, adding the extra space in the roof, making really nice roofs, fixing everything, putting the storefronts in, all of that kind of sort of the base aspects of the building but down the road as tenants come in, especially for the retail, there'll be other design elements that will have to come in specifically for those retail elements.

So there's different pools of money for parts of the contract.

So we might have an overall project budget, so if you kind of just of graphically you think of it. This is the overall dollars for the project. The hard costs for the shell and core you know might be some portion of that then the other hard cost for the retail that maybe specific build out per unit for their residential something like that might be various points along the way. Then we have acquisition and then we have soft costs, right? So that overall project budget is gonna be divided up into a number of different parts because of the nature of the kind of project that it is.

There's gonna be these different things happening that somebody's gonna be paying for. Well, who's paying for what? Who's paying for the retail? Is the developer paying for the retail? Maybe, depends on the situation. That's something that you would wanna make sure you understood, because it would depend on like how much of that information gets into the contract documents, how much of that information is just sort of stub out and for future projects and that kind of thing.

So understanding when you're doing a project like this there's sort of all the normal things are happening, but now we have to deal with the existing building which is always a complication, but beyond that, because it's this mixed use, there are these different pools of money. There's different contracts that are gonna be at play. There's different groupings that have more say over one part than over another. And so you're trying to make sure that your documents are representative of this sort of multifaceted way that this project is gonna play out.

And it's gonna be that at the beginning phases, it's gonna be multifaceted, all the way through construction and then after the occupancy of the building 'cause there's all these different players that have very different expectations and needs. So just kind of keeping the documents clear so that the estimates and budgeting can also be clear would be a key thing to take away from this kind of project.

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