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Old 12-16-2016, 03:24 PM
 
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First time building a commercial building and getting quotes around $145 to $165 per square feet. Since there will be an engineer/architect, I am curious if I should worry about cost overruns. I owned previously owned commercial buildings but this is the first time I am building one. Any help would be appreciated... it seems it is a downmarket for commercial building in my area...
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Old 12-16-2016, 10:27 PM
 
Location: Johns Creek, GA
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Quote:
Originally Posted by evilnewbie View Post
I am curious if I should worry about cost overruns(?)
Probably. Unless you enjoy getting raked over the coals; or have bottomless pockets and extra long arms!
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Old 12-17-2016, 03:41 PM
 
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The costs per square foot are for Class A buildings, would it be better for Class C buildings?
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Old 12-17-2016, 03:59 PM
 
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Never mind, Class C buildings are just older buildings needing renovations..
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Old 12-19-2016, 01:57 PM
 
Location: Morrisville, NC
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Not knowing the specifics about what level of finishes will be specified, if it includes interior completion or at least electrical and mechanicals and what the total square footage is it's hard to say.

Off the top of my head, I'd say, For a shell only, that's high pretty much no matter what, unless it's a rare building in some weird situation with the lot. Including interior completion that's a good deal and if it's say, everything but the Individual upfits, it seesm ok to me but that's the real gray area. Obviously the smaller the sf, the higher the cost per sf as certain things do no scale linearly with size. Location also has a good amount to do with it.

Your architect should be able to guide you though, that's why you pay them. Make sure they have a good scope of work up front and you use a good contract. Stay with either AIA or have a lawyer draw one up. Don't use the contract from the contractor unless it's just a small change from AIA or it's heavily reviewed by a construction attorney, meaning one that just does that, not a general practitioner that also does it.

You might do well to pay the architect extra for project management services and/or bring in a third party management firm, at least until you've done a couple and are more comfortable. Also, make sure you have a decent geotech firm look at the site. You'll spend way more money at a really bad time in the project if you find hidden stuff underground.

Source: general contractor, project manager/estimator and owners representative for 15 plus years.
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Old 12-20-2016, 03:51 PM
 
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I am going to meet with the developer and he is offering various things like build to suit, per square foot, or flat fee... I am thinking maybe going to a class B building instead of A (anyone know the cost savings for that?)... it will be a finished product on the outside and inside... building a 4000 sq ft, two lvl building... the developer is building other buildings in that plaza using their own architects and such... I thought about getting my own architect but the realtor says it's not worthwhile... they have been in business a long time and typically do larger commercial projects...
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Old 12-20-2016, 08:35 PM
 
4,567 posts, read 9,294,561 times
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Originally Posted by evilnewbie View Post
First time building a commercial building and getting quotes around $145 to $165 per square feet.
They don't sell buildings by the pound, nor do they sell them by the square foot. You need to be educated about what your paying for and what you get.

You don't seem to be knowledgeable about what exactly you're paying for. And because of that you will be taken advantage of.
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Old 12-22-2016, 08:14 AM
 
20,194 posts, read 21,581,650 times
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Quote:
Originally Posted by 399083453 View Post
They don't sell buildings by the pound, nor do they sell them by the square foot. You need to be educated about what your paying for and what you get.

You don't seem to be knowledgeable about what exactly you're paying for. And because of that you will be taken advantage of.
I understand the costs such as site preparation, utility hookups, landscaping, permits, and such and I understand how much each of those could cost. The building is the easy part. I know I will need a site surveyor to tell me a lot of that information. I understand that price per square foot is only an estimate. I may hire an architect to oversee the project and make sure building materials/labor is consistent with what work has been done. I understand to hold back 10% of any payment to make sure the builder finishes anything I see during my inspection. I came here for advice on how not to be taken advantage of, not telling me that I will be (which everyone will be to some degree)... I just found out that Class A and Class B buildings are not much difference in savings (or so they say)... I am looking for insight such as that... I will not be ripped off...
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Old 12-22-2016, 08:28 AM
 
Location: Johns Creek, GA
14,642 posts, read 55,184,296 times
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Why don't you backup abit and disclose what exactly are you wanting.

Now that you have some understanding of "commercial property" designations, are you wanting to build this office bldg (class A, B, or C) as an investment (REIT), a project to sale, or is this a building for a personal/private business? There's several different strategies one can take in each scenario- which one that works is mainly determined by the source of capital.

If it's the latter, you may find that leasing space has better financial stability especially on a long term lease.
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Old 12-22-2016, 07:32 PM
 
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The current plan is to build out a single Class A multi unit building and lease out all the units, with eventual transition to occupy the largest unit for expansion of current business... the problem with leasing space is location, location, location... I am in an area with pretty much zero vacancies and very high rent... I looked into buying/renovating buildings close to this area but for the money, I find it's better to build actually in the area... the only affordable buildings close to the area are located on streets that are a bit "too" busy, don't have good road frontage, and require $$$ renovations... the bank has already offered 100% financing...
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