Cost Estimating Practices for Construction Projects

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Accurately forecasting the cost of future projects is a key service that we provide, and a vital one to the survival of any business contemplating a future construction project. Cost estimating involves developing the cost information that business owners, professional design team members and construction contractors need in order to make budgetary and feasibility determinations. Often times, business owners go through cost estimating exercises to determine the scope of the project, or whether the project should proceed at all.

 

As with any of our projects, it is important for us to first understand the owner’s overall goals, the desired schedule and the target budget. From there, an order of magnitude is typically created. The order of magnitude facilitates budgetary and feasibility determinations by taking historical information in order to create a project budget. Project specific adjustments are made to give all parties a preliminary look at the projected budget.

 

The remaining cost estimating exercises involve every effort to understand all of the potential project costs.  This includes all hard costs, or all costs associated with the physical construction of the building, the total costs for FF&E, all soft costs, or costs not directly related to construction expenses, costs for security, IT and AV equipment, signage and branding fees, costs associated with the lease, professional fees, an adequate contingency and more. Throughout this process, it is common for us to be estimating costs for different project scenarios, different buildings, different size requirements, alternative design scopes, etc.

 

Cost estimating services provide a detailed picture of project costs. Depending on the project and the client, we break out the cost per square foot, the cost per room (and room type), and the cost of several scenarios from different buildings to different design schemes to different finishes and more. These practices can be invaluable to clients who are weighing their options. Cost estimating empowers our clients to go into each project with eyes wide open and a full understanding of what it will take to achieve a successful outcome.

Katie Craven
Katie Craven is Marketing, Communication and Brand Manager at Watchdog Real Estate Project Managers, a real-estate consulting firm that provides owner’s representation and project management services. More about Watchdog Real Estate Project Managers as well as additional blog posts can be found here.
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