The annual estimated value of construction projects in the United States in 2021 was almost $1.6 trillion. Commercial or non-residential construction accounts for more than 60% of the total construction market in the US. While residential, industrial, and heavy civil are obviously important factions in their own right, they are different in several ways from the commercial construction business.
Commercial construction is characterized by the general nature of the facility’s use, such as shopping malls, grocery stores, schools, dental clinics, hospitals, restaurants, retail stores, and commercial offices. The building’s size may range from a few thousand square feet to over a million square feet of usable area and can range from one story to dozens of stories for high-rise construction.
In other words, there are no limits on the scope or range of commercial construction. In this comprehensive post, we are going to discuss what exactly management services are in commercial construction.
Every commercial construction project is a monumental undertaking that requires owners, developers, architects, project managers, laborers, and financial overseers to align on construction progress. Whether you’re looking to renovate a building or develop from scratch, working with a competent construction management firm will ensure that your project is completed on budget, on time, and meets the rigorous demands of the end-user (your tenants).
Your commercial management team will track the progress of the construction project to make sure it remains financially feasible and follows the timeline. This allows the whole team to tweak the strategy in case the costs seem more expensive or the construction company needs more time than the initial forecast.
In the simplest terms, commercial construction management means the management of building non-residential properties such as retail outlets, malls, hospitals, offices, and gyms. Construction managers can plan, coordinate, and execute your next project, be it the renovation of an existing property or a brand new real estate construction project.
For example, here at Corporeal Visions, Inc., our commercial construction management services in the Washington, D.C. area involve coordinating the various subcontractors and overseeing the design and construction of a building. Our job also includes making sure that the project gets completed on time and within budget.
The entire process can be broken down into the following categories:
When it comes to the construction of commercial real estate, it’s always best to work with a company that specializes in commercial properties. They know the unique challenges that come with this type of construction and can ensure the project meets all local and national standards. They can also save you money in the long run thanks to their existing relationships with commercial general contractors and suppliers.
The project manager will work with you to maximize your budget and essentially take the pressure out of your hands. They can take responsibility for several elements of the project and keep it on the right track. Here are some of the ways a commercial construction manager can take the reins:
No two projects are the same in their expectations and budget. A competent project manager knows this and works with the budget to control the costs. They will plan for and estimate the overall costs of all the work you want to do. One more thing reliable commercial project management services do is advise the client on whether their budget is realistic. This estimate should include a timeframe, supply costs, and labor costs.
The quality of the construction almost always impacts future profits, so you need a project manager who can execute strict quality control over every aspect of the construction. Picking a company with a solid and proven reputation can help. Make sure they also meet your local and state regulations regarding property standards so you don’t face any issues in the future.
If you’re looking to hire a construction management company for maintenance, you probably have a very tight deadline. A project manager will not only offer you regular updates and keep the project on track, but also plan and delegate tasks so the construction remains on schedule.
To create and maintain a safe building project, it’s crucial for your contractors to follow the local construction codes. This alone can be a headache – unless you work with professionals who are experienced in exactly this kind of thing. For example, if your commercial building project is in Northern Virginia, hire a commercial construction management company based in Northern Virginia so they are likely aware of all the relevant regulations.
The building owner or business management and project manager need to be on the same page every step of the way. When communication breaks down or isn’t consistent, it can lead to delays and other issues.
A construction contract is a legally binding agreement that outlines what will be built, who will build it, who will be compensated for it, when and how that compensation will get divided, and when the job will be considered complete.
There are a lot of different ways to word commercial construction contracts, but no matter which one you choose, it will need to contain certain information to be legally binding. This includes:
Each sub-industry in the commercial construction field has its own unique take on contracts, which can make discussing the different types of contracts a little challenging. You will find several types of contracts in business for example. But even if the specifics vary, here are the most common contracts in commercial construction that you may come across:
When you have a relatively smaller scope project which is clearly defined, a fixed-price contract might be the go-to option. The payment is a single lump-sum amount, which is paid once the work is completed. The amount covers materials and every subcontractor as well as any unexpected developments.
These contracts detail standard costs for certain units, which could be distinctly measurable metrics (like square feet) or inputs (like materials, labor, and equipment). Unit price contracts are often used by governmental entities and builders, and they are time-consuming to prepare, but they work excellently for small-scale projects.
Sometimes, owners don’t want to stretch the construction process by inviting construction bids. These cases call for a design-build contract, where you use the same firm for the design and build phases so the construction process begins as soon as the design is approved.
This contract is often used when the project is not as structured. It involves charging for only the contractor’s time and materials, making it extremely flexible. If you’re considering potential future expansions, a time-and-materials contract will be a good option.
These contracts are similar to time-and-materials contracts in the sense that they bill the owner for all the costs incurred during construction. But they also include additional charges such as a guaranteed maximum price, a fixed fee, etc.
These contracts treat all parties – owners, contractors, and design teams – as though they are members of a single company. In short, a single contract for design and construction is used, with a shared reward/risk model, waivers of liability between team members, guaranteed costs, and an operating model based on lean principles.
There are important players who are part of every commercial construction project team. Generally speaking, the team consists of architects, engineers, interior designers, construction managers, cost estimators, and contractors (general contractors and sub-contractors).
A general contractor is responsible for executing the project and seeing it to completion. You can say they are the ones responsible for the success or any failures regarding the construction project. They are in charge of overseeing the construction site, equipment, materials, vendors, and subcontractors that work on the building construction projects.
Keep in mind that a commercial construction contractor has different expertise and skillset than a residential one; the former is the only one who knows how to create a structure that adheres to the applicable building codes and serves the intended purpose for years to come.
A commercial construction project manager plans and supervises the various construction processes. They secure building permits, negotiate contracts, and work both onsite and offsite to ensure the entire project team stays on schedule and has sufficient resources at all times. Outstanding managers have in-depth knowledge of construction management as well as health and safety regulations.
Project architects or designers are in charge of the visual appearance of structures and buildings. They work hand-in-hand with engineers to create qualified designs. Their role is to gather all the ideas and information necessary to create a functional space that meets clients’ demands while being code compliant.
Subcontractors are hired to perform specialized tasks like painting, carpeting, electrical work, plumbing, and other significant roles that require experience. They can be businesses or individuals that have the expertise and credentials that are required.
Also known as cost planners, construction estimators are involved in the early stages of a project, usually while competing with other companies. They estimate the price of a project based on specifications and drawings. This estimate includes different items in the project, such as the contractor’s fees, overheads, and general conditions. To get these estimates, they work closely with the client, architect, engineer, and vendors.
Each construction project comes with its own unique challenges that require both tactical expertise and a strategic understanding of everything that comes with designing and building a commercial structure. Here are some of the most common problems that a project might run into:
Going over budget in the construction industry is unfortunately a common phenomenon. It falls on the project manager to establish a realistic expectation for cost overruns and make modifications to manage them. A simple miscalculation, lack of proper oversight, or poor judgment can lead to the collapse of a project. It’s important to factor in elements like labor and resource shortages, environmental considerations, currency exchange, and so on while creating the budget. The project cost can easily get out of hand if not managed closely.
When the goals of the project are not clearly defined, none of the involved parties will be on the same page. Some might say that project completion is always the main goal. But each project also tends to have other objectives that must be outlined, like goals related to the timeline of each phase. Project managers need to be proactive in asking the right questions from the contractor or the client, and make sure everyone agrees upon the goals right from the beginning.
Missed deadlines and scheduling conflicts have a way of creeping up on project managers, which can lead to contractors trying to cut corners to catch up. This can turn into higher costs and even more delays as contractors race to “fix” problems and avoid risking contractual penalties. Project managers should focus on dealing with the different variables that cause delays, and design workflows that help meet the client’s requirements.
Attention to detail, measurable goals, organization, and customer satisfaction are essential elements that determine the success of a commercial building project. To achieve this, our team values communication each step of the way – from the initial needs assessment through the entire construction and inauguration. Call us at 703-909-4193 or contact us online to learn how you can benefit from working with our full-service commercial construction and development team.
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