Factors That Affect Construction Project Management Cost

The U.S. commercial construction industry was worth $115 billion in 2022, continuing its rebound after a significant drop during the 2008 recession.

Since that recession, there have been many challenges facing the industry. According to one source, players in the U.S. commercial construction industry continued to deal with pain points last year, like the rising cost of materials and labor. And those issues were exacerbated by supply chain disruptions, significant inflation, and other factors. One problem with these challenges is that they will drive up the cost of commercial construction projects.

engineers pointing to building on blueprint and using laptop to drawing design building Project in office, construction concept

You’ll want to stay within budget when working on a new commercial construction project. Failing to understand what goes into a project and what factors can drive up costs can have a disastrous domino effect that can easily lead to cost overruns and delays. Continue reading to learn about the many factors that go into new construction projects and what can affect the cost of new construction projects.

What Goes Into New Construction Projects

Many steps go into getting new construction projects out of the starting blocks and across the finish line. The steps to consider include the following:

Phase One: Development and Planning

Find the Right Location

You’ll want to find a suitable location for the ground up construction. The developer you retain to find the right spot will need to consider factors that include the following:

Ensuring the zoning for the area supports the new commercial construction
Ensuring the neighboring infrastructure can accommodate the new structure
Checking to see that the water and sewer lines can accommodate the requirements of the business
Getting environmental testing done to see if the soil at the site is contaminated

Set the Budget

The next step is to set a realistic budget. According to one rule of thumb, it can cost an average of between $15 to $20 per square foot for a new commercial building. But those costs can increase dramatically if things like insulation are needed.

Phase Two: Pre-Design

After the first phase is complete, you’ll need to move to the pre-design part of the project. This is where you figure out the objectives of the new commercial construction project and tally things up to get a good idea of the total expense.

You should hire a business that has general contractors and architects. Everything done in this project phase is to get the various parts of the project lined up. This includes ironing out what the building will look like, getting the right equipment, and determining the costs of each stage of the commercial construction project.

Phase Three: Design

The company you hire to lead the project during the design stage will create detailed drawings and final specs. These documents will also list the anticipated costs of each stage and due dates. Hiring a company with all the contractors and engineers needed to complete the project makes sense. You’ll make your life a lot easier by doing so.

For instance, you’ll need structural, electrical. and mechanical engineers for various stages of the building phase. Suppose the new commercial construction project will include three or more stories. In that case, you’ll also need a threshold inspector at various stages of the construction process. Working with a service provider that can complete the project means you won’t have to search for multiple contractors.

Phase Four: Pre-Construction

This phase might test your patience, but it’s necessary if you want the new commercial building project to be successful. You must do the following:

Get the building permit
Secure necessary insurance
Talk to vendors to see which ones offer the best prices
Put together your construction team including the project manager, contract administrator, superintendent, and field engineer
Procure services and materials required to get started

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Phase Five: Construction

The construction phase includes working on site preparation, the foundation, the interior, the framing, the roofing, the HVAC, the siding, the exterior, and the landscaping.

Phase Six: Post-Construction

After the new commercial construction project is completed, the next step is for the contractor and the client to jointly conduct a visual inspection of the building to identify any things that need to be addressed. Once everything is corrected, the project can officially conclude.

What Can Affect Commercial Construction Costs?

Many things can impact the cost of a new commercial construction project. You’ll learn more about these factors below.

Pre-Construction Expenses

Costs are associated with creating the design, choosing the materials, approving the layout, and more. Your decisions on these vital points will impact the costs of a new commercial construction project.

Labor Expenses

Much of your commercial construction project management budget will be allocated to labor expenses. If the project is a large-scale one where more skilled labor is required than is usually the case, the expenses can add up fast. You can help to keep down costs by reducing the project’s complexity.

Building Materials

Another factor that can affect the cost of a new construction project is the cost of building materials. What types of materials will you need? How much will you require? Ensure you price everything out so that you figure out if you can stay within budget.

Permits

You’ll likely need to secure several permits before starting the project. While not an extreme expense, they will nonetheless add to the cost of the new commercial construction project.

Changes in Scope

Changes in scope can have a big impact on the cost of a project. That’s especially the case if the scope creep occurs when the project is well underway. In such cases, the cost will likely skyrocket, and the project completion deadline will have to be extended.

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Are you worried about the cost to build a commercial building? Are you looking for a reputable provider of construction services to help you with a project? We deliver the commercial construction services of a national company with a family-run business mentality. So, we’ll go the extra mile to ensure that the deliverable is precisely what you want at a price you can afford.

When you transform a plot of land into a brand-new commercial space for your operations, you need a reputable and experienced construction project management company in your corner. A hundred big and little things can go south, and any one of them can derail your project. Are you interested in learning more? Do you wish to book a consultation? Get in touch for the help you need.