Analysis of Building Development

Land Purchase or Value

  • Terminating former tenancies cost
  • Growing crops-emblements

Environmental Engineering

  • Hazardous Waste Assessment/Clean-Up
  • Brownfield Credit and protection
  • Wetlands determination and permitting
  • On-Site disposal certification
  • Clean Air Regs
  • Radon
  • Others

Architecture and Engineering (Should your architectural contract include These features?):

  • Design/Build
  • Construction Management
  • Architecture/Contractor
    • Perimeter survey and contours
    • Soil test (initial)
    • Cut and fill supervision
    • Traffic engineering
    • Off-site improvements
      • Street and utility profiles
    • Utility systems
    • Site work: Parking, walks, curbs, building signs
      • Plot plan & Site Plan
      • Structural systems
      • HVAC
      • Plumbing and sprinklers
      • Electrical
      • Working drawings
      • Renderings
      • Shop drawings
      • "As built" drawings
      • Tenant mix drawings
      • Common facility details
    • Supervision
    • Draw certification (See Addendum)
    • Store drawings
      • Skeleton
      • Final
      • Approval of tenants' details
    • Signs -approvals (common area signs and tenants' signs)
    • Interior furnishings
    • Specifications
    • Bid documents
    • Bid supervision
    • Arbitration
    • Travel and other rebate items
    • Parking lot lighting plan and specifications
    • Retaining walls, etc.

Off-Site Work

  • Perimeter landscaping
  • Roads, curb cuts, drive approaches, acceleration lanes
  • Sidewalks
  • Traffic control signs

Utility Systems and Ditches (on-site, off-site)

  • Electric service and transformers
  • Telecom, fiber-optics, TI , Cat lines
  • Storm sewers and drains
  • Irrigation ditches --move or pipe
  • Sanitary sewers or manholes (pumping station?)
  • Water lines
    • Culinary
    • Fire sprinkler loop
    • Lawn sprinkling and watering
    • Fire hydrants
  • Gas lines


  • Insurance special
  • Salvage and hauling
  • Restore to usable soil condition
  • Temporary barricades

On-Site Work

  • Remove trees and top soil
  • Fill, cut, compaction, and grading
  • Fences and perimeter walls
  • Sign: Identification, traffic control, and pylons
  • Curbs, gutters and drains, walkways
  • Road base and surfacing (asphalt)
  • Striping
  • Landscaping
  • Sidewalk around buildings
  • Parking lot lights

Building Construction

  • Shell
  • Tenant spaces, including space planning and occupancy permits
  • Common area
    • malls and common halls
    • Restrooms and community halls
    • Management office
    • Mechanical, electrical, and janitorial rooms
    • Elevators and escalators
    • Common loading docks
    • Garage and incrineration facilities
  • Tenant construction and finish: cost or allowance
  • Tenant fixtures
    • Rough-in
    • Installing
    • Carpeting
  • Furnishings
    • Mall, lobby, or other common area furnishings
    • Carpeting
    • Directories
  • Miscellaneous construction costs
    • Permits municipal fees, utility connection fees, and meters
    • Bonds
    • Completion or performance
    • Subcontractors'
    • Architect's errors and omission
    • Sales or use tax
    • Builder's risk (or other) insurance
    • Change orders
  • Developer's Impact Fees
  • Contractor's "general conditions" (on-site expenses)
    • Job supervision and office and temporary toilets
    • Temporary utilities (meters and bills)
    • Telephone and travel
    • Blueprints and shop drawings
    • Tools and equipment rental; temporary fencing
    • Security during construction
    • Winter protection
    • Snow removal
    • Job clean-up
    • Progress reports
    • Contractor's "home office overhead"
      • licenses and subcontracting
      • accounting and billing
      • employee reports and overhead
    • Other potentially desired items (such as):
    • Showers, jogging trails, picnic tables, kitchen, plumbing, lab plumbing,
    • private bathrooms, potential vending machines, docks, freight/passenger
    • elevators, SMART (full communications), security system, direct metering

SOFT COSTS - fixed vs. variable costs

  • In a build to suit, many of these costs are not incurred. Can you name them?

Interest on Land Loan Until Construction or Opportunity Cost on Cash Land Purchase

Advertising and Promotion

  • Brochures
  • Newspaper ads
  • Media ads: radio, TV, journals, other
  • Flyers to brokers, users, town officials, others
  • Models, plans, aerials
  • Receptions, gifts


  • Land purchase agreements
  • Partnership agreements
  • Work on bank loan
  • Lease development
  • Tenant negotiations
  • Construction/architectural contracts
  • Title and other contracts


  • Financial analysis
  • K-I or partnership forms

Bank Counsel

Bank Appraiser

Other Closing/Administration Costs

Real Estate Taxes Until Lease-up

Liability Insurance on Vacant Land

Terrorism Insurance

Builder's Risk Insurance After Construction

Liability Insurance After Construction

Environmental Warranty Insurance

  • Secured Creditor's Insurance

Title Insurance

Land Loan-Points

Construction Loan-Points

Permanent Loan-Points

Construction Interest (See Addendum)

Lease-up Reserve

Minneapolis Commercial Real Estate - Building development

Developer's Fees

Commission/Leasing Fees

Consulting Fees

Utility Costs After Construction

Operating Costs After Construction

Lien Waivers

Prepayment Penalties

Contingency - or the 3 M's: mistakes, misfortunes, and misrepresentations