Ready to start a new commercial construction project? Maybe you are a Connecticut township, and you realize the police and fire station have outgrown their shared space, and it’s time to relocate the fire station to a new location. Or do you believe there is a need for family-friendly affordable apartments with retail space in a specific locale due to a changing demographic in that neighborhood?
Do you hire the construction company or the architect first?
Is finding the funding or analyzing market forecasts the most basic preliminary steps?
Is a professional construction management firm a frivolous expense or a wise investment?
Commercial building construction is not an easy feat.
The process can be overwhelming, and the challenges along the way can be unexpected and costly. Being prepared can save you time and money and help you anticipate and respond proactively rather than reactively. Having a roadmap with a list of preliminary steps to consider, as well as suggested best practices can help you facilitate the process. The sequence is not a hard and fast rule, but the highlighted steps are important considerations for a successful commercial construction project in 2023.
5 Important Considerations for a Successful Commercial Construction Project
#1: Identify your Geographic Market
If you already own a piece of commercial property, you can skip this step. But if your options are not limited by a piece of land you already own, you may want to start by choosing the geographic market you wish to service.
Market research will help you determine the best location for your product or services based on the needs of the target demographic and the competition within a specified radius. If the market is over-saturated, you may want to explore other geographic markets.
Once you have found the right piece of property at the right price in an area in need of your product or services, it’s time to check the market forecasts. Market forecasts are a reputable way to project future trends, make an educated prediction, explore the long-term impact of your project, and help with revenue planning.
#2: Do your Legal Research
Zoning laws, building codes, and permit restrictions vary by city, county, state, and country. While your architect may be an expert source on zoning, building codes, and permit restrictions, we recommend familiarizing yourself with the legal requirements to proactively avoid the pitfalls.
Understanding zoning laws is a fundamental step in construction planning. The zoning classification provides guidance about land use and specifies what can and cannot be built on a property as well as the construction requirements. Failure to integrate zoning requirements into the planning stage can be expensive.
While zoning focuses on the land, building codes focus on the actual building and provide the minimum requirements for the health, safety, and general welfare of future occupants. These codes regulate how the work should be performed in a physically-safe and environmentally compliant manner to provide ultimate protection from hazards. In the process, they also promote standardization of the actual construction process, the building design, and the compliance process.
Ensuring a resilient and safe building can be a daunting task, even for an experienced professional. But the bottom line is adhering to building codes plays a critical role in the success of a project.
The building permit provides official approval by the local governmental agency for you to proceed with the project. It’s the official okay by the government that you have complied with federal, state, and local zoning laws and land-use ordinances. A lack of permits can trigger fines which can be costly and slow down your construction process. Though the permit application process is not part of the initial legal groundwork, we included the information in this section to trigger a reminder for later.
#3: Create a Budget
Creating a realistic budget is tricky. Prices in recent months have increased dramatically and even if you have worked with construction companies and architects, pulled permits, and paid for building supplies, it is difficult to estimate the actual costs and plan for the unexpected ones.
Reaching out for estimates can be helpful, and researching current market rates for labor, supplies, insurance, taxes, and building materials can give you a basic budget. LaRosa Groups has often been hired at this stage of the pre-planning process because of our expertise in estimating and managing costs and our ability to bring a project in on schedule.
“We always remind our clients last-minute changes can cause both delays and project overruns and suggest adding 5-10% of the total project cost as an allowance to cover unforeseen extra costs,” explained James LaRosa, CEO of LaRosa Groups.
#4: Explore Financing Options
Once you have a basic budget, you can explore financing options. Construction loans are more difficult to obtain than a mortgage, and the application process is more complicated. Investing in commercial property can be a good investment but there are risks involved. That is why it is generally recommended not to use your personal money but to look for a commercial loan.
Commercial construction loans are available from most major banks and lending institutions, including credit unions and the Small Business Administration (SBA). There are also private individuals as well as companies willing to lend money for real estate projects.
#5: Hire an Architect, Engineer, and General Contractor
With the logistics in place, it’s time to hire the architect, engineer, and general contractor. There are many talented and licensed professionals from which to choose. The challenge is not only finding individuals or firms who are a proper fit for your project in terms of budget, timeline, and building requirements but also assembling a team of individuals who can work together.
The team concept is important in a commercial project; it can be super time-consuming for the owner to oversee, communicate and coordinate the team members. A general construction manager may seem like an unnecessary expense. But in the long run, the manager can be your greatest asset, saving you money and bringing your project in on time.
“The LaRosa advantage is that we will not only manage your project and help you develop the budget but also provide you with a preassembled team of construction professionals with outstanding track records,” explained James. “We are excellent communicators, strategic thinkers and provide workable, flexible, and creative solutions. As an award-winning company, we can help with the entire sequence from beginning to end.”
Creating a realistic roadmap and dealing with unforeseen problems such as inclement weather, supply delays, and budget overruns are our areas of expertise. As a professional management company with more than 40 years of experience, we can limit the challenges and increase the chances for your commercial construction success.
Let us help you with your next project. Schedule your free consultation today.
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