August 2016 — Retail Properties Quarterly —
Page 17
timing the work. If moving into a
fully occupied retail location, the
renovation to the space will likely
require swing shift or night work to
complete. Working off hours typically
involves up to a 10 percent increase
in labor cost due to staff incentives.
Additionally, the revised layout
for the space could require moving
drainage, water supply and power
locations. If the space is located on
the ground floor, this usually will
require saw cutting the concrete slab
to move the drainage to the new
locations. If able to work with the
existing drainage layout, relocating
water supply and electrical power is
relatively inexpensive.
n
Build-to-suit.
The ability to take a
piece of dirt and build a building is
the American dream. Obviously, the
pinnacle of customization and meet-
ing the exact needs is the allure of
a new building. Outside of the addi-
tional costs of building the founda-
tion and building envelope, I’ll note
some of the most expensive items
that your client should be prepared
to come across.
When I approach a new project,
I see the majority of my risk in the
dirt. It is important to have a solid
understanding of what it takes to
place concrete, set steel and build
walls. But every site has its own
unique challenges.
Before purchasing a plot of land,
engage a civil engineer to complete
a soils test to evaluate what is below
the surface. Expansive clays and
bedrock that is close to grade, a high
water table or hazardous materi-
als below grade can have a drastic
impact on the overall construction
cost.
Consider a very common challenge
in Colorado: expansive clay subgrade.
There are several ways to deal with
expansive clays, but they all pose
financial implications. From install-
ing a deep foundation (caissons or
helical piers) to completely remov-
ing the expansive material and
replacing with structural fill, these
solutions can add tens of thousands
of dollars to a construction project.
Another concern in a ground-up
building is the utility installation.
Granted, nearly every new building
will have water, natural gas, sani-
tary drainage, power and commu-
nications brought from the source
to the building. The question is
whether these service lines already
are stubbed out or if you will have
to tap into them independently. If
building in a commercial area that
is developed to accommodate the
facility, you likely would not have
to tap the main service line. If pro-
ceeding with building a site where
no major commercial development
is underway, you’ll likely have to
tap the main utilities. Check with
the local municipality as to the cost
of tapping utilities; the cost can be
drastic – often tens of thousands of
dollars.
By making educated decisions
throughout the process, you and
your retail clients will succeed in
finding the right space for their
business without breaking the
budget.
s
Broker Insights
Adam Larkey
New builds, such as Matsuhisa in Cherry Creek, can be beneficial for restaurants because there is more flexibility and customization
options available for the locations of the underground drainage before the interior concrete floor slab is placed.
