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5 Inconspicuous Factors That Can Influence the Cost of a Construction Project

You’re a project owner. You’ve considered all the key cost factors for your prospective commercial project, including building size and material costs. You’ve done research on other projects and buildings similar to yours and think you have a good idea of the cost of your commercial project.

So why is your contractor’s project quote higher than you expected?

Below, we take a deep dive into five inconspicuous factors that can influence the cost of your commercial project. From jurisdictional restrictions to understanding how inflation affects labor and material costs, we cover everything you may not have considered in your original research.

1) Restrictive Covenants

Restrictive covenants, in the simplest terms, are a set of restrictions and obligations placed on the use of a commercial property that must be adhered to by the property’s owner. The purpose of restrictive covenants is to preserve the value and enjoyment of adjacent properties. Checking with your local jurisdiction on all restrictive covenants and planning for these restrictions can help you better estimate your construction project cost.

One key restrictive covenant to pay attention to is the architectural restrictions.

Possible architectural restrictions include limitations and requirements on exterior paint colors, types of siding, fences, landscaping, design of structures, and more. Say, for example, your original plan was to construct the front of your building with architectural metal panels. Although, you later realize the protective covenant in your area requires all building front facades must contain at least 60% masonry. Your commercial project cost just increased because masonry materials will cost more than metal panels.

Landscaping can sometimes be the last thing on your mind when creating your project vision. However, covenants may also require extensive landscaping, which is regularly overlooked in a client’s original construction cost estimate and can be an unexpected expense.

2) Inflation and Supply Chain

A-C-E--Building-Service-Stressed-Supply-ChainIt’s no secret you’ll have to factor in labor and material costs in your commercial construction project. Although, thanks to inflation, nailing down an exact number in a cost estimate can be difficult.

This is particularly true since the COVID-19 pandemic, which wreaked havoc on the global supply chain. Because the construction industry relies on some foreign raw materials and finished goods, lead times for some construction materials reached 12 months or longer during the height of the pandemic. As a result, the supply of materials significantly decreased, leading to an increase in material costs.

While some supply chain issues have stabilized, most material price increases may be here to stay. For example, the price of hot rolled coil steel jumped 200% over a one-year period in 2020/2021. The current price is still roughly 70% higher than pre-pandemic levels, but this is just one material. Textiles, copper, chemicals, and raw materials pricing vary and certainly contribute to current materials and finished goods pricing. If you budgeted a project three years ago, you should expect that construction project cost to be significantly higher today.

Need some expert advice on how you can successfully plan a commercial construction project in a stressed supply chain? Click here!

3) Stormwater Management

Stormwater management is the process of directing stormwater away from hard surfaces like roofs, parking lots, paved surfaces, and other surfaces that are impervious to water. Many states and municipalities have adopted criteria for new developments that require projects to adhere with regulatory standards. While the specific regulations will vary depending on your location, they are aimed at slowing the discharge of stormwater, cleaning up the stormwater, or both.

Why is this noteworthy? The construction of a typical stormwater detention pond for a small to mid-sized commercial development can add up to tens of thousands of dollars in excavation, storm sewer, engineering, and permit fees. Some municipalities have created regional stormwater ponds that were pre-designed for development. In these instances, development projects do not need to construct on-site stormwater treatment areas, potentially saving your project a significant amount of money.

A.C.E. Building Service brings extensive experience to every commercial construction project. We’ll take the time to understand the complete scope of your construction project so that we can estimate and offer the best commercial project cost. Check out our past projects here!

4) Automatic Fire Sprinkler Systems

A commonly overlooked expense is whether or not your project will require an automatic fire sprinkler system. Some clients may be unsure because this requires analysis of code requirements in your area, most often interpreted by a design-build firm or architect.

Whether or not you will be required to install a sprinkler system depends on the type of your building construction, its capacity, and the codes applicable to your area. If your commercial building is in a rural location, a fire protection system may also require a fire pump and holding tank, which will add additional costs to a baseline fire protection system.

While there are some alternatives to a sprinkler system, such as rated walls that separate portions of the building, these alternatives will also come at a cost and should be accounted for. Discuss with your designer any requirements needed for automatic fire sprinkler systems early in the design process. Knowing the threshold for required systems can help determine the size of your building, drive design choices, and give you a better understanding of the commercial project cost.

5) Finishing Touches

bank first two rivers 6When it comes to your commercial building's aesthetic appearance, the choices are almost endless. It is important to have discussions early on with your design/build contractor or design professional so they understand budget requirements along with your vision for the finished appearance. Skipping this step can lead to an expensive price tag and additional time with value engineering or re-design.

If you have your heart set on marble countertops, engineered quartz could be up to 40% less in price and offer a very similar look and appeal. Asphalt may be substituted for concrete, composite siding for masonry, LVT for hard tile, and countless additional options can help keep your overall commercial project cost in check.

At A.C.E. Building Service, we are proud to offer comprehensive design-build contractor services. From project concept and design to construction, our expert team offers complete transparency, so you are never in the dark when it comes to commercial project cost.

A.C.E. Building Service is your single source for all your commercial and industrial needs. We are proud to be an exclusive distributor of the Butler product line in Manitowoc and Sheboygan counties and throughout the rest of Northeast Wisconsin.

With the help of Butler’s pre-engineered metal buildings, we are able to design and execute functional, tasteful, cost-effective, and efficiently constructed buildings.

We have 60 years of experience in commercial construction and guarantee you will be given the most accurate, honest quote for your prospective project.

If you have any questions about factors that may influence the cost of your construction project or about our construction services, we are happy to help. Contact us today! We hope to hear from you soon.

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Written by Chris Herzog

Chris is a graduate of The University of Wisconsin - Platteville where he earned his Bachelor of Science degree in Construction Management. In addition, he is a LEED accredited professional (LEED-AP). He began his career with A.C.E. in 2005 as an estimator/project manager and later held the responsibilities of business development and marketing before assuming the role of President in 2021. In addition to the overall management and leadership of the company, he continues to build relationships with clients, serves at the board level in several community organizations, and ensures that the company's core values are upheld and at the center of every project.