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26 Cards in this Set

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Base cost
a cost from a cost manual that represents the average cost of a particular building before adjusting
Benchmark building
the average building represented by a base cost
Comparative-unit method
the least accurate method to estimate cost based upon size times square foot, cubic foot, linear foot, etc.
Cost index
a table or index showing cost changes over time; typically a base year represents either 100 or 1 and changes over time are from that base year
Cost-index trending
bringing an old cost current by multiplying old cost x current cost index divided by historical index
Developer's fee
return for time, energy, experience, risk the developer takes; equivalent to salary to developer
Direct costs
also called hard costs, generally labor, materials, & contractor's profit
Entrepreneurial incentive & profit
projected return to attract capital of developer (incentive), amount expected in profit to build (profit)
Gross building area (GBA)
total floor area, measured from exterior, excluding unenclosed areas
Gross leasable area (GLA)
used for retail; total area for occupancy & use, incudes basements & mezzanines, measured from outside of exterior walls & middle of adjoining walls
Indirect costs
also called soft costs, includes financing fees, lease up costs, professional fees, permits, etc.
Net rentable area (NRA)
the area that may be leased in a building. It is measured differently for different property types
Project profit
sale price minus cost
Quantity survey method
the most detailed cost estimating method; all components of a building are estimated separately. It is the most accurate, but most time consuming & expensive method.
Replacement cost
cost to build same functional utility at current workmanship materials
Reproduction cost
cost to build a duplicate
Segregated cost method
also unit-in-place method to determine improvement cost
Unit-in-place method
a method to estimate cost where building components are estimated, such as foundation, framing, roof, interior, HVAC, etc., then added together; more accurate than comparative unit, less accurate than quantity survey
Cost-estimating methods
1. Comparative-unit method
2. Unit-in-place method
3. Quantity survey method
Direct costs
building permits
materials, products, & equipment
labor used in construction
equipment used in construction
security during construction
contractor's shack & temporary fencing
material storage facilities
power line installation & utility costs
contractor's profit & overhead, including job supervision; worker's compensation; and fire liability, and unemployment insurance
performance bonds
Indirect costs
architectural & engineering fees for plans, surveys, and environmental studies
appraisal, consulting, accounting, and legal fees
cost of carrying (in land) and contract payments during construction
all-risk insurance and ad valorem taxes
cost of carrying after construction, but before stabilized occ. is achieved
supplemental capital investment in tenant improvements or leasing commissions
marketing, sales commissions, or title transfers
administrative expenses of the developer
Entrepreneurial incentive
the amount an entrepreneur expects to receive (this is an expectation)
Entrepreneurial profit
market value minus cost exclusive of profit (this is a subtraction)
Developer's fee
is distinct from entrepreneurial incentive, is the compensation for overall management, as if on salary. It may be an indirect cost
Project profit
difference between total cost & market value
Cost-index trending
New cost = New index / old index x old cost