office interior layout design guide
when planning your office build out, one of the most frustrating things is putting together apreliminary project budget. here at aquila commercial we put together hundredsof these every year. my name is dustin hogzett, and i'm a project managerhere at aquila commercial. in this video we're going to go over some of the major categories
that goes into puttingtogether your project budget. some of the major categories that will go into yourproject budget will include hard costs, soft costs, vendor costs, contingency allowance, and project management fee. (upbeat music)
hard costs are going to be between anywhere from 75% to 85%of your project budget. they're always goingto be the largest piece because they actually include the physical construction of the space. they're going to include things such as mechanical, electrical, plumbing,
paint, carpet, drywall, framing. hard costs can be one ofthe most difficult things to budget for because they'regoing to be dependent upon the size of the project, and quality of finishes. so,
your tenant improvement allowance should always cover hard costs. it just depends on if you have enough tenant improve allowance to cover, not only all the hard costs, but any other associatedcosts with the project, such as soft costs or vendor costs. the level of finishes can also determine how much a project will cost.
and if you t.i. allowance will cover that. soft costs are one of the things that also need to be includedin the project budget. some of the basic things that are typicallyincluded in soft costs is architectual fees, engineering fees, tas ada review, permit expediting,
and reimbursables. those are all things that can be covered by the t.i. allowance, as long as it fitswithin the t.i allowance. soft costs are typically easierto estimate than hard costs. vendor costs are typically thethings that the client needs, besides just the physical construction of their office space, or the production of theconstruction drawings.
vendor costs typicallymake up between 5% and 10% of the total project budget. they include things such as furniture, cabling, security, moving, and signage. these things sometimes can be covered
by the tenant improvement allowance, but most times they're not. typically it's because there's not enough tenant improvementallowance to cover these. sometimes there is but, specifically within thework letter and the lease, it would state if anyvendor costs can be added, included as part of thetenant improvement allowance. similar to hard costs,
vendor cost are very project specific. when putting together a project budget you should always carry a contingency. contingency should run between 5% and 10% it would cover things such as scope creep, and unforeseen conditions. scope creep is items thatweren't originally planned for in the budget, and that get added to,
at a later time. those are things that thecontingency would normally cover. it kind of protects you on the back end. because there's alwaysgoing to be changes. one of the final things you should do, when putting together your project budget, is include a project management fee. this fee typicallyranges between 3% and 5% of total project costs.
that 3% to 5% basically takes the whole project processoff of your plate. one thing that a lot of people say is: "i've done this before. "i have experience in this. "i built my home. "i helped, "at another firm, "renovate our office space."
and, one of the things that ialways say to people is, spending 3% to 5% on a project manager is going to save you probablytwo to three times that at the end of the day. not only are they bringing the experience, but they're helping you with your budget, your schedule, and the quality of your project.
spending that money is goingto be one of the best decisions that you make. your project budget breaksup into five categories. hard costs can runanywhere between 75%-80%. soft costs can run anywhere from 8%-12%. vendor costs can run anywhere from 5%-10%. pm fee anywhere from 3%-5%. and contingencies, roughly 10%.
for more informationon how to put together a detailed project budget, check out the full article on our blog. need help getting started? click the link below, and download our free office build out budget template today. and remember, no-one knows austin better than aquila.
patrick morrison here, from aquila commercial. and if you liked that video, make sure to hit that like button. and click here to learn a lot more about commercial real estate, and click here to subscribe, and never miss one of our weekly videos.