Project X (not mine, but in the office)
Higher end condos, not cookie cutter, actually pretty sweet looking, needs thought, careful material selection and detailing by the architect.
S.F. = 12,600
Estimated construction cost: $150/s.f. or $1.9 mil
Estimated total sale price: $380/s.f. or $4.8 mil
Architect's net fee: $34k, or 1.8%
Likelihood of "eating it" on the fee: 100%
Realtor's estimated commision, 6% of sale price: $288,000
Developer has 2.9 million left to cover overhead, soft costs, realtor, marketing, reimburseables, etc.
Architect's cost of "getting in good with the developer?" Priceless.
the client thinks he can do it for $100 a s.f., principal estimates $150/s.f. Could be $200/s.f. Maybe the client has a few contractors that are willing to take a loss on his project too? I don't know.
Want me to rerun the numbers with $200/s.f., vado? Here: Architect's % gets flatter at 1.3%, developer's leftover cash = $2.3 mil
Strawbeary! That just simply stinks. I think you are ready for a new opportunity. Perhaps you should work for a developer for a little while....they apparently are making plenty of money.
That architectural fee seems absurdly low, even by normal architectural fee standards. Somewhere around 4-5% would seem more typical, maybe even higher if it's a high-end project.
10-17%?? that sounds really high... and $150/sf is mid-low and def. not high end at least by los angeles standards. where's this project located?
insurance will depend on the fire rating/occupancy for the condos... high rise are the most susceptible to litigation so that's where the reputation for insane insurance rates comes from. mostly because lawyers stand to gain the most for a suit that applies to a greater # of ppl so most smaller condo projects aren't as desirable to chase for post-occupancy litigation.
A firm I worked at did "high end" condos in LA for $100/sf range construction costs. It wasn't easy... but it worked, and they were quite nice and sold for $350-380/sf. You have probably have seen these projects published.
It's not very realistic, but it's not impossible. If the planets are aligned properly.
This is the same reason I quite my job and am looking at development myslef.
Don't even get me started on real estate agents. Everybody bitches about lawyers but at least lawyers provide a valuable service. Real estate is straight up rakeetering, they're selling you a solution to the problem they created (Ever try to buy a house without an buying agent? It don't fly, you have to be VERY firm with them, I found out, wont let it happen again.). Makes me want to join the department of justice so I can go after the National Association of Realtors.
At the very least it IS price fixing and an Antitrust violation.
umm, I'm designing a vacation house in Belize right now as a student and my partner and I are at least getting a decent percentage (for our level of work) out of it. I hope you guys are gonna get more return business out of this and this project is a low-ball to get in good with the developer.
The market rate High-Rise Condos in the South Loop, etc cost no more than 150/SF to build, and currently (not like they used to) sell for 350/SF...
Many of these sites were acquired from the city for almost nothing (Some as low as 10K) So Sad.
Construction costs don't include land. It's to many variables when you lump all that stuff togeather which is why our fees and land and everything else is seperated out so you can get a little closer to comparing apples to apples.
$150/ S.Ft. is still low guys - thats bulk housing numbers. We were doing 180-210 in the upper middle class range for home additions a couple years back. We did drive by estimates for kitchens and baths at $240-275/ S.Ft.
Sep 18, 07 9:20 am ·
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Fun with numbers over lunch hour
Project X (not mine, but in the office)
Higher end condos, not cookie cutter, actually pretty sweet looking, needs thought, careful material selection and detailing by the architect.
S.F. = 12,600
Estimated construction cost: $150/s.f. or $1.9 mil
Estimated total sale price: $380/s.f. or $4.8 mil
Architect's net fee: $34k, or 1.8%
Likelihood of "eating it" on the fee: 100%
Realtor's estimated commision, 6% of sale price: $288,000
Developer has 2.9 million left to cover overhead, soft costs, realtor, marketing, reimburseables, etc.
Architect's cost of "getting in good with the developer?" Priceless.
Maybe my calculator needs new batteries...
150 s.f. higher end???not in my design neighborhood.
the client thinks he can do it for $100 a s.f., principal estimates $150/s.f. Could be $200/s.f. Maybe the client has a few contractors that are willing to take a loss on his project too? I don't know.
Want me to rerun the numbers with $200/s.f., vado? Here: Architect's % gets flatter at 1.3%, developer's leftover cash = $2.3 mil
the fact that the real estate agent is making 10x what the architect is and he or she has to assume no professional liability is great
here's my lunch numbers...two martinis
I should be fired for posting this on the web. Please?
Strawbeary! That just simply stinks. I think you are ready for a new opportunity. Perhaps you should work for a developer for a little while....they apparently are making plenty of money.
done...get your dilbert mug and get the hell out
Wait, here's another. Cost to employer for SB to surf the web the rest of the afternoon? A bargain at $223.85!
That architectural fee seems absurdly low, even by normal architectural fee standards. Somewhere around 4-5% would seem more typical, maybe even higher if it's a high-end project.
or you could record it as admin time.
1.8%? That does sound very low. Who worked out that proposal?
Arch. fee should be in the 10% to 17% of the construction costs, depending on budget, scope of services, etc...
And it's condos, right? Aren't architects' insurance liability rates for condos exorbitantly high?
not to mention you have to figure things out like where to put the fire walls.
10-17%?? that sounds really high... and $150/sf is mid-low and def. not high end at least by los angeles standards. where's this project located?
insurance will depend on the fire rating/occupancy for the condos... high rise are the most susceptible to litigation so that's where the reputation for insane insurance rates comes from. mostly because lawyers stand to gain the most for a suit that applies to a greater # of ppl so most smaller condo projects aren't as desirable to chase for post-occupancy litigation.
A firm I worked at did "high end" condos in LA for $100/sf range construction costs. It wasn't easy... but it worked, and they were quite nice and sold for $350-380/sf. You have probably have seen these projects published.
It's not very realistic, but it's not impossible. If the planets are aligned properly.
This is the same reason I quite my job and am looking at development myslef.
Don't even get me started on real estate agents. Everybody bitches about lawyers but at least lawyers provide a valuable service. Real estate is straight up rakeetering, they're selling you a solution to the problem they created (Ever try to buy a house without an buying agent? It don't fly, you have to be VERY firm with them, I found out, wont let it happen again.). Makes me want to join the department of justice so I can go after the National Association of Realtors.
At the very least it IS price fixing and an Antitrust violation.
Ok I'm calm....
umm, I'm designing a vacation house in Belize right now as a student and my partner and I are at least getting a decent percentage (for our level of work) out of it. I hope you guys are gonna get more return business out of this and this project is a low-ball to get in good with the developer.
the construction cost is $150/sq.ft I assume that doesnt include cost of land?
The market rate High-Rise Condos in the South Loop, etc cost no more than 150/SF to build, and currently (not like they used to) sell for 350/SF...
Many of these sites were acquired from the city for almost nothing (Some as low as 10K) So Sad.
Construction costs don't include land. It's to many variables when you lump all that stuff togeather which is why our fees and land and everything else is seperated out so you can get a little closer to comparing apples to apples.
impalajunkie - I AM missing the cost of the land in my above figures, yes.
Pocz - your forgeting the eastern euro/ greek / Irish mafia connection
$150/ S.Ft. is still low guys - thats bulk housing numbers. We were doing 180-210 in the upper middle class range for home additions a couple years back. We did drive by estimates for kitchens and baths at $240-275/ S.Ft.
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