Do I need an Owner's Representative?

1.    Feasibility Study / Due Diligence / Permitting -       “Is there someone (with experience in construction) who can create the pro-forma for my project and see it through to completion?” -       “What is the best infrastructure system for my building site site?”   2.    Cost Estimating and Monitoring -       “I want the best value, not necessarily the lowest bid – who can give me the options?” -       “What is the real cost of construction?” -       “Who will qualify and evaluate all bids?”   3.    Buyout and procurement -       “Is there someone who can buy materials for me at cost?” -       “Who will qualify (quality and price) the subcontractors th ... Read the rest of entry »

Ups and downs continue for residential construction

Signs of strengthening conditions in the housing industry emerged in the final months of 2010. November's new-home construction and sales data released by the U.S. Census Bureau—while a mixed bag of declines and increases—were mostly positive, reflecting on-going economic volatility within the broader recovery along with housing's slow return to health. Existing-home sales and pending home sales also increased, according to the National Association of Realtors (NAR). Overall residential construction permits and completions declined in November by 4 percent and 14.1 percent, respectively, while overall housing starts increased by 3.9 percent to a seasonally adjusted annual rate of 444,000. Single-family permits rose by 3.0 percent, and starts of single-family residences jumped by 6.9 percent to a rate of 465,000. Completions of single-family homes dropped by 10 percent, however, to a rate of 436,000. New single-family home sales rose 5.5 percent in November to a rate of 290,000, but this is sti ... Read the rest of entry »

Construction costs down 15% - 25%

Times have been tough for homebuilders these days. Sales have fallen to their lowest level in decades. And the buzz of saws and staccato beat of hammers are sounds seldom heard as production rates drop to lows not seen since World War II. But developers are benefitting from a little reported side-effect to the housing slump: It's cheaper now to build a home. Builders say construction costs are down 15 to 25 percent. That translates into an average cost of $100,000 to $140,000 for just the "sticks and bricks" (without land) for a modest, 2,000-square-foot house. That same house cost $140,000 to $190,000 to build during the peak of the housing boom just four years ago. Builders from Fort Worth's D.R. Horton to Arizona's Meritage Homes and Newport Beach's William Lyon Homes have crowed in recent earnings reports about improved profit margins due to construction cost savings. The savings could benefit consumers as well when passed on through lower prices, some industry officials say. But the news isn't so ... Read the rest of entry »

Inventory of homes for sale shrinks for first time since January

After rising for nine straight months, the number of homes listed for sale fell for the first time in October across many U.S. markets. The supply of homes available for sale in 26 major metropolitan areas fell by an average 3.3% last month compared to the previous month, the first month-over-month decline since January, according to figures compiled by ZipRealty Inc., a real-estate brokerage firm based in Emeryville, Calif. Inventory fell on a monthly basis in 22 of those markets. The figures include all single-family homes, condominiums and townhouses listed on local multiple-listing services in markets where the firm operates. Nationally, inventories typically increase in October as sellers make one last push before the seasonal downturn in sales hits. Zelman & Associates, a research firm, says October listings have typically increased by 0.8% from September over the past 28 years. Compared to one year ago, the October inventory in the 26 markets covered by ZipRealty was up 13%. Home sales have bee ... Read the rest of entry »

Did your contractor skip town with your $

When a project is in trouble, usually an outside party is brought in because the problems on the project are bigger than the current project manager realizes or can handle.  By definition, troubled projects have major problems. These problems sometimes include:
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The Owners Representative explained

In its basic form, the Construction Owners Representative is defined as a qualified third party who provides construction leadership for a defined scope.  As owner’s rep, RMR will work as an agent for the owner to provide consultation and oversight on the project.  The key to as unbiased approach in this position is the real and actual lack of financial gain from any aspect of the project.  To achieve the highest results, we typically have an administrative relationship with the architect/engineer and general contractor (or prime contractors), but a contractual relationship only with our owner client. As owner’s representatives, we provide comprehensive management and coordination of all construction project activities. Our primary goal is to ensure that each member of the owner’s team of specialists collaborates in a manner that serves the owner’s overall interest. We monitor and coordinate the efforts of all members of the project team, enabling the owner to achieve ... Read the rest of entry »

RMR Construction Manager as Agent

Under the standard Construction Manager as Agent delivery program, RMR Group acts as a first party manager to the owner and a third party manager of the construction process.  This delivery method utilizes an open book approach, where owners have access to all of our project documents and are made aware of aesthetic, schedule and cost trade-offs before making program and design decisions.  Owners have the opportunity to be involved at each stage of the process from pre-construction and trade contractor selection through construction and closeout. As a CM as Agent, we are typically brought on board to help with projects where a contractor has not been selected or started the project.  We simply work as a direct arm and agent for the owner to verify and oversee all aspects of the project.  Our clients are primarily from out of town and/or a group of owners looking for a local representative with extensive construction knowledge who can look after and manage scope as well as the full progr ... Read the rest of entry »

The Construction Manager at risk

RMR’s Construction Manager at Risk delivery program is similar to our Agency based program with the added benefit of having the CM completely manage the entire project on-site.  At RMR we promote a non-adversarial management approach, combined with a strong advocacy for the owner’s interests. This process allows a client to select a construction manager based on qualification; make the CM a member of a collaborative project team; centralize responsibility for construction under a single contract; obtain a guaranteed maximum price (GMP) proposal; produce a more manageable, predictable project; save time and money; and reduce risk for the client, the architect and the CM. Unlike the many general contractors acting as construction managers in the industry, RMR believes it is bad practice for a CM to furnish construction labor or do any portion of the construction work while acting as an owner’s representative.  This leads to a perceived and real conflict of interest that undoubt ... Read the rest of entry »

Home buyers want Green

Why is its new “green” product working? Home buyers are attracted to houses that offer energy savings, affordability, and sensible design choices. For the past four years, the nation’s largest study of home design conducted by AVID Ratings confirms this fact. In 2010, the “AVID Home Design Driver Report” was released at the International Builders’ Show and outlined the results of its latest survey. Following the show, the study was reported by Market Watch and MSN, and became a headline news article on Yahoo’s front page, making it one of the most read articles in the U.S. that week. The study surveyed over 11,335 homeowners throughout the U.S. who built a new home in the last nine years or purchased a newly constructed home within that same time period. Since these people lived in a newly constructed home, they had a higher probability of buying new construction again. So, we asked them to rate various home features as “if they were in the market to buy a newl ... Read the rest of entry »

Bidding Transparency

A key ingredient of the competitive bidding process is transparency. Everyone has access to the required scope of work and the budget available to procure that work. Once sealed bids are opened, they become public information. When a bid is accepted for contract award, grounds for selection are stated on the record. Transparency keeps the competitive bidding process honest. It also maintains public confidence in the integrity of the system. When procurement authorities refuse to operate in the open, it should be cause for concern. In a recent California case, a public project owner provided a copy of the low bid to the second low bidder immediately after bid opening, enabling the second low bidder to get the low bid rejected. The low bidder asked to see the second low bidder’s submittal. The owner stalled. The low bidder was eventually provided with the documents, but only after its petition for injunctive relief had been denied. The low bidder then discovered that the second low bidder had t ... Read the rest of entry »