Chicago Place

Anthony Brown PM592 - Project Cost and Schedule Control Course Project 1 (CP-1) 5/24/2012

Contents
Executive Summary....................................................................................................................................... 3 Project Description........................................................................................................................................ 4 WBS ............................................................................................................................................................... 5 Cost Estimate ................................................................................................................................................ 6 Advanced Cost Estimating Technique ........................................................................................................... 7 Three-Point Estimate ................................................................................................................................ 7 Cost Assumptions.......................................................................................................................................... 8 Financial Analysis .......................................................................................................................................... 9 Schedule ...................................................................................................................................................... 10

Executive Summary
Brown Equity Group franchises multi-unit real estate developments. Our service will be to develop Chicago Place, a 200 unit residential dwelling with the goal to extend long term leases, expand rent growth and maximize cap rate compression over a 5 year plan. Chicago Place is expected costs are $1,517,290.00, over a 18 month duration that could possible gross $1,122,240.00 of potential revenue.

Project Description
This proposal covers the development of one new, large multi-unit property that will bring potential opportunities to buy high quality real estate from distressed sellers at a discount to replacement cost with meaningful upside potential from lease-up, rent growth and maximize cap rate compression. In this plan, the strategy of Chicago Place will be to purchase, construct, maximize rents in each unit thus increasing.

WBS
1 1.1 1.1.1 1.1.2 1.1.3 1.1.4 1.1.5 1.1.6 1.1.7 1.1.8 1.1.9 2 2.1 2.1.1 2.1.1.1 2.1.1.2 2.1.1.3 2.1.1.4 2.1.1.5 2.1.1.6 2.1.1.7 2.1.2 2.1.2.1 2.1.2.2 2.1.2.3 2.1.2.4 2.1.2.5 2.1.2.6 2.1.3 2.1.3.1 2.1.3.2 2.1.3.3 2.1.3.4 2.1.3.5 2.1.3.6 2.1.3.7 2.1.3.8 2.1.4 2.1.4.1 2.1.4.2 2.1.4.3 2.1.4.4 2.1.4.5 2.1.4.6 2.1.4.7 2.1.4.8 2.1.4.9 2.1.5 2.1.5.1 2.1.5.2 2.1.6 2.1.6.1 2.1.6.2 3 Acquisition & Planning Grounds Franchise Fee Purchase Land Hire Architect Review & Approve Blue Prints General Contractor Solicitation Hire General Contractor Submit Blue Prints to City Purchase Permits Order Utilities Construct Building General Contractor Land Excavate Land Prep Footing & Foundation City Inspection - Footing & Foundation Pour Concrete - Footing & Foundation Frame Building Install Floor Sheathing City Inspection - Framing Sub Contractors Roofer - Install Roofing Materials Masonry - Install Chimneys Plumber - Rough-In Plumbing Electrical - Rough-In Electrical HVAC - Rough-In HVAC City Inspection - Sub Contractor Work Exterior Finishes Install Brick Veneer Install Trim Pour Driveway with Black Top Prep Sidewalk City Inspection - Sidewalk Pour Sidewalk with Concrete Landscape City Inspection - Exterior Finishes Interior Finishes Install Windows Install Insulation Install Drywall Prime & Paint Walls Install Interior Trim Finishes and Cabinets Install Other Trim Finishes - Formica, Ceramic Tile, Vinyl Floors Carpet and/or Hardwood Floor Finish City Inspection - Interior Finishes Work Clean Up Site Walk Thru PM, Development Team & Contractor Walk-Thru Stakeholders, PM & Contractor Walk-Thru Administrative Deliver Signed Off City Inspection Reports to PM Submit Final Documentation to Stakeholders Close Project

Cost Estimate
Acquisition & Planning $554,180.00 Grounds $554,180.00 Franchise Fee $250,000.00 Purchase Land $211,400.00 Hire Architect $19,200.00 Review & Approve Blue Prints $25,600.00 General Contractor Solicitation $20,700.00 Hire General Contractor $1,880.00 Submit Blue Prints to City $9,600.00 Purchase Permits $15,320.00 Order Utilities $480.00 Construct Building $963,110.00 General Contractor $963,110.00 Land $242,800.00 Excavate Land $36,800.00 Prep Footing & Foundation $47,000.00 City Inspection - Footing & Foundation $600.00 Pour Concrete - Footing & Foundation $48,600.00 Frame Building $60,200.00 Install Floor Sheathing $49,000.00 City Inspection - Framing $600.00 Sub Contractors $203,240.00 Roofer - Install Roofing Materials $40,600.00 Masonry - Install Chimneys $10,040.00 Plumber - Rough-In Plumbing $39,600.00 Electrical - Rough-In Electrical $59,560.00 HVAC - Rough-In HVAC $53,440.00 City Inspection - Sub Contractor Work $0.00 Exterior Finishes $160,800.00 Install Brick Veneer $53,200.00 Install Trim $10,800.00 Pour Driveway with Black Top $38,600.00 Prep Sidewalk $7,400.00 City Inspection - Sidewalk $600.00 Pour Sidewalk with Concrete $24,200.00 Landscape $25,400.00 City Inspection - Exterior Finishes $600.00 Interior Finishes $351,400.00 Install Windows $86,000.00 Install Insulation $28,800.00 Install Drywall $39,600.00 Prime & Paint Walls $25,800.00 Install Interior Trim Finishes and Cabinets $54,800.00 Install Other Trim Finishes - Formica, Ceramic Tile, Vinyl Floors Carpet and/or Hardwood Floor Finish $69,000.00 City Inspection - Interior Finishes Work $600.00 Clean Up Site $3,400.00 Walk Thru $4,400.00 PM, Development Team & Contractor Walk-Thru $1,880.00 Stakeholders, PM & Contractor Walk-Thru $2,520.00 Administrative $470.00 Deliver Signed Off City Inspection Reports to PM $300.00 Submit Final Documentation to Stakeholders $170.00 Close Project $640.00

$43,400.00

Advanced Cost Estimating Technique

Three-Point Estimate
Most Likely Cost: $1,517,290.00 Optimistic Cost: $1,300,000.00 Pessimistic Cost: $1,700,000.00 Pexp = $1,300,000 + (4 x $1,517,290) + $1,700,000 / 6 Pexp = $1,300,000 + ($6,069,160) + $1,700,000 / 6 Pexp = $1,300,000 + ($6,069,160) + $1,700,000 / 6 Pexp = $9,069,160 / 6 Pexp = $1,511,527 The above Three-Point Estimate gives me confidence that my budget of $1,517,290 will not be enough to complete the project with overruns. The Three-Point Estimate is $5763 over my projected costs, which is not a lot between the Most Likely Cost and the Expected Cost. I believe this project can be within budget if we stay to the schedule while reducing the cost in the material budget which in turns lower quality of materials.

Cost Assumptions
These estimates we based on the last project handled by The Brown Group. The franchisee has the right to request an update of current price or future estimated prices to the schedule and cost estimates as these are considered an assumption. 1. 2. 3. 4. 5. Material is expected to be inventory. Construction is prepared for all weather conditions. Once the purchase has occurred, construction will begin. Material cost are estimated for at builder A grade material. Overtime was not calculated.

Financial Analysis Projected Income Unit Mix

# Units 40 32 48 16 32 16 16 Type Efficiency 1 bed/1 bath 1 bed/1 bath 1 bed/1 bath, den 2 bed/1 bath 2 bed/2 bath 2 bed/2 bath Size (SF) 431 468 554 644 759 869 907 Market Rent per Mo. $370.00 $390.00 $440.00 $500.00 $550.00 $605.00 $615.00 Market Rent/SF per Mo. $0.86 $0.83 $0.79 $0.78 $0.72 $0.70 $0.68 Gross Rent Per Mo. $14,800.00 $12,480.00 $21,120.00 $8,000.00 $17,600.00 $9,680.00 $9,840.00 Yearly Rent Per Mo. $177,600.00 $149,760.00 $253,440.00 $96,000.00 $211,200.00 $116,160.00 $118,080.00

200

662
Weekly Income* = $93,520.00 Yearly Income* = $1,122.240.00

$495.71

$0.77 $93,520.00 $1,122,240.00

* - Are indicated with full occupancy. Vacancy ratio was not calculated in chart.

Schedule
Auto Scheduled 1 Acquisition & Planning 131.25 days Fri 6/1/12 Mon 12/3/12 Auto Scheduled 1.1 Grounds 131.25 days Fri 6/1/12 Mon 12/3/12 Auto Scheduled 1.1.1 Franchise Fee 45 days Fri 6/1/12 Thu 8/2/12 Franchise Fee[$250,000.00] Auto Scheduled 1.1.2 Purchase Land 45 days Fri 6/1/12 Thu 8/2/12 Acquisition Dept,Purchase Land[$125,000.00] Auto Scheduled 1.1.3 Hire Architect 30 days Fri 8/3/12 Thu 9/13/12 4 PM Auto Scheduled 1.1.4 Review & Approve Blue Prints 10 days Fri 9/14/12 Thu 9/27/12 5 Development Team,PM Auto Scheduled 1.1.5 General Contractor Solicitation 30 days Fri 9/28/12 Thu 11/8/12 6 PM,General Contractor Solicitation[$1,500.00] Auto Scheduled 1.1.6 Hire General Contractor 0.5 days Fri 11/9/12 Fri 11/9/12 7 PM,Development Team,General Contractor Auto Scheduled 1.1.7 Submit Blue Prints to City 15 days Fri 11/9/12 Fri 11/30/12 8 PM Auto Scheduled 1.1.8 Purchase Permits 0.5 days Fri 11/30/12 Fri 11/30/12 9 PM,Purchase Permits[$15,000.00] Auto Scheduled 1.1.9 Order Utilities 0.25 days Mon 12/3/12 Mon 12/3/12 10 Development Team Manually Scheduled 2 Construct Building 335.75 days Fri 6/1/12 Fri 9/13/13 Auto Scheduled 2.1 General Contractor 294.75 days Fri 6/1/12 Thu 7/18/13 Auto Scheduled 2.1.1 Land 54 days Mon 12/3/12 Fri 2/15/13 Auto Scheduled 2.1.1.1 Excavate Land 14 days Mon 12/3/12 Fri 12/21/12 11 General Contractor,Excavate Land[1 Dumb Trucks] Auto Scheduled 2.1.1.2 Prep Footing & Foundation 10 days Fri 12/21/12 Fri 1/4/13 15 General Contractor,Materials - Footing & Foundation[1 Rebar Wire Mess] Auto Scheduled 2.1.1.3 City Inspection - Footing & Foundation 0.5 days Fri 1/4/13 Fri 1/4/13 16 City Inspector,General Contractor Auto Scheduled 2.1.1.4 Pour Concrete - Footing & Foundation 3 days Fri 1/4/13 Wed 1/9/13 17 General Contractor,Pour Concrete - Footing & Foundation[1] Auto Scheduled 2.1.1.5 Frame Building 21 days Wed 1/9/13 Thu 2/7/13 18 General Contractor,Frame Building[1 Lumber & Nails] Auto Scheduled 2.1.1.6 Install Floor Sheathing 5 days Thu 2/7/13 Thu 2/14/13 19 General Contractor,Install Brick Veneer[1 Brinks & Mortar] Auto Scheduled 2.1.1.7 City Inspection - Framing 0.5 days Thu 2/14/13 Fri 2/15/13 20 City Inspector,General Contractor Auto Scheduled 2.1.2 Sub Contractors 19 days Fri 2/15/13 Thu 3/14/13 Auto Scheduled 2.1.2.1 Roofer - Install Roofing Materials 4 days Fri 2/15/13 Thu 2/21/13 21 Roofing Company,Roofer - Install Roofing Materials[1 Shingles] Auto Scheduled 2.1.2.2 Masonry - Install Chimneys 3 days Fri 2/15/13 Wed 2/20/13 21 Masonry Company,Masonry - Install Chimneys[1 Brinks & Mortar] Auto Scheduled 2.1.2.3 Plumber - Rough-In Plumbing 15 days Fri 2/15/13 Fri 3/8/13 21 Plumbing Company,Plumber - Rough-In Plumbing[1 Pipes] Auto Scheduled 2.1.2.4 Electrical - Rough-In Electrical 18 days Fri 2/15/13 Wed 3/13/13 21 Electrical Company,Electrical - Rough-In Electrical[1 Pipes & Wire] Auto Scheduled 2.1.2.5 HVAC - Rough-In HVAC 14 days Fri 2/15/13 Thu 3/7/13 21 HVAC Company,HVAC - Rough-In HVAC[1 HVAC Materials] Auto Scheduled 2.1.2.6 City Inspection - Sub Contractor Work 1 day Wed 3/13/13 Thu 3/14/13 27,26,23,24,25 City Inspector Auto Scheduled 2.1.3 Exterior Finishes 291.75 days Fri 6/1/12 Mon 7/15/13 Auto Scheduled 2.1.3.1 Install Brick Veneer 15 days Thu 3/14/13 Thu 4/4/13 28 Masonry Company,Install Brick Veneer[1 Brinks & Mortar]

Auto Scheduled 2.1.3.2 Install Trim 4 days Fri 6/1/12 Wed 6/6/12 General Contractor,Install Trim[1 Trim] Auto Scheduled 2.1.3.3 Pour Driveway with Black Top 3 days Tue 6/25/13 Fri 6/28/13 46 General Contractor,Pour Driveway with Black Top[1 Asphalt] Auto Scheduled 2.1.3.4 Prep Sidewalk 2 days Fri 6/28/13 Tue 7/2/13 32 General Contractor,Prep Sidewalk[1 Lumber & Nails] Auto Scheduled 2.1.3.5 City Inspection - Sidewalk 0.5 days Tue 7/2/13 Wed 7/3/13 33 General Contractor,City Inspector Auto Scheduled 2.1.3.6 Pour Sidewalk with Concrete 1 day Wed 7/3/13 Thu 7/4/13 34 General Contractor,Pour Sidewalk with Concrete[1 Concrete] Auto Scheduled 2.1.3.7 Landscape 7 days Thu 7/4/13 Mon 7/15/13 35 General Contractor,Landscape[1 Vegatation] Auto Scheduled 2.1.3.8 City Inspection - Exterior Finishes 0.5 days Mon 7/15/13 Mon 7/15/13 36 General Contractor,City Inspector Auto Scheduled 2.1.4 Interior Finishes 108.5 days Fri 2/15/13 Wed 7/17/13 Auto Scheduled 2.1.4.1 Install Windows 5 days Fri 2/15/13 Fri 2/22/13 21 General Contractor,Install Windows[1 Windows] Auto Scheduled 2.1.4.2 Install Insulation 14 days Thu 3/14/13 Wed 4/3/13 28 General Contractor,Install Insulation[1 Insulation] Auto Scheduled 2.1.4.3 Install Drywall 18 days Thu 3/14/13 Tue 4/9/13 28 General Contractor,Install Drywall[1 Drywall] Auto Scheduled 2.1.4.4 Prime & Paint Walls 14 days Tue 4/9/13 Mon 4/29/13 41 General Contractor,Prime & Paint Walls[1 Primer & Paint] Auto Scheduled 2.1.4.5 Install Interior Trim Finishes and Cabinets 14 days Mon 4/29/13 Fri 5/17/13 42 General Contractor,Install Interior Trim Finishes and Cabinets[1 Trim & Cabinets] Auto Scheduled 2.1.4.6 Install Other Trim Finishes - Formica, Ceramic Tile, Vinyl Floors 7 days Fri 5/17/13 Tue 5/28/13 43 General Contractor,Install Other Trim Finishes - Formica Ceramic Tile Vinyl Floors[1 Other Trim] Auto Scheduled 2.1.4.7 Carpet and/or Hardwood Floor Finish 20 days Tue 5/28/13 Tue 6/25/13 44 General Contractor,Carpet and/or Hardwood Floor Finish[1 Carpet and/or Hardwood] Auto Scheduled 2.1.4.8 City Inspection - Interior Finishes Work 0.5 days Tue 6/25/13 Tue 6/25/13 39,40,41,42,43,44,45,20 City Inspector,General Contractor Auto Scheduled 2.1.4.9 Clean Up Site 2 days Mon 7/15/13 Wed 7/17/13 46,37 General Contractor,Clean Up Site[1 Brooms & Bags & Dumpsters] Auto Scheduled 2.1.5 Walk Thru 1 day Wed 7/17/13 Thu 7/18/13 Auto Scheduled 2.1.5.1 PM, Development Team & Contractor Walk-Thru 0.5 days Wed 7/17/13 Thu 7/18/13 47 General Contractor,PM,Development Team,PM Development Team & Contractor Walk-Thru Auto Scheduled 2.1.5.2 Stakeholders, PM & Contractor Walk-Thru 0.5 days Thu 7/18/13 Thu 7/18/13 49 Stakeholders,General Contractor,PM,Stakeholders PM & Contractor Walk-Thru Auto Scheduled 2.1.6 Administrative 0.5 days Mon 7/15/13 Tue 7/16/13 Auto Scheduled 2.1.6.1 Deliver Signed Off City Inspection Reports to PM 0.25 days Mon 7/15/13 Mon 7/15/13 17,21,28,34,37,46 General Contractor Auto Scheduled 2.1.6.2 Submit Final Documentation to Stakeholders 0.25 days Tue 7/16/13 Tue 7/16/13 52 PM,Submit Final Documentation to Stakeholders[1 Paper] Auto Scheduled 3 Close Project 1 day Tue 7/16/13 Wed 7/17/13 53 PM