Construction financing is one of the riskiest, most complicated and sophisticated forms of lending, and experience matters. CBRE’s Construction Risk Management team guides investors and lenders through the complex process of construction financing, from pre- to post-construction. To minimize exposure, lenders must control and monitor the construction process, including the budget, completion, take-out failure and document
Since 1979, the Construction Risk Management team has monitored the construction of more than 8,000 projects nationwide, with an aggregate direct cost in excess of $300 billion. Construction Risk Management professionals apply the lessons learned over the last 5+ real estate cycles to all assignments, and keep clients knowledgeably apprised of project status.
- Construction Consulting and Oversight
The Construction Risk Management team serves construction, mezzanine and permanent lenders and investors throughout the entire construction cycle by providing proactive advice to safeguard their loan or investment. Services are tailored to a client’s risk position and address key concerns such as the developer and contractor track record with a keen focus on budget and schedule.
- Pre-Construction Phase
- Review of construction drawings and specifications
- Review of regulator and entitlement documents
- Analysis of direct cost and contingency budgets
- Review of agreements: design, construction and building loan
- Review of construction and disbursement schedules
- Advising on risk mitigation, such as bonding and SDI requirements
- Preparation of a Construction Risk Assessment
- Construction Phase
- Monitor general compliance with contract documents
- Tracking percentage of work-in-place and funds available to complete the project
- Tracking of construction and disbursement schedules
- Ongoing review of buyout status and letting of subcontracts
- Change order and contingency budget analysis
- Review of waivers of lien
- Review of testing reports
- Photographic documentation of progress
- Preparation of Project Status Reports
- Close-Out Phase
- Designers’ Certificates-of-Compliance
- Final waivers of lien
- Contractors’ Certificates-of-Completion
- Temporary and permanent Certificates of Occupancy
- Pre-Construction Phase
- Construction Cost Auditing
CBRE’s team of accountants and construction cost professionals provide owners and developers with confidence that each requisition is prepared in accordance with the terms and conditions of the construction contract. Initially the goal is to work on a collaborative basis to dial-in the appropriate scope for addressing the risks of overpaying on a construction project.
- Construction Claims and Litigation Support
The Construction Risk Management team provides expertise and objectivity during litigation or negotiations. Construction disputes are carefully investigated by CBRE’s professionals to determine the root cause and are geared toward bringing the parties to a resolution, so the project can progress to the satisfaction of all at-risk parties.
- Construction Cost Consulting
Construction Risk Management accountants and cost estimators offer an array of services for lenders, property owners, appraisers and developers. Utilizing CBRE’s comprehensive, proprietary cost database, estimates range in scope from conceptual to detailed quantity take-off/unit cost estimates, which can be used for establishing budgets, feasibility studies, cost-to-complete studies, corporate strategic planning, replacement and reproduction cost studies, securing financing and insurance claims and litigation.