An owner’s representative‘s scope of services may cover all phases of the project’s development or be limited to select parts of the process.

This is usually determined by the capabilities that the developer’s team brings to the project and their availability. Below is a explanation of services offered by owner’s representatives in each phase of a real estate development project, which include:

  1. Concept/Initiation
  2. Feasibility
  3. Design
  4. Procurement
  5. Construction
  6. Post Construction

Concept/Initiation

owners representative scope of services during concept/initiation phase

The purpose of the Concept/Initiation phase of development is to determine the preliminary development concept for the project.

Activities in this phase include a review of governmental objectives for the project including their capacity to assist and their motivation and ability to approve the project. Financial objectives are also determined which include the investment levels required, expected rates of return and possible financing. Developmental objectives are roughly sketched out including site, timing, market position, product type and product image. Operational objectives are also coarsely created including such things as sales and leasing velocity, level of management, and possible exit strategies.

With all the necessary background and foreground information in place the next step of the concept/initiation phase is to establish project objectives. This includes identifying the major developmental issues — regulatory, locational, land assembly, public sector, political and environmental issues for example.

Through careful program management, the Owner’s Rep helps establishes the owner’s goals and objectives for budget, schedule, design, function, and quality. These become the anchors that guide the decision making process through the entire design and construction process.

Then with the development of the scope of the project in hand, the final activity of the owner’s representative is to assist in the assembly of the Development Team – architect, land planner, GC, engineering, legal, market consultants, etc. This could include putting the RFPs together and providing a complete analysis of contractor/consultants RFP responses and assisting with the award of the contracts and negotiation of the appropriate terms.

Feasibility

owners representative scope of services during feasability phase

The purpose of the Feasibility phase of the development process is to further refine and scrutinize the development concept for the next phase of development – Design.

The activities of the Owner’s Representative in this phase of development may include the collection of more detailed data – site evaluations, market data, economic trends, sources of demand, comparable analysis, competitive analysis, supply analysis of existing and proposed project and the investment climate.

After the data is collected, analysis, evaluations and recommendations of the project concept are made. These include estimating future demand and growth, estimates of future supply, and evaluations of the site’s advantages and disadvantages. It also includes analysis of the product type and targeted price points by market segment.

The Owner’s Reps assist in the analysis performing due diligence, creating pro formas and cost modeling.

With this analysis final estimates of sales and leasing velocities are made along with final recommendations on the site, product type, facilities and amenities.

This allows the development of a finalized Development Concept which is used to begin the Design phase of development and also triggers a deeper analysis into the operational performance projections and the financial feasibility analysis. Here Owner’s Representatives may assist with costs and budgeting, cash flow analysis, and initial project financing including equity, debt, ownership, terms, and sources of funds.

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Design

owners representative scope of services during design phase

The purpose of the Design phase of the development process is to finalize the project’s plans so that costs, budgets, timing, approvals and permits can be secured in the Procurement phase of the project.

In the Design phase the Owner’s Rep main activity is Design Management. This may include assisting the owner in selecting an architect and design firms – creating RFPs and assessing responses.

Once the Design team is established the Owner’s Rep works with the design team to carefully managed and ensure that the design is consistent with the owner’s vision, scope, schedule, and rough budget.

At each major juncture in the design process, the Owner’s Rep conducts a critical review of the project documents. This assures that what is being created by the design team is constructable within the established budget, consistent with the owner’s intent and scope, and free of design conflicts, which adds costly redesign, schedule delays, and change orders down the road.

During these reviews the Owner’s Rep provide value engineering suggestions, constructability reviews and building systems evaluations which result in greater control and more predictable outcomes, maximizing the owner’s construction investment.

Value engineering applied during this crucial early design development phase results in greater control and more predictable outcomes, maximizing the owner’s construction investment.

Then after reviewing the design documents for constructability, coordination, completeness and value the Owner’s Rep is responsible for finalizing the development program for the project including costs, budgets and timing.

Procurement

owners representative scope of services during procurement phase

The purpose of the Procurement phase of development is to get everything lined up and ready to go to begin construction.

In this phase the Owner’s Representative is actively working to complete the final design and engineering drawings and documents, finalize and ready the construction team and preparing final project cost estimates, critical path scheduling, cash flow analysis, financial modeling, and strategic financial structures. The Owner’s Representative is also responsible for finalizing all contractor and subcontractor contracts.

In addition the Owner’s Rep may be helping to assemble the land and arrange for demolition and utilities coordination, secure agreements with the public sectors, obtain permits and approvals, and prepare necessary financial documents for equity and loan packages including joint venture arrangements, equity investments, pre-development loans, mezzanine loans, construction loans, takeout loans and mortgages.

The Owner’s Rep may also be involved in community outreach, obtaining insurance and security for the construction, along with coordinating with the sales/leasing/advertising advisors to begin their marketing efforts.

Construction

owners representative scope of services during construction phase

The purpose of the Construction phase of the development process is to construct or build the project and obtain a Certificate of Occupancy.

The Owner’s Rep acts on the owner’s behalf in all matters of construction with a focus on cost tracking and reporting, maintaining agreed upon levels of quality and delivering the project on time and on budget.

To do this the Owner’s Representative executes the contracts and meets regularly with the General Contractor to ensure realistic activity sequences and durations, allocation of labor and materials, quality levels and the delivery of products requiring long lead times.

The OR regularly monitors the schedule and reports on potential variances between schedule and completion dates, and makes adjustments to schedule to meet completion date.

In addition the OR recommends action when the requirements of a contract are not being fulfilled, they coordinate periodic inspections, record progress of the project, meet regularly with the owners to give executive briefs/project status reports, monitor actual costs, anticipated final costs, update cost flow reports and forecasts, mange job changes and hold final budgets/costs.

Along the way the OR deals with setbacks, makes sure safety regulations are being met, mediate construction disputes, manages disbursements and change order requests all in an effort to expedite the schedule and minimize delays and cost over-runs.

Post-Construction

owners representative scope of services during post-construction phase

The purpose of the Post-Construction phase of development is to complete the project and turn over control to the owners or the owner’s management team.

Here the OR will prepare and finalize all disbursements, close out all contracts, complete warranty work and secure and transmit to the owner required guarantees, affidavits, releases, bonds and waivers.

In addition the Owner’s Representative will turn over keys, manuals, record drawings, maintenance manuals. File all notices of completion, coordinate final payment and secure final conditional lien releases and any other activities which may be required to occupy the project.

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