Construction Management Leadership & Costs

 

Approaching Complex Real Estate Projects Through the Lens of Ownership

 

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What We Do

 

BLDG Construction, LLC ("BLDG-C") is a subsidiary of BLDG-UP and provides pre-construction and general contracting services with a developer’s discipline.

 

Unlike traditional contractors who focus solely on contract performance, we build through the lens of ownership — prioritizing cost control, schedule integrity, margin protection, and alignment with underwriting assumptions.

 

Our integrated structure eliminates the friction often present between developers and third-party contractors.

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Our Role​

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As a Construction Manager, we are responsible for:

• Leading the construction process from planning through close-out

• Coordinating architects, engineers, consultants, and contractors

• Developing and managing realistic budgets and schedules

• Identifying execution risk early and addressing it proactively

• Managing day-to-day construction oversight and decision-making

• Serving as the owner’s advocate throughout the build

 

Our involvement is hands-on, structured, and accountability-driven.

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Pre-Construction

 

Pre-construction is where cost certainty is established.  Our pre-construction services include:

 

• Detailed cost estimating

• Trade scope breakdown and procurement strategy

• Constructability review of construction documents

• Structural and MEP coordination analysis

• Value engineering recommendations

• Gantt schedule development and critical path mapping

• Subcontractor outreach and bid leveling

• Long-lead item risk identification

• Development of a Guaranteed Maximum Price (if applicable)

 

The objective is to reduce ambiguity, eliminate unnecessary exposure, and enter construction with disciplined clarity.

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General Contracting

 

During active construction, BLDG-C serves as the General Contractor, responsible for delivering the project in accordance with approved plans, budget, and schedule.  Our General Construction services include:

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• Subcontractor procurement and contract management

• Site supervision and field coordination

• Schedule management and milestone tracking

• Budget control and cost-to-complete forecasting

• Change order review and cost containment

• Quality control oversight

• Safety compliance

• Lender draw package preparation

• Inspection coordination

• Punch list and project closeout

 

Our decisions in the field remain aligned with development strategy and financial objectives.

 

We do not build in isolation — we build with the end result in mind.

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How Our Fees Are Structured

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Our fees are transparent and based on hard construction costs. They are structured in a way that lenders, auditors, and sophisticated owners expect.

 

Summary of costs as a percentage of total project costs at $25,000,000, for example:

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•   $21,759,708 (~87.04%) Hard Costs 1 - Subcontractors & Material (Based on Subcontracts)

•      $1,523,180 (~6.09%) Hard Costs 2 - General Conditions & Material (Calculated at 7% of Part 1 Hard Costs)

•     $1,076,834 (~4.31%) Construction Management Fee ("CM Fee" Calculated at 5% of Hard Costs Minus 1/2 of Pre-Con)

•        $464,037 (~1.86%) Overhead (Calculated at 2% of Hard Costs)

•          $174,013 (~0.7%) Pre-Construction  (Calculated at 0.75% of Hard Costs - Partially credited towards CM Fee*)

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Actual percentages vary based on project size, scope, complexity, duration, and role.  

 

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Here's a more detailed breakdown example

of the total project cost of $25,000,000:

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Hard Costs Part 1 - Subcontractors/Material

$21,759,708 ~87.04% of the Total Project Costs

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Hard costs are the direct costs of labor, materials, and equipment required to construct the building and install its systems.  This represents 100% of subcontractor and material Hard Costs based on direct contract amounts.

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Hard Costs commonly include but are not limited to:

 

• Sitework, excavation, foundations, concrete, steel, framing, and masonry

• Mechanical, electrical, plumbing, fire protection, elevators, and low-voltage systems

• Interior construction, finishes, millwork, doors, glazing, and painting

• Roofing, waterproofing, façade systems, windows, and curtain wall

• Paving, landscaping, site utilities, sidewalks, and exterior lighting

• Subcontractor labor, materials, equipment, and trade markups

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Hard Costs Part 2 - General Conditions/Material

$1,523,180 ~6.09% of the Total Project Costs​​

 

General Conditions are project-specific, time-based costs required to operate the jobsite. They are not overhead or profit. Think of them as general hard costs.  All the labor, materials, and equipment that fall between the subcontractors.  They are calculated at 7% of the subcontractor and material Hard Costs

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General Conditions commonly include but are not limited to:

 

Project Staff (Job-Dedicated):

• Project Manager

• Superintendent

• Assistant PM / Field Engineer

• Site Safety Coordinator

• Field Administration

 

Jobsite Operations & Logistics:

• Temporary site offices and trailers

• Temporary utilities (electric, water, heat)

• Hoisting, scaffolding, sidewalk sheds, fencing

• Site access control and traffic coordination

• Safety compliance and OSHA requirements

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Maintenance & Protection:

• Site cleaning and waste removal

• Snow removal and winter conditions

• Protection of completed work

• Temporary weather protection

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Project-Specific Insurance & Compliance:

• Project-allocable insurance costs

• Construction permits and inspections

• Close-out coordination and documentation​

 

General Conditions scale with project duration and complexity.

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CM Fee

$1,076,834 ~4.31% of Total Project Costs​

 

The Construction Management fee compensates us for professional leadership and oversight, not for carrying construction risk.  The CM fee is calculated at 5% of the total Hard Costs.

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CM Fee Covers:

• Overall construction leadership and accountability

• Budget and schedule control

• Consultant and contractor coordination

• Owner representation during construction

• Pay application review and cost reporting

• Issue resolution and risk mitigation

• Construction close-out and turnover​

 

The CM fee is separate from the cost of the General Conditions and does not include overhead or profit.

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Overhead

$464,037 ~1.86% of Total Project Costs​

 

The Overhead fee covers the organizational infrastructure and professional support systems required to lead and manage complex construction projects, even when we are not assuming construction risk.

Overhead is calculated at 2% of the total Hard Costs.

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This fee is not tied to construction execution risk and does not include cost guarantees, warranties, or liability for construction performance.

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Overhead includes:

 

• Corporate management and senior leadership oversight

• Accounting, cost controls, and financial reporting systems

• Contract administration and document control

• Project management software and technology platforms

• Office operations and administrative support

• Compliance, licensing, and professional insurance (non-project-specific)

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This fee applies only when we are acting as Construction Manager or Owner’s Representative, and reflects the real cost of maintaining the professional infrastructure required to responsibly manage the project.

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Pre-Construction

 $174,013 ~0.7% of Total Project Costs​​

 

Pre-construction is a professional service focused on de-risking the project before ground is broken.  They are calculated at 0.75% of the total Hard Costs.

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Pre-Construction Includes:

• Preliminary and iterative construction budgets

• Constructibility reviews

• Value engineering and scope optimization

• Preliminary construction schedules

• Trade sequencing and logistics planning

• Long-lead item identification

• Permit and inspection strategy coordination

• Lender and ownership support during underwriting

 

*Pre-Construction Fee Credit:  If we are engaged for Construction Management, 50% of the pre-construction fee is credited toward the CM fee.  This aligns incentives while ensuring the pre-construction phase is properly resourced.

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Profit When Acting as CM-at-Risk, or provides a

Guaranteed Maximum Price or Lump Sum contract

 

The Owner can decide.  If BLDG-C provides a Guaranteed Maximum Price or Lump Sum contract, a reasonable profit margin shall be incorporated into each trade and material package to reflect the following risks:​​

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• Guaranteeing total construction costs

• Financial risk associated with construction execution

• Contractual responsibility for cost, schedule, and performance

• Exposure to claims, disputes, and delays

• Warranty and post-completion obligations

• Responsibility for subcontractor performance.

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If the Owner takes the risk, BLDG-C not get a Profit on costs.​ 

 

Owners often prefer to assume the risks outlined above and save this fee.   Again, when we do not assume construction risk, profit does not apply.

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Transparency & Cost Accountability

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Transparency is fundamental to how we manage construction. Our fees are tied directly to verifiable hard construction costs, which means clarity and accuracy in accounting are essential for both ownership and lenders. To support this, we maintain full cost visibility throughout the project's life.

 

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What We Share

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We provide open access to all project-level financial information, including:

 

• Detailed construction budgets and cost breakdowns

• Executed subcontract agreements and change orders

• Monthly pay applications with supporting documentation

• Vendor invoices and lien releases, as required

• Schedule updates tied to cost progress

• Variance reports identifying budget and schedule impacts

 

This ensures that hard costs are clearly defined, trackable, and auditable at all times.

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Why This Matters

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By maintaining a transparent, open-book approach:

• Owners can verify exactly how hard costs are calculated

• Fees tied to hard costs are accurate and defensible

• Budget changes are identified early, not after the fact

• Lenders and auditors receive clean, consistent reporting

• Decision-making is based on real data, not assumptions​

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There are no hidden markups, bundled costs, or blurred line items.

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How It Supports Fair Fee Calculation

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Because our fees are calculated as a percentage of hard costs, transparency protects all parties:

 

• Hard costs are documented and clearly categorized

• General Conditions are separated from trade work

• Professional fees are calculated against agreed-upon cost bases

• Adjustments reflect actual scope and duration, not estimates

 

This structure ensures fees are earned, measurable, and aligned with project reality.

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Our Commitment

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We believe transparency builds trust, improves outcomes, and reduces conflict.  Our goal is not simply to manage construction, but to create a process where ownership always knows where the project stands financially, operationally, and strategically.  That clarity leads to better decisions, fewer surprises, and more predictable results.

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Engagement Philosophy​

 

We believe construction succeeds through:

• Clear roles

• Honest budgets

• Disciplined execution

• Leadership accountability

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Development succeeds when feasibility, capital, and execution remain aligned from day one.  

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Let's Build It.