Why involving a Construction Loan Monitor is Crucial to Building Development Success
1 like183 views
Involving a construction loan monitor early in the development process provides key benefits: it reduces risks for lenders and borrowers by objectively assessing the project's timeline, costs and risks; it limits potential for cost overruns by establishing an accurate budget; and it sets a realistic financial baseline for evaluating contractor bids. A monitor from Altus Group can review documentation, budgets and contracts to provide reliable information to all parties. This oversight ensures the project's budget, schedule and quality expectations are clearly understood.
Why involving a Construction Loan Monitor is Crucial to Building Development Success
- 1. Street Smart. World Wise. Why involving a Construction Loan Monitor is crucial Cost Consulting & Project Management, Altus Group Limited 2020 - 4th Street SW, Suite 310, Calgary , Alberta, T2S 1W3 Canada T 403.508.7770 F 403.228.1020 altusgroup.com to building development success In developing a concept plan for a smooth project development, there are many hurdles, often financial, that one must overcome. To bypass, or at the minimum, mitigate the volatility that comes with any construction project, involving a Construction Loan Monitor and cost estimators within the project concept development will provide unbiased insight into realistic costs, timelines, and other potential risks along the way. A Construction Loan Monitor will help protect the interests of your company, and the financial stakeholders investing in your project by providing timely and reliable information, objectively outlining any and all risk parameters, and the monitoring the financial feasibility throughout the development process. Your Construction Loan Monitor will help to review and verify all project-related documentation and contracts you have, as well as help prepare and track all budgets throughout the project. While there are many aspects a Construction Loan Monitor will provide, three key benefits of involving a Construction Loan Monitor early on in your project development boils down to three things: risk reduction, limiting cost overruns, and setting a realistic financial gauge. 1. Risk Reduction Risk is reduced for both the Lender and the Borrower. By having a reliable third party, such as Altus Group, review the project's timelines, potential threats, and finances; all
- 2. Street Smart. World Wise. aspects of the project are able to be objectively assessed. With this unbiased review, an honest outline of the project's risks, positives, and potential profits, give the Lender and Borrower a better understanding of how to move forward in beginning development. 2. Cost Overruns Since the Construction Loan Monitor is unbiased, they are able to effectively assess the true cost of a project, lowering the potential of cost overruns. This way, all parties know at the onset of their investment what the TRUE project budget should be, allowing for proper financing, equity, and scheduling to be arranged accordingly. 3. Set a Realistic Financial Gauge By having a third party estimate, there is a stronger, more realistic gauge against a construction contractor tender package, submitted prior to signing of the construction contract. With this estimate, you will have a better understanding of the cost and timelines for your specific project, allowing you to confidently sign the contract as is, or negotiate and question where there are any discrepancies. To have the most successful, straightforward project completion in regards to time, cost, and quality, early engagement of a Construction Loan Monitor and cost estimators is essential. The Lender is provided with greater certainty as to the true project budget, making them aware of their upfront requirement; the Borrower is provided with reliable data to bench mark tenders received and allow for successful negotiation of contract awards; and the cost of value engineering is better projected. To learn more about how involving a Construction Loan Monitor early on in your project cost development, contact Stuart Boyce at stuart.boyce@altusgroup.com, or visit Altus Group's Construction Loan Monitoring. Cost Consulting & Project Management, Altus Group Limited 2020 - 4th Street SW, Suite 310, Calgary , Alberta, T2S 1W3 Canada T 403.508.7770 F 403.228.1020 altusgroup.com