The asbestos survey saved a 140 unit office conversion I ran for 22 months
My firm does owner's representation and MEP coordination on renovation work. Last month we closed out our first conversion at real scale, a 1979 mid rise, 186,000 gross feet, 140 apartments. Our fee was $340,000 over 22 months plus a completion bonus tied to certificate of occupancy date, which we hit within three weeks.
The numbers the sponsor started with were $34m of hard cost, so about $183 a gross foot, $243,000 a unit, on a purchase of $9.8m. They finished at $37.6m hard, 10.6 percent over. Their contingency was 8 percent, so they ate the rest out of the developer fee and a partner capital call of $1.1m.
The thing that nearly broke it was the plumbing risers. The design assumed reuse of two existing wet cores and new risers in four locations. Once we opened the slab, two of the four new riser locations had post tensioned tendons running where the drawings showed none, and rerouting moved 26 bathroom stacks. That was $1.4m and 11 weeks.
What kept 11 weeks from becoming 30 was the hazardous materials survey. We pushed the sponsor to pay $46,000 for an invasive survey with 180 samples before closing rather than the visual screen the lender required. It found asbestos in the floor tile mastic on nine floors and in the fireproofing at the beam connections. That got abated as a first phase on a separate contract while the design was still being finished, so when the riser problem hit, abatement was already behind us instead of stacked on top.
What I would keep. The invasive survey, the separate early abatement contract, and coring x rays on every penetration before the pipe was ordered. What I would change is the completion bonus structure, because it made me the person arguing for schedule in rooms where somebody needed to argue for scope.