2175 Market Street is an 80,000 SF residential and mixed-use building located at the crossroads of three of San Francisco’s most popular neighborhoods: the Castro, Duboce Triangle, and Mission. The six-story building includes 88 residential units, a rooftop deck, a courtyard, and 7,935 SF of retail space on the ground floor.
Spire’s consultants assisted the developer by completing a cost review of the contractor’s guaranteed maximum price (GMP) cost breakdown. This analysis included:
- Performing a quantity takeoff for major project quantifiers (e.g., building gross square feet, units, site square feet, etc.)
- Preparing an independent cost estimate based on these quantities reviewing project information provided by client (drawings, schedule, change orders, etc.)
- Reviewing past cost models and knowledge of the current construction market
- Reconciling and comparing Spire’s cost estimate with the contractor’s GMP Cost Breakdown
- Developing a cost review report summarizing Spire’s analysis and findings
As a result of the analysis, Spire found the contractor’s direct costs within 2% of Spire’s estimate and the total construction cost within 6%. Therefore, Spire’s consultants concluded the contractor’s price was reasonable and competitive in the marketplace at the time.
Spire Consulting Group can construct historical pricing profiles for construction materials using various pricing indexes and historical data. Material escalation analysis is an objective tool for dispute avoidance and claims mitigation if used proactively and is an impartial tool for dispute resolution if used forensically. This material escalation tool, combined with revised cost forecasting for an ongoing project, avoids potential disputes.
Spire’s consultants provide material escalation analysis to supplement your efforts, whether you are a contractor or subcontractor trying to prove material escalation or an owner attempting to defend against the overinflation of material costs.
Material escalation analysis can play a pivotal role proactively in the drafting of contract documents and forensically in the expert reports and witness testimony provided for litigation support.