Implementation Tips For Commercial Developers: Single Lending Source

Business Scenario

  • Developer purchases land to develop commercial structure.
  • Developer would like to keep land development and construction all under one project.
  • There are multiple phases as shown below.
    1. Acquisition Phase: Analyzing suitable property locations or building purpose (i.e. retail, office).
    2. Design Phase: Working with architects and consultants to complete design.
    3. Construction Phase: Building the structure with a construction management firm or general contractor.
    4. Management Phase: Managing and maintaining the property.
  • There is a single lender involved in the first three phases.
  • The first three phases referenced above (ex. Acquisition, Design, and Construction) can be managed by Sage Construction Management and the instructions provided below outline the project management/job cost structure for these three phases.

Project Implementation Plan With One Funding Source

Method A
One Prime Contract For All Phases		 Method B
Pime Contracts For Each Phase
 1) Contact Management

Make sure all firms involved on the project including lenders are added in the Contact Management module.

  • Development Lending Source (e.g. Bank of America)
  • Legal Firm
  • Architect
  • Consultants
  • Construction Management Firm and/or GC

Related Help Topic:
 
 2) Project

There would be one project established in Sage Construction Management for the last three phases mentioned above.

Example Project:

Project # HBTownCtr

Project Title: Huntington Beach Town Center

Related Help Topics:
 
 3) Project Directory

The following companies should be added to the Project Directory for both options.

  • Your Firm
  • Development Lending Source (e.g. Bank of America)
  • Legal Firm
  • Architect
  • Consultants
  • Construction Management Firm and/or GC

Related Help Topic:
 
 4) Job Cost Codes

The Job Cost Code structure provided below is to convey a method for tracking costs and funding for the acquisition, design and construction phases. This structure can be modified to fit one's own technique. The Internal Division and Internal Division Description fields are optional. However, they are recommended since Sage Construction Management has report options to summarize project financials by these codes in addition to the Job Cost Code field.

Related Help Topics:

* Note: Contract Setup Wizard can create the applicable Job Cost Codes, Prime Contract and Budgets.


Order # Job Cost Code Description Quantity Units Internal Division Internal Division Description
1 00101 Land Acquisition 1 LS 001 Land Acquisition
2 00201 Environmental Studies 1 LS 002 Pre-Design Soft Costs
3 00202 Legal 1 LS
4 00301 Architectural 1 LS 003 Architectural
5 00401 Consulting - Civil 1 LS 004 Consulting
6 00402 Consulting - Structural 1 LS
7 00403 Consulting - Mechanical 1 LS
8 00404 Consulting - Electrical 1 LS
9 00405 Consulting - Other 1 LS
10 00501 Construction Management Services 1 LS 005 Construction Management Services
11 01000 General Requirements 1 LS 006 GC Construction Services
12 02000 Site Construction 1 LS
13 03000 Concrete 1 LS
14 04000 Masonry 1 LS
15 05000 Metals 1 LS
16 06000 Wood and Plastics 1 LS
17 07000 Thermal and Moisture Protection 1 LS
18 08000 Doors and Windows 1 LS
19 09000 Finishes 1 LS
20 10000 Specialties 1 LS
21 11000 Equipment 1 LS
22 12000 Furnishings 1 LS
23 13000 Special Construction 1 LS
24 14000 Conveying Systems 1 LS
25 15000 Mechanical 1 LS
26 16000 Electrical 1 LS
 
 5) Prime Contract and Budget Structure

Prime Contract Note:

A single Prime Contract is setup between the lender and development company. This contract can be created manually or automatically using the setup wizard that is available in the Contract Administration module. If the project is self-funded then the development company is referenced both in the Prime Contract's Issued By and Issued To fields.

Prime Contract Note:

Multiple Prime Contracts are setup between the lender(s) and development company with each having their respective POs/Subcontracts. These contracts can either be created manually or automatically using the setup wizard that is available in the Contract Administration module. If each phase has a different lendor then this would be reflected in the Prime Contracts.

Prime Contract # 001 : All Phases (Contract Type = Fixed Lump Sum)

  • Job Cost Codes Referenced On Prime: #1-26 above
  • Cost Budgets = Anticipated Cost Budgets
  • Contract Amount = Loan Amount from Funding Source
  • Labor and Equipment Hour Budgets = 0

Prime Contract # 001 : Acquisition Phase (Contract Type = Fixed Lump Sum)

  • Job Cost Codes Referenced On Prime: #1-3 above
  • Cost Budgets = Acquisition Phase Anticipated Cost Budget
  • Contract Amount = Acquisition Phase Loan Amount
  • Labor and Equipment Hour Budgets = 0

Prime Contract # 002 : Design Phase (Contract Type = Fixed Lump Sum)

  • Job Cost Codes Referenced On Prime: #4-9 above
  • Cost Budgets = Design Phase Anticipated Cost Budget
  • Contract Amount = Design Phase Loan Amount
  • Labor and Equipment Hour Budgets = 0

Prime Contract # 003 : Construction Phase (Contract Type = Fixed Lump Sum)

  • Job Cost Codes Referenced On Prime: #4, 10-26 above
  • Cost Budgets = Construction Phase Anticipated Cost Budget
  • Contract Amount = Construction Phase Loan Amount
  • Labor and Equipment Hour Budgets = 0

Related Help Topics:

* Note: Contract Setup Wizard can create the applicable Job Cost Codes, Prime Contract and Budgets.
 
 6) Expense Tracking
  • Project # HBTownCtr : Huntington Beach Town Center
    • Prime Contract # 001 : All Phases
      • PO or Subcontract # 001 : Environmental Consultant
      • PO or Subcontract # 002 : Lawyer
      • PO or Subcontract # 003 : Architect
      • PO or Subcontract # 004 : General Contractor
  • Project # HBTownCtr : Huntington Beach Town Center
    • Prime Contract # 001 : Acquisition Phase
      • PO or Subcontract # 001 : Environmental Consultant
      • PO or Subcontract # 002 : Lawyer
    • Prime Contract # 002 : Design Phase
      • Subcontract # 003 : Architect
    • Prime Contract # 003 : Construction Phase
      • Subcontract # 004 : CM Firm
      • Subcontract # 005 : General Contractor