BUDGETS

Question 1

TOP DOWN Budgeting:

Answer 1

• start with gross fee for project
• formula driven
• very accurate if based on firm historical project data

Question 2

BOTTOM UP budgeting:

Answer 2

• starts with the hourly fee
• break project down into individual tasks and assign amount of work needed
• (best to use top down as a base and work back up) / use a combination of both.

Question 3

4 methods for Cost estimating:

Answer 3

• order of magnitude / project comparison method -whole building
• unit of measure - sf price
• elemental methods / assemblies/systems - systems priced
• quantity survey method/ unit price - actual pricing

Question 4

Relationship of Project Budget to Efficiency

Answer 4

Gross SF are the underlying common factor.
E = NSF / GSF
B = $ per sf * GSF

Question 5

Determine land value: (4)

Answer 5

Comparison Method: compared to other similar parcels (can be applied to all categories of use) and is the most accurate if current data is available.

Development Method: when comparisons aren’t available, use estimates to determine the selling price of lot, cost to develop, time to develop, and net sale price.

Residual/Income Approach Method: used in highly developed areas by estimating potential income from improvements that yield the highest return (highest & best use)

Allocation Method: used to determine value of improved properties by deducting the value of site improvements to get the value of the land.

Question 6

Gross Area (Programming & Zoning)

Answer 6

Floor area of a building within the building envelope, measured to the exterior face of wall
(IBC: measured to the interior face of wall.)

Question 7

Rentable Area

Answer 7

Floor area of a building to be assigned to a tenant as a basis for rent calculation. Rentable area (measured from inside of exterior wall) includes usable area, building core, service areas, and circulation.
-excludes Major vertical shafts and penetrations, stairs, elevators.

Question 8

Usable Area

Answer 8

Includes the floor area to be assigned to occupant groups or available for assignment. This encompasses net assignable area, building columns and secondary circulation.
-excludes exterior walls, major vertical penetrations, primary circulation and building core

Question 9

Net Area May sometimes be referred to as Net Assignable Area.

Answer 9

-excludes exterior walls, major vertical shafts and penetrations, building core and service areas, and both primary and secondary circulation, also excluded are bathrooms).
(IBC: Building square footage calculations utilize gross areas, while occupancy calculations are either gross or net.)

Question 10

Overall Building Efficiency

Answer 10

Overall Building Efficiency =
Interior Layout Efficiency * Base Building Efficiency

Overall Building Efficiency =
net assignable area / building gross area

Question 11

Base building efficiency

Answer 11

Base building efficiency =

usable area / building gross area

Question 12

Interior layout efficiency

Answer 12

Interior layout efficiency =

net assignable area / usable area

Question 13

Building Efficiency - R/U ratio

Answer 13

R/U ratio = rentable area / usable area

Question 14

Typ. Building Efficiency (%): Ware house

Answer 14

Ware house 90

Question 15

Typ. Building Efficiency (%): Museums

Answer 15

Museums 83-90

Question 16

Typ. Building Efficiency (%): offices

Answer 16

Offices 75-85

Question 17

Typ. Building Efficiency (%): Hospitals

Answer 17

Hospitals 50-65

Question 18

What Does Sources and Uses Mean?

Answer 18

A sources and uses analysis provides a summary of where the capital used to fund an acquisition will come from (the sources), what this capital will purchase (the uses). The sources and the uses must equal each other, and they must total the total purchase price plus transaction costs.