While the retail real estate market still has a long way to go before the word “recovery” can be uttered, there are signs of a thaw on the development front. The CoStar Group, a Bethesda, Md.-based research firm, reports that developers will add just 21.4 million square feet of new space in 2010—down from a peak of almost 190 million square feet in 2007. However, the amount of proposed centers is showing a modest increase with CoStar reporting 71.6 million square feet of retail space in that stage of development.
And for those ready to embark on new projects, keeping construction costs down remains a priority. One of the areas where inaccurate estimates can result in millions of dollars of extra costs is site work, says Michael Detwiler, president and CEO of BLUERIDGE Analytics, a Charlotte, N.C.-based software provider. Site work can account for up to 30 percent of a project’s total construction cost, according to Detwiler, but developers tend to have a hard time estimating site costs accurately. To help developers bring down those costs BLUERIDGE offers software-as-a-service called SITEOPS, which allows civil engineers to draw and compare multiple site plans for a given project within 24 hours.
Normally, the engineers involved in the project need several weeks to complete site drawings, several months to come up with a final design and can consider only a few layout options because of time constraints, notes David Settlemeyer, civil engineering support specialist with BLUERIDGE. That often leads them to miss cost-saving alternatives. Recently, for example, Settlemeyer was called into help an engineering team on a small mixed-use development and found that though they estimated site work cost at $2.1 million, it could have easily be done for $1.7 million.
“They did a good job with the amount of time they were given, but they just couldn’t use every option out there,” Settlemeyer notes.
The SITEOPS software proposes to eliminate that problem by automatically choosing the most cost effective layouts among millions of possible site designs, complete with detailed budgets. After being uploaded with property line, site constraint and topography information, the 3-D version of the program can deliver up to five designs in less than a day. As they work on the plans, the engineers using SITEOPS can save their work within the software program, forward it to colleagues for discussion or email it to the developer as a final plan.
As an added benefit, SITEOPS can be used in the site selection process, helping developers choose the most cost-effective alternative among several sites. Without the benefit of optimization software, engineers start to prepare site drawings only after the developer had already invested in the land.
Detwiler estimates that SITEOPS saves an average of $15,000 an acre for new projects. The 2-D design version of the software can be purchased in the form of an annual license for the starting price of $1,995. The 3-D design and grading version can cost from $3,000 to $65,000, depending on the packaging and number of users. The engineers using SITEOPS have to receive special training—which can be done online in up to three days. Developers also have the choice of contracting one of SITEOPS’ certified engineering firm partners from across the country. There are currently seven firms with SITEOPS certification, including Ware Malcomb, Vogt Engineering and McIntosh & Associates.
So far, retailers using SITEOPS include Lowe’s Cos., which helped develop the software in the mid-2000s, Target Corp. and Dunkin Brands. Developers Regency Centers, Jafza International and the Crown Cos. are also Blueridge clients.