What does it cost to build?

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Aug 10, 2003



It depends how big you build—and on the site fees, appraisals, zoning fees, and interest rate. Here's help with your estimate.

While you might think that the land cost would be a huge chunk of the budget you'd spend on a new practice, the site should actually total about 18 percent of your total costs. Construction costs make up 68 percent of your total, according to Larry Gates, principal of Gates Hafen Cochrane Architects, a veterinary design firm based in Boulder, Colo. And some extras you may not even think about fill out the list. (See "Where does the money go" below.)

Obviously, your square footage, materials used, zoning fees, and other decisions affect your final costs. And your colleagues are building all sizes of clinics, from the 12,760-square-foot 2003 Hospital of the Year to the 1,870-square-foot Best Small Hospital. For the 2003 Veterinary Economics Hospital Design Competition, the average size of the 11 winning facilities was 6,774 square feet. The average construction cost was $120.39 per square foot, with an average total cost of $1.4 million.

Wonder what goes into the total bill? See the sample pro forma for a 4,000-square-foot practice below, and adjust the costs based on your community and the practice you plan to build.

Where does the money go?
While building costs eat up most of the budget, you also need to consider such issues as land cost and architectural fees. Here's the breakdown:

68% Building cost
18% Land cost
8% Architectural and engineering fees
3% Contingencies
3% Interest, insurance, and fees

Pro forma
Sample costs: 4,000 square feet of hospital
Hard costs:
Land..........$150,000
Building costs:...........$600,000
Building size= 4,000 square feet
Cost per square foot= $150
Total hard costs.........$750,000

Soft costs:
Architectural fees.......$42,000
Engineering fees:
Civil (survey, soils, and drainage)....$7,500
Structural..........$7,500
Mechanical.........$9,000
Electrical.......$4,500
Regulatory and utility development fees:
Water/sewer tap fees...........$3,000
Financing:
Appraisals..........$4,000
Construction loan:
Points.......1%.......$6,000
Interest rate......8.25%....$12,375
Permanent loan
commitment.....1.5%.....$9,000
Closing costs?...........$4,500
Contingency......3%?......$21,280
Total soft costs.........$130,656

Total project costs?.........$880,656
Source: Gates Hafen Cochrane Architects, Boulder, Colo.