From medical centers to schools, roads to bridges, shopping malls to apartment complexes, commercial construction developments have an enormous impact on day-to-day life. However, building such large and complex structures is incredibly complicated. Implementing commercial construction management solutions and techniques is critical to a smooth process and successful delivery.

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What This Guide Covers:

• What Is Commercial Construction Management?
• Commercial Construction Building Process
• Construction Manager Responsibilites
• Commercial Construction Challenges
• Future and Trends

What Is Commercial Construction Management?

Also known as commercial construction project management, commercial construction management refers to the practices and principles construction managers and owners use to ensure that a non-residential sector build finishes on time and within budget. These concepts apply to projects of any size, from subdivision developments to large-scale public works installations.

Commercial vs. Residential

Though they share many similarities, commercial sector construction differs from the residential sector in a few key areas. Usually, commercial projects require different materials, opting for concrete and steel structures instead of the timber-based builds of their residential counterparts. Depending on their intended purpose, commercial builds will need materials that can withstand heavier and more continuous use, such as the flooring of a shopping center or school.

Typically, commercial builds, especially those involving public works, must adhere to multiple regulations set by state, federal or local government bodies. Such projects require obtaining numerous permits, meeting various inspection and quality assurance thresholds, and contracting certified professionals with specialized skills. The complex nature of such construction means projects have larger budgets and more personnel.

Whereas residential construction involves only a few stakeholders, commercial projects incorporate architects, engineers, general contractors and subcontractors, construction managers (CM) and owners.

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Building Process

Though it can vary depending on the wants and needs of the owner, business or public entity, commercial construction projects typically follow the design-bid-build delivery method, where one step concludes before the other can begin, with little to no overlap. No project is the same, and as such, nor is the delivery process. But, by and large, the construction of a commercial development follows the general process listed below.

Conception

The catalyst for a commercial construction project involves the owner, investors or government agency finding a suitable site to build or remodel and obtaining financing. The construction manager will conduct a feasibility study to determine what limitations or difficulties may negatively affect the proposed development and whether successful completion is reasonable within the given time and budget constraints.

Design

Architects and engineers will create the designs, plans, blueprints, systems and other documents to illustrate how the building will appear and function, including safety features, subsurface structures, electrical schematics, plumbing routes and more.

Pre-construction

After finalizing designs, the construction manager will oversee the project’s legal needs, specifically zoning and permits. The selected site will begin preparations for construction while contractors and subcontractors submit bid packages for consideration.

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Procurement

After overseeing the bids, the CM awards contracts to contractors and subcontractors. Also, any needed equipment or materials are acquired.

Construction

The main building phase, wherein general contractors, subcontractors, laborers and departments work together to construct the project. Multiple government or private inspectors may need to assess the job site and the project’s progress, depending on regulations and requirements. Also, there may be a need to acquire new permits or award new contracts not planned during the pre-construction or procurement phases.

Commissioning

Once construction is complete, the manager will evaluate all systems within the project, ensuring they function correctly and meet standards. For example, CMs will test installed heating and cooling, electrical, plumbing and other systems.

Closeout

The final step involves dismantling the job site and removing materials, equipment, waste and other items needed to complete or that result from the construction process. The manager and owner will do a final walkthrough before the owner assumes control of the keys, documentation, manuals, contracts and other items needed to operate and maintain the installation.

Construction Manager Responsibilities

Commercial construction managers oversee every aspect, department and worker in a development’s life cycle, from conception to delivery. As projects increase in scope, scale and complexity, employing a manager with proven construction management experience can save an owner time and money and provide valuable insight into maintaining a safe and efficient work environment.

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Scheduling and Time Management

Managers will create a timeline for project completion, including expected milestones for every phase and aspect of the development. CMs must quickly and accurately reflect how change orders will impact completion times. Construction managers are also responsible for scheduling the delivery of materials and equipment, scheduling the necessary contractors and teams to job sites, forecasting delays or bottlenecks and creating detailed progress reports for the owner.

Budgeting and Cost Management

Construction managers create and maintain a project’s budget, from estimates to procurement and day-to-day expenditures. Usually, a CM oversees the bid process, awards contracts, selects vendors, purchases materials and equipment, and approves contractor submittals. Tools like construction accounting software help managers track and manage daily expenses and monitor cash flow to ensure a project doesn’t go over budget.

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Safety

Proper commercial construction management means maintaining a safe work environment. Construction and material moving continues to be one of the most dangerous occupations, accounting for nearly half of all workplace fatalities in 2020, according to the U.S. Department of Labor.

Managers must create an emergency plan and safety manual, accurately document and report incidents, manage compensation claims and ensure that all contractors, subcontractors and other laborers adhere to safety regulations and wear personal protective equipment.

Consulting

It’s not uncommon for project owners and investors to be inexperienced or entirely new to commercial construction. Years of commercial construction management expertise allow CMs to provide critical insight into every step of the building process. A manager’s connections and prior history with designers, vendors and contractors can be particularly valuable during the conception, design, pre-construction and procurement phases.

Representation

Once hired, a manager represents the owner throughout the life of a project. When making decisions, the CM first considers the needs and expectations of the owner. Typically, the construction manager will handle communications with the general contractor, contractors and subcontractors on behalf of the owner.

Commercial Construction Challenges

As if the day-to-day challenges of commercial construction management weren’t enough, commercial developments and remodels face new and continued issues, like material costs, labor shortages and increasingly complex builds.

Rising Cost of Materials

Unfortunately, the expected rebound of supply chains from the impact of COVID-19 has yet to occur, and markets and materials costs continue to feel the effect. According to the Associated Builders and Contractors, non-residential construction input costs have increased 21.9% since last year.

Construction managers and owners must be flexible and creative to minimize extra expenses incurred from unexpected changes in material availability, price or delivery delays.

Lack of Labor and Skilled Labor

Though current national unemployment numbers are comparable to those at the beginning of 2020, not all sectors have recovered. As of October 2021, unfilled construction positions reached the second-highest level since 2000, with managers needing to fill over 400,000 jobs. The construction labor shortage may worsen as public sector infrastructure projects and opportunities increase in the coming years due to the Infrastructure Investment and Jobs Act.

Also, expect an increase in demand for more knowledgeable and skilled workers as owners, superintendents and others in commercial construction management embrace big data and new technologies. However, such labor is rarely specific to construction practices, and competition for individuals with expertise in these areas will involve multiple industries.

Growing Complexity

Besides the new technologies within the industry, commercial construction management will become increasingly complex, creating accommodations within new and current buildings to utilize new technologies and advancements in the medical, dental, educational, automotive and other industries. Owners and managers will need to consult with experts across sectors to ensure their projects can accommodate more complicated and diverse purposes.

Also, breakdowns in communication can lead to mistakes, rework, delays and other issues that negatively impact budgets and timelines. As more outside industry consultants and specialized laborers become involved in designing and constructing a project, efficient communication among stakeholders will grow increasingly difficult.

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Future and Trends

The last few years have seen a dramatic change in the construction industry. To stay competitive, those in commercial construction management positions must embrace new industry trends in technology, incorporate sustainable materials into their projects and prepare for a surge in public sector projects.

New Technology and Data-Driven Decisions

Commercial construction management teams are utilizing new technology to streamline processes and help bottom lines. Construction management software allows contractors and subcontractors to provide up-to-the-minute updates from the site, giving managers and owners the most current information to make informed business decisions, automate time-consuming tasks and instantly communicate with all stakeholders.

New hardware is dramatically changing how companies and firms do business, allowing one person to perform the job of a team. Drones quickly survey sites and monitor progress. Wearables, like smart PPE and clothing, integrate with the Internet of Things and give real-time health and safety alerts about contractors in the field. Virtual reality, augmented reality and building information modeling make designs and blueprints interactive and comprehensive.

Green Buildings and Sustainable Practices

Architects and engineers design green buildings and green remodels to minimize their carbon footprint, from construction materials to the systems used. Solar panels can provide clean energy to schools, hotels or apartment complexes. Recycled metal is an eco-friendly, cost-effective building material that doesn’t burn or warp, and cross-laminated wood is a lightweight material sturdy enough to replace steel or concrete.

Incorporating green building practices can reduce waste and improve bottom lines while benefiting the environment. Modular construction, such as 3D printed buildings and forms, eliminates weather-related delays and can be performed simultaneously with on-site operations. Recycling concrete and other materials from the job site can eliminate disposal fees and receive points toward a LEED green building certification.

The growing demand for renewable energy and resources provides a rare opportunity for those in commercial construction management. Verified Market Research projects the green building materials market to grow from $271.9 billion in 2021 to over $635 billion by 2030. Early adopters of sustainable materials and practices will have the knowledge and networking to gain a competitive advantage in one of the fastest-growing markets.

Increased Public Sector Demand

With the Infrastructure Investment and Jobs Act passing in November of 2021, over $1 trillion is entering the construction market, including $550 billion in new spending in the next decade. The bill provides funding for constructing and remodeling bridges, roads, public transportation, airports, broadband expansion and other public sector projects. The new infrastructure dollars allow more public authorities to compete for funding and begin construction on new projects.

Effective commercial construction management will require managers and owners to navigate the regulations necessary to obtain funding. Requirements, such as using only domestically-sourced building materials, may force CMs to utilize different vendors and anticipate possible delays or shortages due to increased demand for domestic materials.

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Conclusion

Successful commercial construction management requires effective and efficient planning, organization and communication from the conception of a project to its delivery. Though rising materials costs, labor shortages and increasing complexity threaten the feasibility of developments, implementing new tech and greener construction practices will ensure a profitable future for companies and firms in the years to come.