I get asked a lot about commercial construction trends. With the way the commercial real estate market has been the last several years, people are looking to commercial construction experts for the best construction tips on how to proceed with a successful new retail development. Recently someone asked me: “What is the best retail center to build today?”

If only there was one answer to that question. In today’s market, this has to be approached on a case-by-case basis. A new retail development that may work for one market might not transfer to another.

It doesn’t matter what kind of new shopping center construction you desire–whether it is a Power Center, a Lifestyle Center, or a strip mall in a high-traffic infill location–nothing will be built unless the numbers make sense for the commercial construction budget.

This is different than the heyday approach of “build it and they will come.” It’s no longer possible to assume what retail tenants and consumers might like and to undertake a new retail speculative development. Too many retail developers got caught without a chair when the music stopped in that scenario.

Today, it takes careful planning, cooperative partnerships, and the right market data to bring a new retail construction project to fruition. That is why a general contractor’s pre-construction services have become more important than ever.

The best national commercial construction firms can provide developers with the proper cost analysis of a potential development, based on area historical data. At Englewood, we have data points that go back for decades on commercial construction costs and leasing rates for areas across the country. Each municipality brings its own costs, and different market cycles bring different lease rates. A developer should always know the history of a construction site before they decide to do business there.

Construction budgets can make or break a deal. Recently, we were performing a pre-construction analysis for a retail client on a Chicago-area property. Our data report helped the developer determine the lease rate that could be achieved on a retrofitted commercial space. Armed with our data, the client was able to secure Buy Buy Baby as a tenant and the deal worked out financially.

Of course, sometimes pre-construction services can work against you. Even in situations where the stars seemed to be aligning–a property is available, a tenant is secure, and financing is achievable–the numbers can quell the deal.

We used to represent Advanced Auto Parts and a commercial developer asked us to quote new retail construction for the auto franchise at a shopping center development. Advanced Auto Parts was excited about the location and the developer wanted the tenant. Unfortunately, when we delivered the cost analysis, the developer said that he couldn’t make the deal work.

Don’t get me wrong, we always want to see the deal get done, but we would never compromise the numbers or skimp on quality just to get the job. That would be doing a disservice to our clients and our good name. Being honest with clients when estimating construction costs doesn’t tarnish a relationship, it strengthens it. There could always be projects down the line that make better sense for all parties.

So keep in mind, the best general contractors may not always give you the numbers you want to hear, but they are the numbers you need to hear to make sure you are building the best retail development in the best location.

www.englewoodconstruction.com