7 Misconceptions about Commercial Building Construction Projects

Having worked in design-build and commercial construction since 1978, our construction team has heard a lot of questions, comments, and a few misconceptions about commercial build projects.


We would like to share with you some of the misconceptions we have heard over the years regarding commercial build projects and bring some clarity to this topic. Take a look at the following misconceptions and each of our responses.


Seven Misconceptions

1. Building a commercial building can take a really long time.

Reply: The length of time it takes to build a new building initially depends on three major factors, which include: design, site selection, and financing.

With regard to the design of the structure, if an owner has a clear idea of their wants/needs/goals, the initial design can go rather quickly. This process may also depend on who is making the decisions. How many decision makers are involved? Does an individual make the decision, or will it take multiple committee meetings to make a decision on the final design? These all play into the amount of time it takes to determine the final design of the building, which is the origin of future activity (like competitive bidding and overall project budgeting).

The site selected also factors into the overall time it takes to build a commercial building. If, for example, a site is “shovel ready,” which according to the State of Minnesota’s Department of Employment and Economic Development (DEED), means “planning, zoning, environmental studies, title work, public infrastructure and other pre-construction activities have been completed on the site,” a project may begin sooner. The idea is that the site is as ready as it possibly can be and construction may begin upon purchase of the site. If, on the other hand, the site is considered “raw land” there will be more time involved to go through the various processes to get that similar parcel to the same stage.

 Thirdly, getting financing in place will contribute to the time it takes to start a new project. Surveys, title work, appraisals, and any other lender required activity, if not already complete, in addition to the underwriting process, can all have an impact on the time it takes to get the project off the ground. Working with a reputable lender, who understands the commercial building process can make a world of difference in the length of a project. The sooner the choice of lender is made, the sooner the process can begin.

 With regard to overall timing of a new project, a typical new construction project can range in time from months to as much as a couple of years, and as stated previously, depends on many factors. Our advice is this…you can never start the process too soon.  


2. It is better to buy an existing building than to build new.

Reply: For some business owners, this may indeed be the case. Again, there are a variety of factors that play into this decision. These factors may include: geographic location, zoning, proximity to competing business, price, municipal support, and many more factors. A business owner may find that existing buildings simply do not exist in an area of interest, satisfying all items on their “wish list.” In these cases, the only option may be to build new. The age, condition and amount of demolition, renovation and improvements should be identified and compared to a new build.

 3. The property taxes are higher on new construction.

Reply: Actually, the first year taxes will be based on land only (verses land and improvements) and will be lower, as a result. The next year’s taxes will be based on both land and improvements at a rate determined by the local taxing authority (State, City and County), and based on assessed or “estimated market value.” This rate is not higher than other existing buildings, nor is it higher simply because it is “new”, but it will typically, at least in the state of Minnesota, be higher than a residential property tax rate. Additionally, there are sometimes incentives available which may lessen the initial tax burden for companies in exchange for a new building which brings new tax revenue for a community, as well as the promise of an increase in jobs. An example of this is TIF, which stands for Tax Increment Financing and is sometimes used by various cities to create a TIF district to encourage new development (both residentially and/or commercially), or in some cases for existing businesses to stay and add onto their building (and staff). This activity benefits all involved including the city with increased tax revenues and increased employment rates within their community.


4. Projects always cost more than originally estimated.

Reply: Pricing a new construction project will always vary from company to company. We can only comment on our company’s methodology – which is an open book policy and the process we use to convey pricing to our clients. The team at APPRO takes great pride in providing a clear and transparent approach to our construction estimates. Our goal is to provide the most accurate picture for owners so that they can make an informed decision. We recently had an example of a bid in which we came in second. While we were disappointed we did not win the bid, we felt we were accurate and honest with the applicable costs. Later, the owner approached us to let us know that he thought he had made a mistake by not working with our team. While the other company was lower in their bid initially, they ended up adding costs during the construction process, and they ended up higher than our initial bid. We aim to be accurate and forthright in all that we do in order to avoid frustration or disappointment down the road. We believe that our long history of repeat customers, who have appreciated our upfront approach, speaks volumes in this regard.

 5. Projects always take longer than originally estimated.

Reply: Once the major aspects of design, site selection, and financing have been completed, the actual construction process may be determined. From the onset of a new project, our team creates a key event schedule which lays out all of the necessary steps to get a project under way. Outside of issues like unforeseen weather, a supply shortage, or owner initiated changes to design or materials selected, a construction project can be easily summarized into an overall construction schedule. Our goal is the same as that of our owners – to complete the project on time, and on budget.

 6. The city process is next to impossible to navigate.

Reply: Each city has different nuances in their approach to a new building project, but overall the main steps are the same. City process on a new building project typically includes a preliminary development review, then zoning, land use reviews, platting process (if un-platted), construction permit review and construction plan review, and construction inspections, before a final certificate of occupancy inspection upon construction completion. We understand the process and every step along the way, and our team expertly helps each of our clients through the process.

 7. Land prices & building materials are priced so sky-high, you really can’t afford to build new.

Reply: Land prices across the metro area vary, based on location, size, platted vs. un-platted, and zoning. Concerning building materials, items to consider are concrete (used in foundations, tip up panels, etc.) and structural steel. These are what we refer to as “long lead items” and are typically the largest costs in a commercial or industrial new construction project. While in years past, the cost to build new far outweighed the cost to purchase an existing commercial building, more recently, we have seen valuations on existing property increase, and the supply of existing buildings begin to diminish. The lower existing inventory at increased valuations, coupled with low interest rates for new projects, might make now an ideal time to start a commercial build project.


If you think you might be interested in starting a new building project, we encourage you to meet with our team. Our process is pretty simple, and begins with a short meeting in which we listen to your needs, and then determine next steps. We are here to help.


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Property Improvements: Are You Missing an Opportunity for Potential Tax Savings?

Property Improvements: Are You Missing an Opportunity for Potential Tax Savings?

By Jack Matasosky
Property Improvement - Potential Tax SavingsIf property improvements are on your mind, you might want to check out this recent article by Mark Colvin. According to his recent article, “Don’t Miss the Potential Tax Savings on Property Improvements,” “businesses that have made recent improvements to their property may be eligible for tax savings.” A recent IRS ruling is the source of this article commentary clarifying when an expenditure qualifies as a deductible repair and when it should be treated as a capital expenditure. […Continue Reading the Full Article]
As with all tax related topics, please consult with a tax and/or accounting professional for advice on your unique business.

If you are considering property improvements for your business, please feel free to with any questions you may have.

Commercial Building – Suggested Maintenance Checklist

Commercial Building – Suggested Building Maintenance List

Commercial Building Maintenance - Lakeville Driveway Project 09122013 (1)Commercial building ownership comes with a long list of maintenance items to keep your building in the best possible condition. We understand you are proud of your investment. So, the team at APPRO Development created a “Suggested Maintenance / Service Letter.” We provide this letter to each of our building owners upon the completion of the construction of their building, addition or expansion project. We hope this will serve as a starting point to keep new buildings in optimum condition.

You may see the checklist by going to our “Resources Page” or clicking on the link HERE (the Building Maintenance Form can be found under “Resources for Building Owners”).

You have made a significant investment in the construction of your building, addition, or expansion project. We want to make sure you keep it the best it can be.

If you have found you need assistance with your building maintenance, feel free to give our team a call. Our expert project managers will walk you through a possible solution. If necessary, we would be happy to refer you to a trusted resource to continue the conversation – we work with only the best subcontractors in the commercial building industry. We are easily reached online, in person, or by phone.

Roof Alert! Avoid Roof Collapse

Roof Alert! Avoid Roof Collapse

Avoid roof Collapse Image Source: by jnaithani via flickr (orignal, no alterations made)

How to avoid roof collapse is an all too serious consideration for commercial property owners. At this time of year – it is important to observe the amount of snow on your facility’s roof. The snow we currently get is very wet and heavy in nature, and can sometimes pile up and exceed the designed structural capacity of the roof system.

This is especially true where “high / low” roof conditions exist – allowing snow to fill in the space next to the wall separating the two heights. The snow tends to melt from the bottom up, refreezing in the form of ice, and not visible due to the snow above. It is not unheard of – to find the lower third of the snow drift is in fact – solid ice.

It is also very important to keep roof drains and downspouts open – as they continuously go through a “freeze / thaw “ process.

A salt lick, purchased from the local hardware or feed store can help drastically. Place the block (s) on a small piece of wood or plywood, near the roof drainage points on your roof.

Watch closely, from the inside of the building for deflection ( sag ) of the roof structure , and observe the roof from above for pooling of water and ice .

If you have any questions or concerns – please call us – and our team at APPRO Development can refer you to competent help with these or any building issues.

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Wood Framing in Commercial Construction

Curious about wood framing in commercial construction?

Wood Lumber Framing in Commercial Construction article by APPRO Photo Source: Wikepedia, 2013.

Occasionally, changes in wood supply cause a downgrade in the structural properties of wood. You can see an example of this type of activity in the article at this link for the information put forth by Carolinalive.com at: http://www.carolinalive.com/news/story.aspx?id=674670.

The angle this particular news story takes is to focus on the economic impact that may occur to the industry in the area or state. The steel framing industry association presents this info in a different light entirely by promoting the properties that steel framing members include.

I believe it will cause a trickle-down effect to consumers who will have to, in some instances, be required to use larger wood framing members than in the past to get the same job done. This affects us all when it comes to residential or commercial building when wood is the chosen material.

Interestingly enough the wood groups aren’t necessarily arguing the downgrade itself, only how quickly it is being proposed to be put into effect.

Both steel and wood association groups tout the sustainable properties of their products. It will remain to be seen how each product continues to be affected and the impact on residential or commercial construction.

If you’re not sure which material is right for you on your next project, contact our team at APPRO. We have been helping our clients make these types of decisions for more than 25 years, and we would be happy to help you, too!


Design Ideas and Architectural Innovation

Do you ever come across a new idea and find yourself amazed at the creativity of another? I think we have all found ourselves. For us at APPRO, it is what keeps each of us striving for excellence.

At APPRO, we are constantly looking for new ideas to make the buildings we design better for our clients in the Midwest region of Minnesota and North Dakota. In the process, we come across a lot of information and very often we find ourselves marveling at the creative work of others in our field of architectural design and commercial construction. This week, we came across some pretty cool ideas in architecture and design we would like to share, in the hope that you too, might be a little amazed.

The first idea is a simple design for a 45 degree catch hinge. It is just a simple piece of hardware, right? But, if you have ever had your arm caught on a hinge that extends beyond the door, you know why this is such a great design! Click on the picture or the link below to review the full article.


The next innovative architectural idea is a staircase that is both fascinating to look at and inspiring in its origin. With an understanding and appreciation for the architecture of a whale’s spine, the designer of this staircase found inspiration and brought it into the design of this staircase. How cool!


The final item we wanted to share is a new feat for architectural design and construction. “In what will be a world first, Dutch architecture firm Universe Architecture is planning to construct an entire house using a 3D printer” according to a recent article by Angela Fedele, for Architecture Source, 2013. The technology and innovation is awe inspiring and quite a visual marvel. While the commercial construction industry is quite a ways from regularly utilizing this type of technology, the innovation is indeed inspiring. To read the entire article, click on the picture or the following link: http://designbuildsource.com.au/dutch-architecture-studio-to-build-3d-printed-home.

Inspiration for a new idea can come from anywhere –like changing a piece of metal 45 degrees to further improve an existing product, to marveling at nature’s design and incorporating it into the construction of a building, or being the first to design and build a structure utilizing ground breaking technology. Do you have an innovative design idea you would like to share? Our architectural design team would love to chat with you to find out what inspires you!

APPRO Development, Inc. is a full service design build company with an in house architecture and design team that is ready to create a property solution for you…with you! Contact us today for more information on design ideas for your next commercial building project