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Gross Income - Operating Expenses
Potential Gross Income - Vacancy Loss
Potential Gross Income
Rentable Area x Rent/sf
Gross Area x Efficiency Factor
Potential Gross Income x Vacancy Ratio
Real Estate Tax + Non-tax expense
Real Estate Tax
Assessed Value x Real Estate Tax Rate
Rentable Area x Expense Ratio
Adjusted Capitalization Rate (Cap. Rate)
(1-LTVR)(D) + (LTVR)(UCR)
UCR (Uniform Capital Recovery per $)
ETPC (Front Door method)
Physical Value + Soft Costs
site + construction costs + hard costs
Vacant Land + Retained Building Cost + Demolition Cost
Site Improvements + remodel costs + new construction cost
Site Area x Site Improvement Cost/SF
Remodel Area x Remodel Cost/SF
New Construction Cost
New Construction Area x Construction Cost/SF
Construction Costs x (Professional Fees + Permit Fees + Contingencies %)
Construction Loan Interest + Other Soft Costs
Engineer's Fee + Architect's Fees
What are the two elements of defining a function?
- active verb
- measurable noun
What does MVO stand for?
Managing Value Objectives
What does SAVEI stand for?
Society of American Value Engineers International
What are the three MAJOR phases (efforts) of the Value Analysis process?
- Preparation Effort
- Workshop Effort
- Post-Workshop Effort
What are the 3 phases of the Preparation Effort?
- 1. Coordinate Project
- 2. Prepare for Workshop
- 3. Construct Cost, LCC, Energy Models
What is done during the Preparation Effort?
- Gathering of all information that will be needed for the Value Engineering process.
- Involves integral collaboration with the Design Team.
- Must establish standards and benchmarks for comparison of the alternatives.
What are the 6 phases of the Workshop Effort?
- 1. Information Phase
- 2. Function Analysis Phase
- 3. Creative Phase
- 4. Evaluation Phase
- 5. Development Phase
- 6. Presentation Phase
What are the 2 phases of the Post-Workshop Effort?
- 1. Implementation Phase
- 2. Final Acceptance
What is Value (as expressed by a formula)?
Value = f (quality, function, cost)
How is quality defined in VE?
As a desired level of performance
How is function defined in VE?
As a specific purpose of something
What is the objective of VE?
To convert design criteria and specs into descriptions of project functions, then relate the functions to revenues and cost.
Design criteria + specs --> Project Functions --> Relate function to revenues and costs
What costs are included/analyzed?
- maintaining, etc.
What is done at the Predesign Stage in VE?
- Define project's functions
- achieve consensus on project direction and approach
What is done at the Schematic Design stage in VE?
- Define or confirm project functions
- verify technical and management approaches
- analyze selection of equipment/materials
- assess project's economical and technical feasibility
What is done at the Pre-bid stage in VE?
- Methods of construction
- phasing of construction
What is done during construction in VE?
Analyze VACP (Value Analysis Change Proposals) of the contractor
How many VA should be done in a project?
Minimum of 2 VA studies, specially if complex or expensive.
What are basic functions?
Those essential to meet the user/owner needs and requirements
What are secondary functions?
Supporting functions that enhance user/owner needs and requirements.
What are the reasons for the budget to be incorrect (from the start)?
- Owner requirements not full considered
- Poor planning/programming
- Schedule not well defined
- Owner predetermines project without an idea of the feasibility
What are ther reasons for the budget to be incorrect (once project starts/budget creep)
- Project scope misunderstood
- Requirements not well defined
- Design team not monitored
- Changes in project/scope not controlled
- Budget estimate was wrong
- Schedule was incorrect
Why is it so important to have an accurate project budget?