Cornus House Year End Update

Schedule:

Expected completion of Cornus House remains December 4, 2024. Early in 2023, the project ran into several unforeseen soils issues, but the team has performed admirably, making up considerable time. The concrete structure moved along efficiently, and the framing was completed faster than expected. We credit much of the time savings to offsite wall panelization & early coordination. MEP rough in has progressed to the upper tower floors, and metal stud framing has completed on the lower levels. ALL the major lead time materials have been procured and are being stored, including roofing insulation, building transformers, electrical switchgear, breakers, cabinets, windows, and the elevator gear. The project is 280 days without a lost time injury and will continue to prioritize site safety while attempting to make up additional days.

• Key Milestones from 2023:
  • Erect crane 03/03
  • Slab on grade placement 06/22
  • Concrete L4 topped out 10/05
  • Wood framing complete 12/28

• Key upcoming dates
  • Roofing to begin 1/15
  • Window installation 1/29
  • Siding installation 2/26
  • Elevator completion 6/12
  • Finishes completion 10/29
  • C of O 12/04

Progress Photos:

Pouring the “rat slab” foundations

Placing the L3 concrete

Sawcutting the slab on grade

Concrete trucks line up for L4 final pour

View from Pacific & Commerce

Budget:

Overall, the budgets are looking strong with contingencies held both at the owner, and the GC level, far exceeding the forecasted risks. Owner has utilized some contingency & GC buyout savings to cover “value adds” which support a better tenant experience, a quicker lease up, and more durable building. The supply chain and escalation budget concerns in 2022 when the GMP was executed, have largely been avoided. We entered a market in the middle of 23’ and into 24’ where the vendors/subcontractors are hungry for work, and the 20% markups have all but disappeared. This is beneficial to Cornus as buyout savings continues to increase, and the risk of procurement issues diminishes.

• Value-Add to the project:
  • Replaced 2cm countertops for 3cm. Higher quality, more durable.
  • LANZ cabinets vs Frontier. Higher quality cabinet manufacturer.
  • Higher MM vinyl flooring product, shorter lead time, sturdier.
  • Vinyl floors added to L1-L4 units vs exposed concrete floors. Carpet tile also added to corridors vs exposed concrete.
  • AC ports added to all units.
  • Cabinets & end panels added around unit fridges. Addition provides more tenant storage and a better unit aesthetic.
  • Exterior paint upgraded to product with lengthier warranty & more durable.
  • Design & buildout of retail spaces. We feel it’s vital for retail leasing, to bring the (3) spaces to a warm shell, with bathrooms fully finished, and “move in ready.” An activated street front and retail presence will drive unit leasing demand.

• Change orders:
  • $369,360 in accepted change orders
  • $14,242 accepted change orders due to design errors
  • $108,858 accepted change orders due to owner adds
  • $234,966 accepted change orders due to unforeseen conditions
• Contingency:
  • Owner ~3% total contingency
    • $110,689 Soft cost contingency remaining
    • $477,406 Hard cost contingency remaining
    • $59,000 Hard cost contingency in hard cost line item
    • $500,000 Additional owner-controlled project contingency

• GC ~2.8% total contingency
  • $250,000 Buyout savings
  • $500,000 Contingency
  • $152,000 Escalation contingency (owner controlled)
  • $100,000 Allowances unspent due to better buys (owner controlled)
• Forecasted budget risk
  • Right of Way Impacts: The public right of way has proven tricky, with multiple instances of underground piping appearing, but not shown in survey’s or city records. All the scope along Commerce street (water main extension) is complete, and 1/3 of the work along 25^th is complete. We forecast between $50k-$75k potential impact
  • Retail space: We intend on building out the retail space to a “warm shell” spec. $150k was set aside for this in the owner hard cost already. We are assuming a potential $20k-$30k impact above and beyond budgets. Bringing the spaces to warm shell/move in ready, will allow tenanting to begin earlier, which will drive the unit leasing. We also want to avoid TI allowances to future tenants.
  • Interior design misses: We forecast various design coordination misses on the interior space requiring contingency at between $50k-$70k

As always, I am available for any questions, clarifications, or jobsite tours. Please feel free to reach out

Alec Thomas

Great Expectations