Representing the project owner, a real estate developer, we negotiated a multi-phase guaranteed maximum price (GMP) agreement totaling about $8 million for the historic renovation of a substantial commercial building. A phased approach – essential due to ongoing design development – allowed construction to begin with Phase 1 while the architectural and engineering drawings for later phases were finalized. Phase 1, encompassing interior demolition, masonry openings, and pre-construction, had a GMP over $1.25 million. Phase 2, addressing exterior masonry restoration, carried a GMP of some $325,000 plus unit price work for unforeseen repairs. Phase 3, the most extensive phase, focused on the interior build-out with a GMP of more than $6.5 million. The project’s complexity was reflected in the detailed agreement terms, including provisions for allowances, contingencies, and a phased buyout process, with the potential for our owner client to share savings under the GMP with the contractor. The conversion from retail to loft office space, coupled with the historic nature of the building, presented unique challenges requiring careful coordination between design and construction agreements.
