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Due Diligence Documentation "Exhibit A-5"
Schematic Phase Design Documents
The following notes
are provided pertaining to this exhibit:
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What: the
proposed Project relies upon a licensed architect to design the to-be-built
buildings and structures in sufficient detail to allow for accurate
replication by the contractor who is acting as the Design/Builder.
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When: the
Schematic Phase Architectural Design Documents are usually completed within
45 days of the date of contract; therefore, the architect must be retained
and set to work as soon as the market feasibility study (see Exhibit
F-3) and the pro forma financial presentation (see Exhibit
F-5) are completed and accepted.
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Why: before
the transaction can be allowed to close on the syndicate financing, the
Design/Builder must be able to provide a guaranteed delivery price for the
project so as to protect the economic interests of the syndication
investors. This requirement is typically interpreted to mean that the
Schematic Phase Architectural Design Documents1
must be completed, as this level of documentation (in most cases) is the
required level of design documents the Design/Builder would use to price up
the proposed Project's construction program.
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Where: at
the pre-construction phase once the market feasibility study, the pro forma
financial presentation and business plan of operations have been completed.
The resulting documents are posted prior to the syndication being permitted
to go live.
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How: Architectural
Design Documents must be completed to a degree that would allow the
Design/Builder to issue a Gross Maximum Price (GMP) Design/Build
Construction Contract with an accuracy to +/- 5%.
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What's important: the
documents must be complete and accurate. The Design/Builder's
acceptance of the Architectural Design Documents plays a critical role in
the construction costing process.
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This exhibit is
not required for syndications of existing properties that do not contemplate
any new construction.
For more information, please contact us at 832.659.5009 or via email at info@realestateplays.com.
1
- there are four (4) stages of completeness for architectural design documents:
Concept Phase, Schematic Phase, Design Development Phase and Contract Documents
Phase.
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