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Inward Investment Guides
Total Project Cost Overlooked During Site Selection Process
Question Originally Asked Here:
Why don't some businesses consider the total project cost when it can add a significant amount to the initial purchase price? Also, have you noticed if companies today are more likely to move to an existing facility and renovate or build a new facility? Why do you think one is happening more than the other?
 

Bob McCain, PE, Principal, Division Manager of Industrial Facilities, SSOE Group
Depending on the organization, project construction and operational costs are not the responsibility of the real estate group and therefore can be overlooked. Project construction and operational costs are also not always known during the land acquisition phase. This is especially true if the process is a new or modified process. These details may not be fully developed until the actual design and construction have begun.

There appears to be a greater number of companies looking to renovate facilities due to the amount of real estate available. Companies are also trying to take advantage of the current construction pricing pressures that can cause them to accelerate their project schedules. A fast tracked project schedule will typically cause an owner to assume that an existing facility and renovation is the best way to meet a schedule. Depending on the location and the amount of local community support, a new facility can be constructed on a similar schedule and constructed to meet the owner requirements.
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