What we read
The qualifications page, allowance schedule, procurement log and change order terms. Usually under forty pages, and they hold more of your exposure than the model.
Home Who we work for Developers
A GMP review for developers who carry every gap in the price
Your contractor built the number up and is asking you to accept it as a ceiling. Every allowance that lands high sits on your equity, not theirs.
Why it happens
Why a GMP review for developers is measured against the promote
A cost increase that looks small against the contract looks very different against the slice of return above the preferred return.
The overrun lands on thin equity
Two or three percent of project cost can remove most of a promote, because the promote sits on the top slice of the stack, not the whole.
The lender asks first
A construction lender will ask what the contingency covers and how much of the price is bought. Those answers are in the exhibits.
The date is not yours to move
Lease up, loan milestones and partner commitments fix the signature date. Whatever has not been read by then is accepted as written.
The position you are in
The number was built by the party you are buying it from
Your contractor assembled the number and is asking you to accept it as a ceiling. That is a reasonable request and it is also a request to accept a definition of scope you did not write.
Every allowance that lands above the figure carried, every exclusion nobody added up and every qualification that moves scope back to you arrives on your balance sheet. The guarantee is real. Its boundary was drafted by the party giving it.
The arithmetic is unkind to the sponsor. A cost increase of two or three percent on total project cost can remove most of the promote, because the promote sits on the thin slice above a preferred return rather than on the whole stack.
What you usually ask us
The four questions we hear most
Every one of them is answerable from documents you already hold, which is why the reading runs without asking the contractor for anything.
- Is this number defensible to my equity partner?
- Which three items would you reopen, and in what order?
- What does the contingency actually cover, and who keeps what is left?
- How much of the price is bought, and how much is still an estimate?
How it works for you
What we read, and what you get
What you get
A register of open exposures ranked by dollar value, each with a page reference and a position you can take into the last conversation before signature.
When it runs
Five to ten working days for the largest exposures, two to three weeks for a full reading. Both run alongside legal and lender work rather than after it.
Written for you
Three pieces from the same desk
Short notes on the mechanisms behind the questions above, written from the owner side of the contract.
How an overrun moves through the equity waterfall
The questions your lender will ask
What signing under time pressure costs later
The questions your lender will ask
What signing under time pressure costs later
What you end up with
What you take to your equity partner
A number you can defend, and the three items you would reopen.
Exposures ranked by dollars
Each with a page reference, so the conversation with your partner is about specific lines rather than a general concern.
Answers for the lender
What the contingency covers, what is still estimated, and what the change terms allow, written before the lender asks.
Positions for the last meeting
The items worth reopening before signature, and the order in which to raise them with the contractor in the last meeting.
The other three
One position, four different rooms
The register is written the same way every time. What changes is who the memo has to survive being read by. The overview page sets out all four side by side.