6 Questions and Answers for Retail Construction Management: A Comprehensive Guide

N3 Real Estate offers a diverse array of commercial real estate services, focusing on the retail sector. The services include, but at not limited to, retail construction management / retail real estate development, build-to-suit development, project leasing / marketing, and retail brokerage and advisory. Our professional CRE experts deliver cost-effective retail sites, spaces, new developments, and conversions of assets throughout the United States. To help navigate this intricate and evolving market, we asked our specialists to create several guides regarding retail CRE. This is part of a commercial real estate information series that covers many topics from net leases, to CRE developments, valuations, tenant rep, and more.

The following is an overview of retail construction management, covering the top six questions you may be asking yourself as you embark on a new project.

What is retail construction management?
What is the construction management process?
What are the 5 phases of construction?
What are retail projects?
What is a retail construction project manager?
What are the latest retail construction management projects completed by N3 Real Estate?

Read on to explore the answers to these key retail construction questions and discover how we can provide expert guidance through the entire process.

1) What is retail construction management?

Retail construction management is the practice of overseeing, directing, and coordinating human and material resources throughout the entire lifecycle of a retail construction project to achieve agreed-upon objectives, including quality and safety standards, scope, budget, and timeline.

This process can be quite complicated as retail construction projects vary widely and are subject to a long list of financial, environmental, and legal considerations. Projects can involve entitling and developing raw land, refreshing aged structures, tackling tricky soil conditions or landscapes, planning around flood zones or wetlands, and much more.

As part of the creation of retail sites, spaces, new developments, and conversions, the retail construction management workflow involves market research and intelligence, site selection, diligence, entitlements, negotiation, permitting, construction, project handover, and post-operational activities.

2) What is the construction management process?

The entire lifecycle of a retail construction management project extends much further than just the construction phase. Generally, the process can be divided into these six phases:

Initiation, conception, and design: Stakeholders come up with idea for the project, research locations, set standards for work, and set deadline for completion. Then they share this information with an architect or engineer to create a blueprint (with construction project manager oversight to help resolve issues during ideation). Feasibility, design schematics, and contract documents must be covered. Once finalized, they get the word out for a design, bid, and build contract to be filled. (Other bid types include design-build, integrated project delivery, or integrated labor delivery.) Then, the stakeholders evaluate bids and select the best fit. Planning begins to select the site, obtain permits, and apply resources most effectively.

Pre-construction, planning, and procurement: This is preparing for the execution phase and includes developing the project management plan to define scope, identify key performance indicators, create detailed list of deliverables, create work breakdown, set schedule, create budget (covering all deliverables and work breakdown for both material and labor costs), set quality standards, create HR plan, organize a stakeholder list, form a communications plan, outline procurement process, and procuring materials. This phase might also include preparing risk assessments, forming project and worker teams, and site examinations such as soil testing.

Launch, execution, and building: This is the construction phase that brings the blueprints to life. It includes delivering and managing materials, monitoring work and costs, gauging performance against standards and goals, keeping project on track to meet deadlines and budget, maintaining a documentation and records management system, and following the risk management response plan as needed.

Commissioning, documentation, and handover: Once construction is done, the next step is to verify completion of all tasks in work breakdown and deliverables, and that KPIs and quality standards have been met. Accounting is finalized and the handover process to project owner is initiated. This process includes providing schematics and operation documentation, testing systems, correcting errors, training owner’s staff on operation and maintenance, and documenting the process for the warranty period.

Owner occupancy and warranty period: During the initial occupancy period as the new building owners and/or their tenants move in, two types of warranties come into play. Contractual warranties were included in the contract to cover the systems and structure of the building. Implied warranties were included in laws governing the building. The warranty period is designed to guarantee that the construction meets expectations.

Wrap-up, review, and closeout: Once all contractual responsibilities are met, the last tasks are completed, which may include undertaking a performance or construction review, filing important documentation for future reference as needed, and preparing a report on successes and lessons learned for continual growth and improvement.

3) What are the 5 phases of construction?

While the entire retail construction management process includes several complex phases, the actual construction process that takes place within this project lifecycle can be summarized in five distinct stages that end usually with the completed build. These include:

Need: This is when a need is identified, the project is conceived, and goals are defined.
Design: The site plan, civil engineering and architectural plans are created.
Definition and planning: All applicable parameters are set in terms of cost, timeline, safety, quality, and scope. Plans for budgeting, scheduling, and resource management (both human and material) are set. Materials and teams are procured.
Construction: Sometimes this stage includes two concurrent phases: project launch or execution and project performance monitoring.
Project close: Once construction is complete to the satisfaction of all parties, this stage involves cleaning up the worksite, paying all invoices, closing contracts, handing and filing documentation, and preparing reviews of the process for future reference.

4) What are retail construction projects?

Retail construction projects can vary from small stores within shopping plazas and malls to big-box retail spaces and standalone stores. For franchise and multiple locations, branding and design consistency are key, so changes at corporate flagship level are then mirrored across all locations in refreshes, renovations, and interior updates.

Every retail construction project is different and subject to a wide variety of factors that impact its outcome.

Project construction sites include:

Standalone retail sites often with single tenants.
Strip malls, shopping centers, and shopping plazas, which tend to be smaller properties with a mix of small retailers that sometimes include notable tenants as a draw (such as a supermarket or pharmacy).
Community retail centers, which are larger with multiple anchor tenants and usually one restaurant or more.
Power centers are the next step up in size and include smaller retailers with big-box stores as anchors and then have parceled out land for standalone tenants that require drive-thru space (such as banks or fast-food chains).
Lastly, regional mall projects can be millions of square feet.

Types of work include:

Build-to-suit – Hiring developers who supply capital, development expertise, and construction resources to build new free-standing stores and strip centers from the ground up.
Buildouts or interior fit-outs – Demolishing a space within a building to rebuild one per new tenant specs.
Storefront – Remodeling the façade and front area or entrance of a store to increase appeal and draw more customers.
Remodels – Renovating or doing upgrades to an existing space or building.
Rebranding – Updating the look of a space to be consistent with brand changes.
Sustainability – Applying green technology to make a space or building more environmentally sound and energy efficient.
Turnkey – Hiring a contractor or construction firm to build or remodel a property with the goal of selling it. The turn-key development process tends to be all-inclusive, covering project kick-off, market analysis, site selection, design entitlement, permits and bids, project funding, construction, and delivery of finished space.

5) What is a retail construction project manager?

Generally, a retail construction project involves four main players:

The owner who has commissioned the work.
An architect and/or engineer who is responsible for the design.
A general contractor who directs the daily work and oversees subcontractors and other vendors
A retail construction project manager (CPM) who works on behalf of the owner to oversee the entire project to ensure it meets specifications of timeline, quality, scope, function, safety, contractual obligations, and cost.

A retail CPM must have contractual and close-reading skills as well as be a strong communicator to build relationships, manage expectations, and keep stakeholders updated and in the loop. The main responsibilities include managing the following:

Contractual obligations: Obtain, interpret, review, and track all construction documents and permits. This also includes feasibility studies and real estate due diligence. CPMs oversee and bear responsibility for successful completion of a project in compliance with the construction contract and meeting all performance objectives outlined therein.
Budgeting: Estimate costs, create and manage budget, and ensure the project remains on budget. This also includes value engineering, cost forecasting, finance and accounting support, and reporting.
Scheduling: Set up schedule, communicate and update as needed, and ensure project remains on schedule.
Key performance indicators: Define parameters of execution, identify and communicate scope, ensure the project meets quality standards, establish and measure metrics of success.
Design: Coordinate the design process and facilitate the design evolution.
Communication: Work with and inform stakeholders, deliver weekly site progress reports, keep workers and teams informed about contract terms, and facilitate communication with other stakeholders.
Resources: Allocate resources responsively and effectively; ensure the contractors receive all construction materials, equipment, and fixtures and that they need; inspect for damage; reconcile quantities received with purchase orders; and submit reports per established procedures.
Feedback: Ensure best practices are followed via continuous process development and improvement. Offer feedback and improvement suggestions to work team, and provide performance feedback about contractor, consultant, and vendor teams to project owner.
Site activities: Oversee and train teams, monitor and support onsite construction team, oversee all construction and regulation specialists. Vet, select, evaluate, train, and manage all consultants, contractors, installers, and vendors as needed. Manage site work, construction, and installation activities to make sure they are accurate, complete, and compliant.
Risk and change: Execute risk and change management. Monitor change order proposals and directives. Mitigate issues, resolve disputes, solve problems, answer questions, and make interpretations concerning the work in the project owner’s best interest. Communicate open issues to project teams. Follow up to ensure prompt resolution.
Turnover: Support handover activities by facilitating the final inspection and delivering new building orientation for operation and management along with the construction handover package.
Project closeout: Oversee contract closeout, payments for site work and building construction, and final project reporting.

6) What are the latest retail construction management projects completed by N3 Real Estate?

N3 Real Estate completed a retail construction management project for The Human Bean, a double-drive thru kiosk coffee brand. The store is the first Human Bean built in the Dallas / Fort Worth metroplex. It was a fun but challenging project. During construction, we encountered a set of 12 deeply buried conduit pipes that were not previously located by any of the utility providers, the city, the highway department or the owner of the pipes. It was a huge challenge to figure a cost-effective way to get through those pipes without relocating them but we were able to do so with minimal additional cost. The Human Bean is now open and has performed well for the operator.

As you can see, retail construction project management is a complex and dynamic process. If you are searching for a single-source solution to manage your build-to-suit development or development and construction project, look no further. For every retail construction need, we aim to deliver a superior service that comprehensively addresses every aspect of your project.