For over 60 years Newbanks has been helping identify and manage construction risk for lenders throughout their underwriting of construction loans. During the Document and Cost Review process, Newbanks will review and comment on the suitability of project drawings and specifications, surveys, environmental assessment and geotechnical reports, design and third-party consulting agreements, construction agreements and construction schedules. Budget risk is identified by conducting a comparable cost analysis, utilizing Newbanks’ extensive construction cost database. Comments are made on the completeness and legitimacy of the hard cost budgets. All construction and development contingencies are reviewed for appropriateness.
Newbanks’ Document and Cost Review Report can also include a Construction Risk section. This section outlines the Risks and the Mitigants for the risks. Items of analysis include zoning, infrastructure, building envelope, contractor, budget, schedule, design documentation, and permit risks.
During construction, we perform periodic site observations. These enable us to determine construction progress and compliance with plans, specifications, and applicable building codes. We also comment on the quality of materials and workmanship, and availability of funds to complete the project. For construction lenders, we verify that requests for periodic disbursements of construction funds are reasonably accurate. Any problems or questions are reported to the lenders, and immediately submitted to the borrower for explanation or corrections.
After construction is completed, we typically provide statements as to the overall quality of work and observed compliance with the plans and specifications. Our involvement with the project before and during construction provides a valid basis for these comments.
For partially-completed projects, reconnaissance is the key to a high-quality Cost to Complete Analysis. The Newbanks team will conduct informational meetings and interviews with the sponsor team to understand the history of the construction project and the program to complete the project and obtain the proper inspections and documentation for a certificate of occupancy. A thorough analysis is conducted to ascertain the completeness of the in-place improvements. Third party inspection and testing reports are collected and reviewed, and municipal and Fire Department violation searches are conducted to ascertain the scope of work and costs associated to remedy any in-place violations. Subsequently, the Newbanks team will review the current set of construction plans and specifications and comment on the appropriateness of the documents as it the relates to the current improvement and the sponsor’s budget to complete the improvements.
The Cost to Complete Analysis also includes the review of the current construction contracts (if available), change orders and potential change order logs (if the original construction team is in place), the latest contractor requisitions, and all unconditional or partial lien waivers from the inception of the project, construction schedule, permits, available construction logs (i.e. Submittal and Request for Information Logs.), and any design team or third party deficiency/non-compliance reports.
Budget risk is identified by conducting a comparable cost analysis, utilizing Newbanks’ extensive construction cost database and completing a square foot takeoff estimate. Comments are made on the completeness and legitimacy of the hard cost budgets. All construction and development contingencies are reviewed for appropriateness.
The purpose of a Property Condition Assessment (PCA) is to identify risks associated with the current physical condition of the property and provide recommendations regarding the future capital improvements needed to keep the building and its systems in good working order. Prior to visiting the site, the Newbanks team will send out a Property Condition Questionnaire to the property’s management team. Further, a document checklist is submitted requesting plans for the building(s) and site along with work order logs and recent capital expenditure logs.
Newbanks’ professional staff will conduct interviews with onsite personnel including property managers and building/property engineers and superintendents to ascertain how the property is being managed, common reoccurring problems, violations, and the apartment/office turnover rehabilitation program. The Newbanks team will perform a visual observation of all common areas, roofs, mechanical areas, and a percentage of all tenant areas. These areas are surveyed for condition, general code compliance, defects, and useful life. Systems surveyed included common site areas, building envelope, foundation, structural, mechanical, electrical and interior finishes. Further, an Americans with Disabilities Act (ADA) compliance review is conducted and contact is made to the local building, fire and zoning departments to identify any outstanding violations.
Finally, the Newbanks team will generate a Property Condition Assessment report outlining the condition of all systems, deferred maintenance and deficiencies observed. The report will include a list, description, and values for all Immediate Repairs, as well as a Capital Reserve Analysis. The report will include an estimate of Insurable Replacement Costs and a recommended list of items for review prior to executing on the investment. The Immediate Repairs and Capital Reserve Analysis (inclusive of our system of Useful Life Table) allow our clients to plan ahead.
Newbanks PCA reports comply with industry standards based on ASTM E-2018-15 requirements along with Freddie Mac, Fannie Mae, or HUD guidelines.
Keep your finger on the pulse of your project with Newbanks’ in-depth oversight.
Every construction project is unique; that’s why we offer an enhanced version of our monthly project monitoring service. In construction, many things can happen that indicate that lenders need to have enhanced control. If things aren’t progressing according to plan, costs rise dramatically, or a construction manager goes out of business, you need boots on the ground to make it right.
For those projects that require more intense oversight, Newbanks provides an in-depth monitoring service that is tailored to the needs and concerns of the lender. When risk is high, you need to closely monitor quality and progress. Whether you need a representative on the jobsite on a weekly or daily basis, the skilled professionals at Newbanks can help keep your building on track.
For more than 60 years, the Newbanks team has specialized in reviewing virtually all types of construction projects and existing properties; as well as related construction plans, documents, and costs. With our experience in withstanding numerous market peaks and downturns in the cyclical real estate industry, Newbanks can be a vital component in your underwriting process. Our professional staff possesses the skill and experience necessary to quickly determine the status, condition, and quality of construction completed to date for projects that are presently in a workout scenario, foreclosure, or are partially completed.
Newbanks will visit the project, meet with available personnel, and review available documentation to ascertain the remaining work and associated cost to bring the project to substantial completion. Our comprehensive summary report will allow your firm to make sound underwriting decisions in the current market. Newbanks’ affiliated companies offer owner’s representative services, in addition to full-scale construction management oversight for bank-owned partially completed projects.
When the unexpected happens and you need to modify your loan, you can trust the construction consultants at Newbanks to provide exceptional due diligence and guidance.
Cost to Complete Analysis
The experienced Newbanks team will assess the situation and provide a cost to complete analysis that takes into consideration the work already done, agreements in place, and lien waivers received. Newbanks performs extensive due diligence analysis to uncover any hidden risks and costs that may be lurking beneath the surface.
If your project is stalled and the lender is no longer funding construction, Newbanks will provide the detailed level of due diligence needed for new funding.
Newbanks provides assistance with:
Newbanks provides professional private equity representation for limited partnerships and institutions with equity platforms throughout the United States. We provide an exceptional level of due diligence that gives your firm insight into all aspects of the project, so that you can make an informed lending decision.
Detailed, Direct Communication
Transparency is the key to informed decisions. Our approach is hands-on; our consultants meet directly with the people who will realize the project, so they can get a better understanding of the project and the team involved. We believe strongly that the best way to protect equity investors is by being on site, ensuring that all aspects of construction are well managed.
Our New York experts go beyond the surface and delve deep into the permitting process to make sure that everything is complete and in order.
Newbanks has a long history of providing exceptional construction consulting services throughout the Northeast. Our New York office specializes in providing consulting and permit expediting services within the New York City area.
Fast Track Your NYC Permits
Newbanks provides our clients with a road map for navigating the complex web of the New York City permitting process. We fully understand the documents and permits required to obtain a temporary certificate of occupancy in New York City, and will closely monitor the permitting process to ensure that it is processed in a timely manner.
Environmental Assessment Phase I
Asbestos and Lead Paint Assessment
Private Equity Representation (Limited Partnerships)
Permits and Certificate of Occupancy Monitoring Report (NYC)