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Development Advisory Consulting: Avoiding a Costly Mistake

Challenge

C3 was engaged by an institutional fund manager to assess the potential equity investment in a new $220-million, ground-up, mixed-use development. To facilitate their underwriting analysis, our client needed to know if the proposed costs and schedule were accurate.

Solution

C3 completed a top-down review of the project plans, construction costs, schedule, A&E, and mitigation costs to develop an independent view of the project. This was a very involved undertaking and relied on our in-house technical staff to opine on the completeness of the plans and on our project management and estimating group to assess the construction cost, schedule, and risks. C3’s opinion was substantially different from that of the proponents, resulting in a fresh look at the project. Ultimately, our opinion of the project costs, timing and risks proved to be correct.

Result

Based on the thorough, accurate and objective understanding of the project’s true costs and risks provided by C3, the client decided not to pursue the investment. The client was very grateful for the insight we provided, which prevented them from investing in a project which would not have met their objectives.