Analyzing the distribution and variations in construction costs for commercial tenant improvement projects

In this era of high-tech computer advancements and tremendous programmable computer capabilities, construction cost estimation still remains a knowledge-intensive and experience driven task. High reliance on human expertise, and less accuracy in the decision support tools render cost estimation error prone. Arriving at accurate cost estimates is of paramount importance because it forms the basis of most of the financial, design, and executive decisions concerning the project at subsequent stages. As its unique contribution to the body of knowledge, this paper analyzes the deviations and behavior of costs associated with different construction activities involved in commercial office tenant improvement (TI) projects. The aim of this study is to obtain useful micro-level cost information of various construction activities that make up for the total construction cost of projects. Standardization and classification of construction activities have been carried out based on Construction Specifications Institute’s (CSI) MasterFormat® division items. Construction costs from 51 office TI projects completed during 2015 and 2016 are analyzed statistically to understand the trends among various construction activities involved. It was found that the interior finishes activities showed a much higher cost of construction, and a comparatively higher variation than the mechanical, electrical, and plumbing (MEP) trades. The statistical analysis also revealed a huge scope of energy saving measures that could be achieved in such TI projects because of the absence of energy management systems (EMS) found in 66% of the projects.