MT382 Unit 2 Conceptual Cost Estimate Example

Six Lines a Board Can Check: An MT382 Unit 2 Conceptual Estimate for a 38,400-Square-Foot Recreation Center

[Student Name]

Purdue University Global

MT382: Construction Cost Estimating

Unit 2 Conceptual Estimate

[Instructor Name]

[Date]

The parks district, program and cost data are composite; the classification and sources cited are real.

The Program

The parks district plans a two-story recreation center of 38,400 gross square feet: a two-court gymnasium, an elevated walking track, fitness and multipurpose rooms, locker rooms and a lobby. There is no pool. The district has not chosen a site, commissioned a survey or drilled borings. The estimate is dated January 2027 and is prepared to support a funding decision.

The Cost Sheet

Line one is the database median for recreation centers of this size, 312 dollars per square foot, from the cost data supplied with the case.

Line two adjusts the median for place and time. The project city's index ratio of 0.916 moves the national figure to local prices, and a time factor of 1.036 brings the database's price date to January 2027. The adjusted rate is 296.08 dollars per square foot.

Line three multiplies the adjusted rate by 38,400 square feet for a building cost of 11,369,492 dollars.

Line four adds a site allowance of 9 percent of building cost, 1,023,254 dollars, for grading, parking, utilities and stormwater on a site nobody has seen.

Line five adds design contingency of 20 percent of the 12,392,746-dollar subtotal, 2,478,549 dollars, for scope the drawings do not yet show.

Line six gives the total: 14,871,295 dollars, or 387.27 per square foot.

A board member with a calculator can reproduce 14,871,295 dollars from six lines without asking anyone.

Why the Median

The median is used rather than a quartile because the program resembles a typical recreation center: two courts, a track, fitness and meeting rooms, no pool and no unusual structure. Reaching for the upper quartile without such a reason would inflate the figure; reaching for the lower quartile would assume a cheaper building than the program describes. Holm et al. (2005) note that square-foot estimates are only as good as the match between the project and the buildings behind the unit cost, and the match here is close.

The Range

The database quartiles, 268 and 371 dollars per square foot, sit 14.1 percent below and 18.9 percent above the median. The stated range is wider still, minus 20 percent to plus 40 percent, giving 11,897,036 to 20,819,813 dollars, because the site has no survey, no borings and no utility information. AACE International (2020) classifies an estimate built from a unit area cost at this stage of definition as Class 5, with expected accuracy ranges of this order and an upper side wider than the lower, since unknowns more often add cost than remove it.

Site Work as a Placeholder

The site allowance is a percentage of building cost, labeled as a placeholder. Nine percent reflects the database's typical share for suburban community buildings, but a site with poor soils or a long utility run could double it. The allowance will be replaced by a priced site estimate once a site is selected.

Design Contingency on Its Own Line

Design contingency is shown on its own line rather than buried in the unit rate, so the board can see how much of the total is reserved for design growth and watch it fall as the drawings develop. At this stage, with only a program, 20 percent is used.

Exclusions

The estimate excludes land acquisition, design and consultant fees, furniture, fixtures and equipment, utility company connection charges, permits and impact fees, and escalation beyond January 2027. Escalation to the midpoint of construction depends on when the project is funded and will be priced in a later memo, once a schedule exists.

How the Number Will Change

The board should expect this figure to move, and in a known direction for each line. The unit rate will be replaced by a priced estimate built from schematic drawings, which may raise or lower the building cost. The site allowance will be replaced by a site estimate once land is chosen. Design contingency will fall as the drawings develop, toward zero at bid. Escalation, now excluded, will be added once a construction date exists, and at recent rates it could add several percent for each year of delay. Presenting the total with these movements described in advance should keep the next figure from being read as an overrun, the problem the Unit 1 post traced to an unlabeled first number.

What the Estimate Is For

The estimate is meant to answer one question: is a recreation center of this program affordable within the funding the district can reasonably raise? If the district can raise only about 12 million dollars, the program should be reduced now, before design money is spent, rather than after a higher estimate arrives.

Basis of Estimate

The estimate is based on the program summary dated December 2026, the case's cost database, city index and time factor, and no drawings. It is a Class 5 estimate suitable for deciding whether to proceed, not for setting a construction budget. Ashuri and Lu (2010) show how construction cost indexes move over time, which is why the time factor is printed rather than assumed.

References

AACE International. (2020). Cost estimate classification system: As applied for the building and general construction industries (Recommended Practice No. 56R-08). AACE International.

Ashuri, B., & Lu, J. (2010). Time series analysis of ENR construction cost index. Journal of Construction Engineering and Management, 136(11), 1227-1237. https://doi.org/10.1061/(ASCE)CO.1943-7862.0000231

Holm, L., Schaufelberger, J. E., Griffin, D., & Cole, T. (2005). Construction cost estimating: Process and practices. Pearson Prentice Hall.