Why Signing a Cost-Plus Contract With Your General Contractor Makes Sense

When I am contacted about an extensive remodeling job and/or repositioning of a commercial property, the potential client often wants to know if I should give them a ‘fixed-price’ proposal or do the work on a ‘cost-plus’ basis.

My answer is ‘it depends.’ If the job involves building out space in a historic or neglected building, it is likely that the general contractor will encounter surprises behind the walls, floors and ceilings. Each surprise requires more labor and materials. For instances like this, I recommend working on a cost-plus basis, where the general contractor executes the work then adds a fee to the cost of the project.

This approach requires trust and constant communication between the GC, the client and project manager. Each party needs to be on the same page so that all are involved in arriving at a decision when an issue arises. The GC should be accessible when the client asks why the costs are incurred and whether they are justified. The cost-plus basis works very well with customers who have done build-outs in the past or have experience in the construction industry and understand the complexities of building new within an existing structure.

Fixed-price proposals are more common for condo and homeowners seeking to build-out their property and budget appropriately. Custom-built homes and repositioned retail spaces in newer buildings are also conducive to fixed-price proposals. My simple rule: The more predictable the build-out work, the easier it is to write a proposal.

A fixed-price proposal may not be the right answer when working on a historic or long-neglected property. Most likely, the GC will need to amend the fixed price through ‘change orders.’ Each change order addresses whatever ‘unpredicted work’ is necessary to solve the problem. By the time the job is complete, the accumulation of change orders can make the job much costlier than the initial agreement. When this occurs, both the property owners and the GC may feel they have been taken advantage of.

At SPACiO, when the job is big and looks like surprises may be waiting, we recommend using the cost-plus approach. But the key ingredient for this strategy to succeed is trust. The GC must earn the trust of the client and the client should check the GC’s references to ensure that the partnership will be successful.

Cost Effective Luxury Upgrades to Sell A Home/Condo Faster

If you’re thinking about putting your house or condo on the market, you should consider making a few luxury upgrades to help increase your property’s value. Realtor.com has compiled a list of big impact improvements you can make that are surprisingly cost-efficient.

Upgrade Your Patio

Average cost of a new patio: $3,007 
Increase in home value: 3% to 4%

It’s no secret that more homeowners regard their backyard as an extension of their living space. So it shouldn’t come as a surprise that outdoor kitchens and furnished patio areas alongside a fire pit are increasingly popular.

Irene Medina, a real estate agent at Medina Group Real Estate in Coral Springs, FL, says an outdoor kitchen is “a big plus in homes [priced] from $350,000 and up.” This can be anything from an area in the patio with a built-in grill and sink to a full-blown kitchen.

Low-hassle option: Don’t have the money for an all-out kitchen? Try adding French doors that open to the outside. This simple change will make your home feel lighter and brighter, and will appeal to potential buyers—all for an average cost of $879.

Add a Hot Tub

Average cost to install an above-ground hot tub: $321
Increase in home value: 1% to 4%

“Having a hot tub on the property is a great selling point if the home doesn’t have a pool or a water view,” Medina says. If the property has a built-in pool, a hot spa attached to it or nearby could also go a long way, she says. Prices run the gamut, depending on how elaborate you want your spa to be. At the upper end, these babies can cost thousands, once plumbing, electrical, and the tub itself are factored in. But they don’t have to.

Low-hassle option: Don’t want to heat things up that much? Potential buyers are simply looking for a backyard oasis. Consider a simpler (and cheaper) upgrade by adding a hammock surrounded by lush artificial grass through hardscape services—your costs will start around a whopping $30 for the hammock. (Cost of fresh caipirinhas not included.)

When it comes time to sell, any special extras that can paint a picture of leisure and relaxation out back can be an incentive for those in the market for a new home. Leisure is a good thing, right?

Get Smart with an Automation System

Average cost to install a home automation system: $1,282
Increase in home value: 3% to 5%

These days, smart intercom/doorbells that can show a homeowner video of a visitor at the door (and use remote communication) are becoming the Main Street version of the urban doorman. Smart garage door openers, security camera installation, and thermostats are also becoming more common.

Not only will these smart gadgets help you feel more secure in your home, they are also a big draw for the tech-savvy buyer looking for innovative and practical home features, says Mike McGrew, treasurer for the National Association of Realtors® and CEO of McGrew Real Estate in Lawrence, KS.

Low-hassle option: Consider a small splurge on just a Wi-Fi video doorbell. For as little as $100, you’ll have a fancy amenity that can provide convenience and some peace of mind.

Add an In-Law or Nanny Suite

Average cost of a basement remodel: $18,618
Increase in home value: 5% to 10%

Real estate agent Nancy Itteilag of Washington Fine Properties in Washington, DC, says she recently was “this close” to selling a home, but for one major obstacle: The property wasn’t fit to accommodate the prospective buyer’s au pair.

In her market, where double incomes are at an all-time high, there’s big demand for homes with an au pair suite, in-law unit, or a flexible living space (often on the lower level of a two-story house to maximize privacy for both au pair and family). So while the initial costs seem quite high, they could pay off in spades when it’s time for a sale.

Low-hassle option: If you already have a finished basement, you’re in luck. Want to give the feeling of privacy without doing a total remodel of the space? Throw up some temporary walls. For just over $200, you’ll have an extra bedroom instantly. And if your basement has a separate entrance, it’s all the better—it can double as a living space that can be rented out for extra income.

Create a Wine Room 

Cost of a wine cellar: Starts at $4,000
Increase in home value: Varies, but can be as much as 2%

We’re not talking about a dark closet where you hide your best reds (although those pay off, too). We mean a next-level wine space—possibly furnished with a small island or table—for entertaining guests and igniting conversation.

For some wine collectors, this room is becoming more of a showpiece than simply a repository to let wine age. Accordingly, in high-end homes, these cellars are also moving from the lower level to upper floors—often housed in glass walls and under LED lighting.

Wine Cellar SPACiO Built Out at 321 Ocean

While Realtors® agree that a wine room can increase your home’s value, this home improvement should be thought of first and foremost as a treat just for you. Because you deserve it!

“Wine cellars are a bit like swimming pools. They come in all shapes and sizes and costs. And the next folks that look at your house may want nothing to do with them,” McGrew says. “So do a wine cellar because you want a wine cellar, and don’t try to justify it by an increase in value when you sell.”

Low-hassle option: Carve out a space in your home to display a few decorative wine racks and a wine fridge to keep bottles chilled and ready for entertaining. You could create your own wine enclave for as little as $200!

Change Up Your Flooring

Average cost of installing new flooring: $2,853
Increase in home value: 5%

It might not sound sexy, but flooring is also high on the list when it comes to features that pay off in a big way. Whether it’s made of reclaimed hardwood or picturesque tile or features heating, it can set the tone for the whole house.

Want to step it up even more? Heated floors in common areas such as kitchens and bathrooms are a nice amenity for cold winter mornings—and, of course, add a sweet touch of luxury to your home.

Low-hassle option: If you’re looking for a home makeover on the cheap, consider new carpeting in neutral colors, which can go a long way in pleasing prospective buyers. The best part? The price tag, with an average cost of just $1,491.”

Behind the Scenes: Building out the Iconic Grove at Grand Bay

Over the last decade, Miami has become a forefront for cutting edge architecture in the world thanks to starchitects like Zaha Hadid, Arquitectonica and Bjarke Ingels. As a GC, it’s always an honor to leave our imprint on projects that are taking Miami’s skyline to the next level. In fact, the SPACiO team recently completed building out a unit in Grove at Grand Bay, the luxury condo tower in Coconut Grove described by its architect Bjarke Ingles as a Caribbean interpretation of modernism.

With its twisting, dancing glass towers, it was by far one of the more unique projects we’ve ever worked on. All of the rooms in the unit were angled, making it extremely important for us to take the precise measurements in order to incorporate all of the different angles. For example, our client wanted to incorporate the large, structural columns into the interior design of their unit. The columns had a slight slant so we had to be very accurate with the marble installation. To incorporate the columns aesthetically, we advised the owner on the best color palate for the tile and wall paint tones.

When you’re building out luxury units at iconic buildings like Grove at Grand Bay, it’s important to integrate your own personal touch in a way that doesn’t disrupt the natural feel and ambience of the building. The work we successfully carried out for our client did just that. It combined raw with high-end materials, including mixed raw concrete of the columns, high-end marble, glass and woodwork, giving the unit a natural feel.

In addition to installing the columns and marble throughout the entire unit including on the walls of the powder bathroom, they also installed motorized solar and blackout blinds with channels to eliminate all light when they were closed. This is a great feature to have especially in Florida when the sun is always shining bright at 6 am.

They installed a beautiful onyx mirrored glass backsplash in the kitchen and did a kitchen cabinetry remodel, which helped magnify the light in the room and give the wall a classy appearance. Closets were also added, which included drawers, shelving and hanging space in beige linen egger colors, giving the closet a modern and clean look. They installed unique light fixtures, bathroom mirrors and a custom laundry room with pure white quartz countertop and beige linen cabinetry. They hung Onyx mirrored glass in the foyer of the unit, which made the entrance really stand out. Last but not least, they also painted the entire unit with the help of painting contractors for a more professional job done.

Q&A with Guest Contributor: Miami’s Jeff Morr Dishes on Trends in Interior Design

SPACiO sat down with the talented Jeff Morr , an interior designer who has designed some of Miami’s most iconic condo projects from Ten Museum Park to Paramount on the Bay. He gives us the scoop on what it takes to be an interior designer in one of the most cosmopolitan cities in the world.

How did you become an interior designer?

I have been a real estate broker for over 30 years and have always had a passion for interior design. For years, I’ve worked closely with developers and architects designing buildings and introducing new concepts to the South Florida real estate market. For example, I introduced the ‘loft’ concept in the 1990s. Buyers from New York would ask me for lofts in Miami Beach and I would always say “we don’t have them in Miami”. As a result, I convinced a handful of developers to build small loft condo projects South of Fifth Street in South Beach. These were a big success so I brought the concept across Biscayne Bay to work with the developers of Ten Museum Park, Paramount on the Bay, Parc Lofts MiamiCynergi  (the first residential project in Wynwood), Midtown Miami and many others.

Give us a taste of the work you do as a designer.

We recently completed a unit at Continuum South Beach and have now started working at a unit in the Beach Club. We are doing a lot of work in buildings completed in the last cycle to freshen up the floor plans, kitchens, baths and create brand new spaces. We also manufacture furniture to match our design as well as design decorator-ready units in buildings being completed in this cycle, like Echo Brickell.

When it comes to designing, I love doing kitchens. My clients are amazed to see how you can create a completely new style by replacing cabinet doors, installing new countertops and adding an interesting backsplash. Our clients are moving away from ‘all white’ and are increasingly choosing pastel blue, pastel gray and pastel orange for cabinets. Shaker kitchen cabinets are very popular because some clients like just a twist of traditionalism.

In terms of flooring, porcelain is in. It is a great material. You don’t have to worry about it polishing every few years. It is virtually maintenance free. Wood-look porcelain tile is also very popular on terraces, pool decks and areas you would have never imagined.

Miami is a very cosmopolitan city. How does the ‘international influence’ reflect on the work you do?

Miami is a progressive city that tends to be into a singular look known as Tropical Modernism, embracing clean lines combined with warm colors, wood, glass, natural stone, LED lighting and more. I do see a few differences in clients who come from South America. They need service quarters for their nanny. Handheld shower devices are very important for foreigners as well as combo toilet/bidets. All our clients – regardless of where they come from – are very interested in space maximization so that’s a priority for me. They are paying a very high price per square foot when they buy into some of the world’s most luxurious towers in Miami so there is no reason to waste space. For example, we often remove traditional bidets, consolidate a bidet with the toilet and in the new void, we build a linen closet. There are many ways to add storage space in condos. It is all about being creative.

If I Knew Then…


In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy. See the article featured in Crain’s Miami here.

By: NicoleMartinez |@niki_frsh

The Mistake:

I was getting a lot of new business continuously and not focusing on my past clients as an added source of revenue.

When I first got started, I was letting the business run me, instead of me running the business. One of my most common mistakes was that I would land a client, and this would happen especially with some of my bigger clients, and I would do the job and just move on after that. I wouldn’t necessarily continue maintaining a relationship with them, whether that meant through person-to-person contacts, e-mail marketing or regular follow-up phone calls and meetings to see how they were enjoying the new space.

In the construction business, you’re only as good as your last job. In my space, you have huge general contracting firms and those guys have a pipeline for years of work. A firm our size, however, doesn’t have a tremendous pipeline, so you’re always working on trying to get that next job.

Over dinner with other business partners one night, one of them had mentioned to me that it seemed like I was not focusing enough on my existing clients. He said that I needed to keep extracting them for additional work.

“The majority of my clients that I have today are friends, because I do maintain monthly contact, whether that’s something as simple as a phone call.”

The Lesson:

Throughout the years I’ve learned and we’ve grown tremendously from taking our clients and extracting them for additional business. So if you’re not following up continuously and reminding them about who you are and what you do, they forget about you.

It doesn’t just stop at traditional marketing initiatives. Whenever I meet a client I try and figure out what they like to do. For instance, I take my clients to play golf, dine with them, or take them fishing. We become friends. The majority of my clients that I have today are friends, because I do maintain monthly contact, whether that’s something as simple as a phone call. I try and stay on top of their business, and at the top of their mind, and that’s become a failsafe way to continue having lasting business relationships that allow my own business to grow.

This approach, coupled with quality craftsmanship, has helped SPACiO grow from $9 million in 2014 to nearly $20 million in 2016.

Follow SPACiO Design Build on Twitter @spaciodb.

CASE STUDY: The Psychology Behind NYC Luxury Real Estate Listings Can Work in Miami

Here are some factors that luxury residential brokers consider when creating a listing, according to DNA Info New York Writer Amy Zimmer:

The power of pricing “just below”

Just as in retail, many in real estate price their property “just below” a round number — for example listing an apartment for $499,000 instead of $500,000.

“There is a psychological effect of being just a hair under,” said broker Claire Groome with Warburg Realty.

For instance, she recently sold a three luxury queen bed style bedroom co-op in Carnegie Hill listed for $3.495 million after three days on the market, saying, “Rarely will you see something listed for $4 million.”

When Dan Bamberger, of the Bamberger Group, analyzed Manhattan sales prices in 2015 using Streeteasy data, he found that listings between $300,000 and $1 million used the “just below” strategy nearly 90 percent of the time. Homes priced between $1 million and $10 million used the strategy 78 percent of the time.

 The allure of neutral spaces

Staging apartments — which often involves de-cluttering, painting and changing furniture — has become more common, even for apartments at lower price points.

These apartments tend to show better in photos as well as in real life, experts say, as they give would-be buyers an easier canvas upon which to quickly project their lives.

 The repellent effect of stale listings

In this market, listings that sit longer than 60 to 90 days raise red flags, said Broker Zach Ehrlich of Mdrn. Residential.

Buyers are suspicious of stale listings, thinking something must be wrong with the property. Their agents also steer clear, thinking the seller isn’t likely to cut the price, he said.

To avoid that perception, brokers often try to work around this. They might reduce the price by some nominal amount — like $1,000 or $5,000 — to grab attention again as a price reduction or might re-list an apartment, reversing the order of the unit number. So, apartment 11K might be relisted as K11 to trick websites like Streeteasy and Zillow.

 A listing’s wording is chosen with care

Though text may be secondary to pictures, many brokers still labor over word choice — even more so now, said Stephen Kliegerman of Halstead Property Development Marketing.

“You want to make sure your messaging is clear and direct, but you want make sure you leave some things out so people still call you,” he said, explaining that if a listing has too much information, would-be buyers might think they don’t have to see the space.

You can read the entire article here: https://www.dnainfo.com/new-york/features/apartmentality

SPACiO Tells Invest:Miami Magazine What’s Trending in Miami Real Estate

In case you missed it, Invest Miami Magazine sat down with SPACiO president Alex Wertheim to discuss what he expects to see in Miami’s construction and design industry this year.

Alex discusses some factors that are driving demand for construction and design services, based on his experience as a general contractor building out some of Miami’s most iconic residential and commercial projects. He states that residential demand growth in Miami will continue, due in large part to the lower cost of living compared to other major gateway cities across the U.S. and Florida’s advantageous tax structure.

While construction in the residential sector is clearly slowing down, Alex continues to see an increase in construction activity in the commercial real estate sector, especially in the restaurant and hospitality areas. This reflects a trend in which restaurant owners/operators are increasingly allocating resources to upgrade the aesthetics of their facilities to match the level of service and culinary experience. For that reason, he expects to see more complex designs and build outs as new restaurants enter the market. SPACiO recently built out the Nobu restaurant in Miami Beach, which is a great example of this trend. Hotels are also recognizing the importance of investing in aesthetics to remain competitive and provide an ‘experiential’ atmosphere. This trend is fueling the renovation and repositioning of several Miami hotels, including SPACiO’s latest project: Marriott Stanton South Beach.

Alex concludes by highlighting the importance of restaurant and hotel owners/operators as well as developers hiring the proper architect, designer and general contractor to ensure that pre-construction work is handled by highly qualified professionals. If the selection process is executed poorly, the construction phase will probably create unplanned challenges to the final vision of the hotel and restaurant owners/operators.

To read more about Alex’s predictions for 2017, you can view the entire article here.

Behind The Scenes: Building Out A Condo At Oceana Bal Harbour

SPACiO Design Build’s crew is meticulously building out a condo at Oceana Bal Harbour, one of the most luxurious development projects in South Florida. SPACIO’s work in the decorator-ready unit consists of installing hardwood flooring in the interior and tile on the large balcony, dropping the ceiling for additional lighting, painting, installing pocket doors, audio visual and more.

Build-out velocity is a priority for our clients who plan to occupy or rent out the unit shortly after closing. For that reason, four weeks after securing the necessary permits, SPACiO delivers a finished unit to the new owner or renter eager to move in. In some instances, we are recruited by buyers to plan the build-out work ahead of the closing and, when the deal is closed, our crew immediately jumps right in.

Working at Oceana is an incredible experience. With floor-to-ceiling windows and extra-deep balconies, the unit has one of the most breathtaking views available in Miami. The luxury tower’s spacious homes and balconies were designed to offer views of the Atlantic ocean to the East, Biscayne Bay and the Bal Harbour marina to the West and Miami’s skyline to the South. Our experienced crew’s work is not distracted by the remarkable view of golden sun rays reflecting on the blue ocean but we agree that it is a challenge! Stay tuned for photos of the finished condo!

Helping Transform Little Haiti One Building At A Time

Increasingly rundown warehouses in Little Haiti – the next Wynwood – are getting a new lease on life. Drive along its streets and you will see a lot of construction going on, as old buildings are being repositioned into new uses, including art galleries, showrooms and more.

Our client, Innerspace Custom Closet Storage Solutions, is a perfect example of the quality of businesses that are choosing Little Haiti as their new home. Innerspace, which is relocating from Wynwood, is a premiere designer of organized closet systems in South Florida. We’re currently renovating for Innerspace a 24,000-square-foot warehouse and reinforcing the existing structure to withhold new loads for our client to move in next month. The build-out of the space includes a 5,200 square foot interior office and a unique showroom.

Our goal with this project is to make the building relevant to the emerging neighborhood, which is attracting new businesses to the area. We’re already starting to see an influx of new neighbors, including a French catering business across the street and a future art gallery next door.

It’s exciting to be a part of Little Haiti’s transformation, helping to turn visions into reality through quality craftsmanship. We’re looking forward to working more in the area as it begins to develop into one of Miami’s hottest neighborhoods.

Custom Home Miami Beach: A class of its own

This $10 million dollar residence is truly in a class of its own.  SPACiO meticulously crafted every gorgeous facet of this modern home. The contemporary design featured an open floor plan with white oak flooring, a professional chef’s kitchen, and a massive master suite with an adjoining office. And it features a condo roof, a durable roofing installation built by roofing contractors, with a rooftop deck for breathtaking views of downtown Miami.

This is the type of custom home project that the SPACiO team takes immense pride in bringing to life.

SPACiO makes the process of building a home simple and convenient to the homeowner. It all starts with a visit to SPACiO’s showroom, where we display samples of materials. Our entire team is also there to help the owner make decisions on the spot. We assign a team leader to communicate and coordinate with all the subcontractors’ schedules so the owner always knows where we are in the process. One thing we realized over the years is that one can never over report with a homeowner, who eagerly waits for the completion of his/her home. We provide our clients with a detailed timeline and weekly update including photos or videos as needed. Honoring the timeline is a key priority to us so our clients can arrange travel plans for milestone walk-through visits.

While SPACiO is committed to quality work, we are even more committed to helping owners have a positive experience when building their homes or building out their luxury condo units. We are always glad to get on a call to discuss how we can help you.