When embarking on a real estate project, one of the most critical decisions investors and developers face is choosing between a construction manager and a general contractor. Though they share similar responsibilities, their roles differ in focus, oversight, and impact on the project. At Presidio Hill Investments (PHI), we understand the unique demands of multifamily and Opportunity Zone projects, and we guide our clients to make the best choice for their specific needs.

Construction Management vs. General Contracting: Defining the Roles

1. Construction Manager: A construction manager provides comprehensive oversight throughout a project’s lifecycle, from planning to completion. Their responsibilities encompass everything from initial budgeting and scheduling to quality control and final inspections. Construction managers are deeply involved in pre-construction planning, ensuring that resources are allocated efficiently and risks are minimized. They work on behalf of the project owner, offering transparent reporting and strategic decision-making at every stage.
2. General Contractor: A general contractor (GC) primarily manages the day-to-day construction activities on-site, handling the actual implementation of the construction plans. GCs typically come on board after the project has been planned and designed, focusing on organizing labor, sourcing materials, and supervising subcontractors. While a GC can contribute to project management, their scope is generally more limited, focusing on bringing the project to physical completion according to the set plans and specifications.

Explore more about construction management responsibilities in our article, "Construction Management Essentials: From Planning to Execution".

Key Differences Between Construction Management and General Contracting

1. Project Scope and Involvement
   • Construction Manager: Involved from early planning, construction managers are accountable for the entire project, ensuring each phase aligns with the client's goals.
   • General Contractor: GCs are brought in once the project is ready to be executed, focusing on site-specific tasks and coordinating labor to move the project forward.
2. Budgeting and Cost Control
   • Construction Manager: With early and detailed budget planning, construction managers track costs throughout the project, adjusting as necessary to avoid overages. They help prevent costly missteps by aligning each phase with budget goals.
   • General Contractor: General contractors work within the established budget to secure materials and labor, but they don't usually have the same degree of control over the initial budget planning.
3. Risk Management
   • Construction Manager: Construction managers assess potential risks from the outset, implementing strategies to minimize these risks over the project's duration.
   • General Contractor: While general contractors ensure site safety and meet project deadlines, they're more focused on managing the direct risks associated with on-site construction.
4. Relationship with the Client
   • Construction Manager: Typically acts as an advocate for the project owner, providing transparent reporting and aligning the project's progression with the owner's long-term goals.
   • General Contractor: Often works under a contract to complete the physical build-out, with a primary focus on completing the project to specifications rather than broader strategic goals.

Which should you choose?

Choosing between a construction manager and a general contractor depends largely on the complexity, scale, and goals of your project. Here's a breakdown:

1. Consider Construction Management if:
   • Your project is large-scale and complex, with many moving parts.
   • You need someone involved in every phase, from budgeting to execution.
   • You're looking for a partner who aligns with your long-term investment strategy.
2. Consider a General Contractor if:
   • Your project is straightforward, with well-defined requirements.
   • You have clear construction plans and need someone primarily for on-site management.
   • Budget constraints favor a simpler oversight model.

Learn more about when to prioritize construction management in our article, "Why Construction Management is Necessary in Large-Scale Projects".

Construction Management and General Contracting in Opportunity Zones

In Opportunity Zone projects, where long-term investment benefits like tax incentives are crucial, effective oversight can have an outsized impact on project success. PHI’s construction management team specializes in Opportunity Zone developments, helping clients maximize value through careful planning, budget alignment, and risk management. Discover how Opportunity Zones can benefit your next development in our guide, "Key Benefits of Opportunity Zones for Real Estate Development".

How PHI Helps You Make the Right Choice

With 15 years of experience in real estate development, PHI assists clients in choosing the best approach for their projects, whether that's through comprehensive construction management or skilled general contracting. Our team's knowledge in multifamily projects and Opportunity Zones allows us to offer tailored solutions that fit each client’s unique investment objectives.

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Have Questions? Connect with Us

Exploring Opportunity Zones for the first time? Or are you ready to take advantage of the tax benefits they offer? PHI's team is here to answer your questions and provide insights based on years of industry experience. Contact us here to learn more about how we can help you achieve your investment goals.

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Disclaimer: The information provided in this article is for general informational purposes only and should not be construed as legal, financial, or tax advice. Consult your attorney, financial advisor, or tax professional regarding your specific situation. Presidio Hill Investments (PHI) assumes no responsibility or liability for any errors or omissions in the content.