Cost per Square Foot of Commercial Construction by Region
We get this question all the time: How much does it cost to build a commercial building? There is no quick answer and without more information about the project and its location, is essentially akin to asking how many angels can dance on the head of a pin. However, there is some guidance provided we know where you are located and what kind of building you are looking to build. Local economy is a very important factor in construction cost as well as the type of construction you intend to build.
We subscribe to RSMeans', researchers of construction cost data nationwide, and have come across some important current data on the cost of commercial construction for four different commercial project types as a function of their location. Note, that not all types of construction cost the same per square foot, and even more importantly, the cost of construction per square foot varies significantly with location.
Below are four different types of commercial construction and the varying cost per square foot to expect for each in different regions. All graph images are courtesy of RSMeans Construction Cost Data. Data source: Reed Construction Data – RSMeans/Charts: Reed Construction Data – CanaData
One Story Office Building
Convenience Store
Fast Food
Day Care
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I really like your blog! I have bookmarked it! Keep up the good work!
I would like to know how much for a senior citizen center would cost per square feet for the Dallas, TX area. We are 30 miles north of Dallas in a community of about 40,000 and growing. We are not concerned with the land or the inside equipment.
Elizabeth,
My name is Gene Dane and I am the “Principal In Charge” of the Texas office of EV Studio. Thank you for your recent inquiry about the cost per square foot of a Senior Center in the Dallas, Texas area.
In order to most accurately answer your question, there are several questions that I must ask regarding the type of facility you are considering building.
• Is there a need for a commercial kitchen in the facility?
• Will there be full time staff at the facility?
• Do you have an interest in incorporating any renewable energy resources into the project (solar or wind are currently the most practical)?
• What level of quality is anticipated for the interior finishes?
• What is the anticipated procurement method for the project (competitive bid, negotiated contract, design /build, etc.)?
The short and quick answer is most likely between $100 per square foot and $140 per square foot. The point I was trying to make earlier is that there are many decisions that our clients make that ultimately determine the cost per square foot of their projects. It is our responsibility as architects and engineers to make sure the appropriate questions are asked and answered before we even get close to starting the design process.
The most important question that we ask our clients concerns the budget for their project. The first process we go through with our clients is the evaluation of the project program vs. the project budget. In order to start down the path towards the successful design and construction of your project the program and the budget must be complimentary. We routinely help our clients match the scope of their project to their budget, or determine the appropriate budget if the scope is already clearly defined.
The following is a quick example of how client needs determine the cost per square foot of a building:
Client A and client B both have the same $500,000 budget for a Senior Center.
Client A needs the maximum amount of space possible and lower quality finishes are acceptable. This scenario would result in a larger building and a lower cost per square foot. (5000 square foot building for $500,000 = $100 per square foot)
Client B needs high end finishes and well appointed spaces. The size of the building is of secondary importance. This scenario would result in a smaller building and a higher cost per square foot. (3571 square foot building for $500,000 = $140 per square foot)
Successful projects are the result of the completed facility meeting or exceeding our client’s expectations. We pay very close attention to communicating with our clients to insure their expectations are aligned with their budget and their program.
Elizabeth, we appreciate the time you took to post your question and I hope I have answered your initial question. Please feel free to contact me directly with any other questions you might have concerning your project. We have successfully completed many projects like the one you are asking about and would enjoy working with you on this one.
Sincerely,
Gene Dane, AIA
913 South Main Street
Copperas Cove, Texas 76522
(254) 547-3930 office
(254) 547-4248 fax
website: http://www.evstudio.us || blog: http://www.evstudio.info
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I lost by brother last year. He left me his share of our apartment rental business. I am in the process of trying to estimate the value of the real estate. ONe of the estimates will be replacement cost.
What would be the range of buliding cost in Fort Lauderdale, Fl. for apartments.
Our product is economical 650 square foot 2 br 1 bath. Nice but low end cabinets, base appliances,etc.
CBS, rectangle buildings, gable end roofs.
I have built in 30 years. I don't know how much cost have increased because of hurricain codes and increased goverment fees.
Any guidance would be helpful.
Thanks Rick
Hi Rick,
I'm sorry to hear about your loss. As I mention in the article, local economies can significantly affect the cost of construction. I understand that the economy in Florida has been hit particularly hard in this recession, however, there is also a reasonable floor to the low end of construction cost. In other words, labor and materials would not go lower than the industry could tolerate, regardless of how dismal the market value of the real estate would be. In this scenario, new construction ceases, but replacement cost can still be determined.
For your situation, your property is very similar to a product type we are very involved with in the markets we serve. For economy apartments with relatively uncomplicated structures, I would expect the cost per square foot to be in the range of $130 and $160 per square foot. Given current market conditions in your area, you would likely be on the lower end of that range. I would be hard pressed though to think that it could be much lower than that range though. Also bear in mind that there are local pockets in the country that can be insulated by the recession to some degree due to demographics or unique features even if they are surrounded by areas that are hardest hit by the recession. If you happen to be in one of these areas, then your replacement cost may be on the higher end of that range as industry trades would still be functioning well in those areas.
Good luck to you and if you ever need architectural or engineering help with your development, we are capable of serving the Florida market and would be happy to discuss how we can serve you.
-Dean
Of course what Dean is talking about is market rate apartments and he's including some of the soft costs.
I've designed affordable housing under $100/sf. Of course replacement cost is generally much lower than the actual value because it doesn't include items like the land, the site improvements and the entitlements. That's why your insurance coverage amount is frequently lower than your sales price.
I am currently specializinig is custom built single family homes- I am trying to branch into the commercial market- I have the opportunity to bid on a church rec center in a small town in Ohio- my fear is not knowing the range of commercial cost per square foot so I can check my bid- the project is a 5375sq' activity center- very simple structure - wood frame- brick wainscoating exterior- metal vertical 26 guage siding- wood siccor truss- asphalt shingles- interior mezanene of 535sq'- bathrooms to accomodate 276 total occupancy- small kitchen with stainless range/ vent hood/ sinks ect. - with this criteria do you have an educated cost per square foot I should be in
much appreciated
Steve Wallace
Hi Steve, I'm hoping that you'll be able to get bids from your subs and get a real number if its already designed. We recently did something similar in Colorado. http://evstudio.us/holly-park-community-center-commerce-city-colorado/ This one is about 3,700 sf and the construction cost was about $500K, so that's about $135/sf. Now this is a base levels of finishes and doesn't include furnishings. Hope that helps.
Steve, did you see this post? http://evstudio.info/2010/01/16/construction-cost-per-square-foot-of-community-centers-in-major-us-cities/
Gene, This cost of construction excludes the value of the land doesn't it? Are construction costs for residential projects a lot more or less?
Sunil,
Dean here to address your question. The cost of construction should always exclude the cost of the land, financing costs, and often times most soft costs (entitlement attorneys, appraisers, real estate agents, architects, engineers, surveyors etc.). These variables would not allow us to compare projects on an apples to apples comparison. In addition, other related industries (like the lenders) also need to keep these separate as values for the building and the land have significant implications to the financing and should be looked at separately in all cases.
Residential projects will have a very wide range of construction cost due to the custom nature and the ability to spend much more on significantly less square footage than a large commercial building. The result is that the cost per square foot winds up being very sensitive to things as simple as your cabinetry selection. The low end for very economic single family residential would be in the ballpark of $110 on the low end, but the high end can be extreme. We've seen $400 or more per square foot regularly on luxury vacation homes in Vail and Aspen and I've even seen as high as $1000 per square foot! These are not ordinary residential homes though, as most of us aren't Hollywood stars. For a more realistic high end custom home, you should consider in the ballpark of $180-$220 per square foot.
Because every project is different, you really need to discuss this first when you are programming the project with an architect. We help guide the budget expectations from the very first step in the design, and every subsequent step so that the project meets your budget expectations. If you need any help with this or you would like to discuss your project further, feel free to give us a call. We're happy to help!
I'd like to find out what is the next step in finding the construction company to do your project. I'm looking for a right company to build an office building or multiple. Would you give me a suggestion where do I start from. Do I call differnet construction companies or is there any construction companies website to look them over for bidding and so on? please any advise will be appreciated. The location is in wichita, ks.
Thanks.
Hello,
Your architect should actually be coordinating the bidding and negotiation on your behalf and aid you in the contractor selection process. You should speak with them about that scope of services as it is actually quite important to have them involved since they are also a party to the construction contract and cary numerous roles and responsibilities throughout construction all the way to the very end. If you have not yet selected an architect or started design for your project, please let me know and we would be happy to provide services in your location. Thanks!
Here's a recent question I received by direct e-mail through this post...
Message:
I MAY GET A PROJECT IN NEWARK DELAWARE A 16,000 SQUARE FT BLDING FOR OFFICES ONE STORY ANY IDEA ON HOW MUCH PER SQUARE FT.
While cost per square foot varies by both region as well as local economies, I would expect single story office space in your area to be in the range of $150-$180/square feet, depending on many factors, from design configuration and level of finish to site requirements and availability of local labor. Concrete block warehouse-type office space on an open lot will be considerably less expensive, while specialty construction with tight site constraints could be more.
RSMeans provides the general index for construction costs to be used in developing a starting point for a project budget. However, the actual design will drive actual costs and the budget should be validated at all benchmarks throughout the design process. A line item budget would be developed as soon as schematic architectural drawings are developed.
If you would like to discuss the project in more detail, we can provide full scope architectural and engineering design services in your region, and would be happy to help at any level from schematic design to permitting and contract administration.
Thank you for your interest in EVstudio,
-Dean
I am looking for building maintenance cost per square foot for a case study on church facilities, do you all track that information too?
Hi Melissa, Thanks for your inquiry. We actually do not study building maintenance costs as those can vary so greatly from one facility to the next. As a commercial building owner, however, I can recommend the best way to arrive at these costs is to prepare a pro forma for the individual annual costs associated with the building, both actual and expected. There should be dozens of line items including everything from the cost of utilities, trash removal, cleaning, etc. to the cost of insurance, property taxes, etc.. I also include a % for capital improvements that can accrue over time and pay for large, infrequent items like reroofing or repaving a parking lot. Once you have developed all of those costs, then you can forecast future years using a simple inflationary escalation rate. This way, you can develop an operations budget and adjust it at year end to keep it on track.
I hope that helps and good luck with your project!
-Dean