Cost per Square Foot of Commercial Construction by Region

by Dean Dalvit on August 6, 2009

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

As you can see from the range of cost per square foot, location alone can represent as much as 70% of the cost driver for a single story office building. The median for this type of construction is between $160 and $170 per square foot. Not surprisingly, New York tops the charts for most expensive city to build in for all of these building types.

Convenience Store

Convenience stores are generally less expensive to construct than the other building types because of their simpler nature.  The median cost for this commercial building type hovers around $100 per square foot.Fast Food

Because of the new trends in fast food being more boutique and less assembly line, the cost for a typical fast food restaurant is on the rise. Expenses for kitchen equipment also drive this building type to a median of near $200 per square foot, the most expensive of the four building types in this discussion.

Day Care

It is increasingly important to understand the cost drivers for any commercial project and how building type, construction type and location can all be huge variables that will drive your cost per square foot. These are always a part of the initial programming discussions and the Architect will play a huge role in helping to define the ranges of cost to expect for the project.

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{ 214 comments… read them below or add one }

Dean Dalvit August 25, 2016 at 9:24 pm

Rudy,
Excellent question! Construction costs vary every year, so no, it would not be appropriate to apply 2009 figures to anything beyond 2009. However, it’s very simple to adjust for any given year up to the present year by using a construction cost index. This is essentially a simple multiplier that you apply to the numbers in the chart based on the difference between the adjusted index for 2009 and this year. See the following link for the RSMeans Construction Cost Index numbers for every year dating back to the ’60′s as well as instructions on how to use it: https://www.rsmeansonline.com/References/CCI/3-Historical%20Cost%20Indexes/1-Historical%20Cost%20Indexes.PDF
Best of luck!

Rudy August 25, 2016 at 7:33 pm

Dean,

Thank you so much for this informative article. I noticed this was written in 2009. Would these figures hold true for 2016?

Dean Dalvit August 17, 2016 at 5:05 am

Foad, thanks for your question. That will definitely depend on the particular city you are in. Our experience is that utilities themselves are most cost effective to connect (dry utilities) and/or tap (wet utilities) in the urban core of a city because the infrastructure is built for that and fees are most advantageous for most major cities because of the economy of scale and a City’s desire to attract development. Out on the edge, certain infrastructure may or may not be as readily available, and if you are outside certain districts, tap fees typically rise the further out of the urban core you get. These are not hard and fast rules though. Every city is unique and each would need to be analyzed based on its specific infrastructure conditions and available utility providers.

foad August 16, 2016 at 11:30 pm

is the cost of construction inside the city utility zone more, less, or the same for a property on the edge of the city limit

Dean Dalvit August 5, 2016 at 5:51 pm

Sorry Billy, but I don’t quite follow your comment. Did you have a question?

billy thamos August 4, 2016 at 11:23 am

no elect. no pluming, no metal builing just a 2000 sf warhouse in iving, tx

Dean Dalvit May 2, 2016 at 7:24 pm

Thanks Robert for your information – we always welcome the input and experience of others in the industry.

Robert Raymond May 2, 2016 at 7:16 pm

This is such a refreshing site to see! No one is asking for a trial period or fees of any kind…just input and feedback! I am a commercial real estate broker with decades of experience and several hundred thousand square feet of re-development in the greater north east. At this time, depending on the market, the fit-up costs…ie.. the cost of refurbishing an existing space(vanilla box) is running about $50-$60 s/f. So for example, a 2000s/f former tenanted space that has existing HVAC, electricity, and bathroom(s) will cost about $100-$120K to re-purpose. That is contingent on a number of issues such as if the existing vacant space space(say an old big box of 20,000s/f) is being sub-divided(now you need to break up the utilities) and must install demising fire-proof walls that may also require new ingress/egress doors, ADA compliancy as well as fire safety and a host of other 21st century codes all of which will double those figures. For new developments the issues are sometimes more onerous but less costly and therefore the costs can be better controlled. Get back to me if you would like to know more.

Dean Dalvit April 17, 2016 at 5:09 pm

Gary,
Thank you for your question. The data that we published here is available only for cities in the United States. The provider of the information, RS Means, very well may offer construction cost data for Mexico. I would suggest going to http://www.rsmeans.com and contacting someone there who may be able to help you. Domestically, Walmart type projects run between $100 and $130 per square foot, depending on location and details specific to each store. Whether Mexico City would be higher or lower than that range is beyond my expertise. I would suspect that the cost of labor may be lower, but the cost of materials and entitlements could offset that. Best of luck with your project!

Gary LaGassey April 17, 2016 at 9:56 am

Sirs,
I am an MBA student with the University of Maryland overseas campus at Aviano Air Base, Italy. Our class team is tasked with writing a project plan for design and construction of a Walmart type commercial store in Mexico City. We’ve searched all over for data concerning design and construction costs to no avail.
This doesn’t have to be fine science but we need to get close to a reasonable estimate of the project.
Would you be kind enough to point us in the right direction to obtain this information?
Thank you in advance for your assistance.
Sincerely,
Gary C. LaGassey (gary.c.lagassey@gmail.com)

Dean Dalvit December 16, 2015 at 3:56 pm

Tad,
A more complete analysis of construction costs per square foot for apartments can be found here:
http://evstudio.com/construction-cost-per-square-foot-for-multifamily-apartments-2012/ and here: http://evstudio.com/cost-per-square-foot-for-construction-for-8-to-24-story-apartment-buildings/ for various sizes of buildings. Note however that the RSMeans study is limited to locations in the continental US. However, in general, Honolulu costs generally rank similar to New York and San Francisco costs, so I would plan for the high 200′s per square foot as a starting point. EVstudio has a depth of expertise in multifamily design and we also have an affiliate in Honolulu. We would be happy to discuss your project with you and provide you with Architecture services for your project. Just let us know and we can arrange a meeting. Thanks!

Tadhg December 16, 2015 at 3:06 pm

How much is residential apartment high-rise construction cost per square foot in Honolulu?

Dean Dalvit December 12, 2015 at 10:39 am

Winston,
The RSMeans data is for new construction, so it isn’t readily applicable to renovation projects. However, EVstudio has extensive experience in commercial renovations and can provide a conceptual starting point for establishing a budget that would then need to be validated by design development and iterative pricing. There are a great many factors that can influence the costs of a renovation project, but if you are taking it to the core and shell, and replacing MEP systems, a median level of interior finish would likely land you in a cost range of $80-$130 per square foot. The trick is that you are working with a small square footage, so that will be highly price sensitive to large line item costs, like bringing in 3-phase. Intended use and level of finish are also highly influential to the cost, and without a schematic design and demo plan, can only be conservatively forecast. I’m assuming a professional class A level of office finish, but there can be substantial savings if the resulting space is a lower level of finish.

winston December 12, 2015 at 5:46 am

wanting to remodel an existing 3,500 sq ft brick office building in St Louis area. total inside gut with new ac/heat and taking 1 bath (small) and making 2 ada accessible bath rooms. it has a 200 am service panel now, would need to rewire as the build out goes, and add 3 phase which we have the bid on. Can you advise what our estimated projected planning cost per sq ft be?

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