Construction

Commercial Building Construction: How Much are the Commercial Construction Costs Per Square Foot?

Learn more about the factors affecting commercial building construction and the commercial construction costs per square foot.
Togal.AI
12 minutes

To begin commercial building construction and avoid cost overruns, make sure to determine the commercial construction costs per square foot. Do this by considering all the factors that affect the final price - the size, the type of building, location, and design. 

In this article, explore how each factor affects the overall price of a commercial construction project. Once you’ve considered all factors, come up with an accurate and competitive cost estimate for your large-scale commercial building project using technology such as  AI estimating software. This type of software can help you complete the takeoff process, thus allowing you to shift your focus towards value engineering and looking for suitable trade partners.

Disclaimer: The pricing stated here is based on average data from third-party research. Prices may still vary due to differences in seasonality and supplier.

What is Commercial Construction?

Commercial construction can be anywhere from designing, renovating, and building universities, healthcare centers, office high-rises, warehouses, shopping malls, hotels, to even retail centers. As long as the structure's primary use is “profit generation”, then it’s considered “commercial construction”.

There are three types of commercial construction: small-scale, medium-scale, and large-scale.

1. Small-Scale Commercial Construction 

Rather than building a new structure from the ground up, small-scale commercial construction is strictly remodeling jobs. Their project timelines are usually shorter and require fewer employees, and fewer materials and equipment.

An example of small-scale commercial construction includes renovating office spaces and office buildings. Below are some examples of costs: 

Office space

Source: Invoice Owl , Bankrate

Type Cost
Office Building Renovation $350 per square foot
Commercial Bathroom Installation $12,500 - $15,000
Complete Bathroom Remodel +$30,000
Commercial Building New Roof Installation $9 - $13 per square foot
Commercial Building Hardwood Flooring Refinishing $7 per square foot
HVAC system installation $5,000 - $12,000

2. Medium-Scale Commercial Construction

Constructing a commercial building on a medium-scale involves upgrading, expanding, and starting from the ground up. The projects are more complicated than small-scale ones and therefore can take several months, or a year to finish. 

The following are some examples of medium-scale constructions:

Hotel Building
Type Cost
Single Story Office $313 per square foot
Mid-Rise Office $562 per square foot
Hotels $134 - $550 per square foot
Medical Facilities $200 - $625 per square foot

Source: Levelset , Fixr

3. Large-Scale Commercial Construction

These are complex projects that create an entirely new structure from the ground up, or significantly change the overall output and layout of a building. Not only do they take years to finish, but they also need a high level of coordination among various teams and specialized equipment to finish. 

High-rise Office Building
Type Cost
Large Offices (High Rise) $660 per square foot
Shopping Malls $300 - $400 per square foot (for a regional mall)
Airports $10 Million to build a 1 km airport runway
$500 per square meter to build a passenger terminal (excluding value of land)

Commercial Construction Costs: By Location

When determining the cost of a commercial construction project, it is important to consider the location of the construction site because it can have a significant impact on the overall cost of the project. 

The Impact of Location on Commercial Construction Costs

Labor Costs

Labor costs vary depending on the location of the construction site due to differences in wages and availability of skilled labor. Construction labor rates tend to be higher in urban areas than in rural areas due to higher living costs and increased competition for labor. This can affect the cost of the project since labor is typically one of the most significant expenses in a construction project.

Material Costs

The cost of construction materials also varies depending on the location of the construction site. The availability and transportation costs of building materials can vary significantly depending on the location, which can affect the overall cost of the project. For example, materials may be more expensive in remote areas where transportation costs are higher.

Building Codes and Regulations

Building codes and regulations can also vary depending on the location of the construction site. Some areas may require more extensive building permits or environmental impact studies, which can increase the cost of the project.

How to Ensure Accurate Cost Estimates 

To ensure that your labor and material cost estimates are accurate per location, you should consider the following:

Conduct Research

Research the local labor rates and material costs in the area where the construction project is to be located. This can help you accurately estimate the cost of the project based on the location-specific factors.

Consult with Local Experts

Consult with local experts, such as contractors or architects who have experience working in the area. They can provide valuable insights into the specific factors that may affect the cost of the project in that location.

Factor in Other Location-Specific Costs

Consider any additional location-specific costs, such as transportation or permitting fees, that may affect the cost of the project. This will help you develop a more accurate cost estimation for the project.

By taking the location of the construction site into account and accurately estimating the labor and material costs per location, you can develop a more accurate cost estimation for your commercial construction project.

Commercial Construction Costs Per U.S. Region

Below are some of the average construction costs per select building type. We presented the figures per square foot, comparing the different construction prices per U.S. region. As shown below, medical centers are one of the most expensive building types to build. 

Type Western U.S. Eastern U.S. Midwest Southern U.S.
Office Buildings $511 per square foot $518 per square foot $465 per square foot $461 per square foot
Schools $379 per square foot $349 per square foot $266 per square foot $238 per square foot
Community Buildings $657 per square foot $648 per square foot $593 per square foot $513 per square foot
Medical centers $742 per square foot $720 per square foot $581 per square foot $521 per square foot
Retail $407 per square foot $424 per square foot $388 per square foot $336 per square foot

Source: Big Rentz

Commercial Construction Costs Per U.S. Region

Source: Big Rentz

Evolution of Non-Residential Commercial Buildings in the U.S. from 2006 - 2023 in Million U.S. Dollars

The forecast below shows the rise and fall of construction spending for non-residential commercial construction in the U.S. The spending steadily rose from 2010 until 2018, but gradually fell from 2019 to 2021. By 2022, the construction spending gradually went on an upward trend once more.

 

Evolution of Non-Residential Commercial Buildings in the U.S.

Source: Statista 

Commercial Construction Costs in the U.K.

The following shows the commercial construction costs of several building types in the U.K. per m2 of the gross internal floor area. Gross internal floor area refers to the internal area of the building that is measured over internal partitions and walls and stairway openings.

When determining the construction costs of the following commercial building types, the finishes, fittings, furnishings, equipment, services, main contractor’s overheads and profits, and preliminaries were all considered. 

Construction Costs of Administrative, Commercial and Protective Service Entities in the U.K.

Type Low-End (£/m2) High-End (£/m2)
Offices, non air-conditioned: 1-2 story 2,090 2,310
Offices, non air-conditioned: 3-5 story 2,230 2,470
Offices, non air-conditioned: 6+ story 2,550 2,830
Offices, air-conditioned: 1-2 story 2,430 2,690
Offices, air-conditioned: 3-5 story 2,610 2,890
Offices, air-conditioned: 6+ story 2,970 3,290
Offices with shops and flats, non air-conditioned: 1-2 story 2,060 2,280
Offices with shops and flats, non air-conditioned: 3-5 story 2,130 2,370
Offices with shops and flats, non air-conditioned: 6+ story 2,290 2,550
Vehicle repair and maintenance buildings 1,790 1,990
Wholesale trading building/auction rooms 1,320 1,460
Department stores 2,820 3,120
Banks and building society branches 3,180 3,520
Bank head offices 3,810 4,230
Market building providing accommodation for stalls, etc. 1,130 1,250
Type Low-End (£/m2) High-End (£/m2)
Vehicle showrooms 1,790 1,990
Vehicle showrooms with workshops 1,670 1,850
Shops: shell only 1,070 1,190
Shops, simple stores: shell and fitting out 1,590 1,770
Shops, designer stores: shell and fitting out 1,970 2,190
Shops with domestic or office accommodation 2,580 2,860
Mixed commercial developments 1,430 1,590
Retail warehouses: shell only 770 870
Retail warehouses: shell and fitting out 1,140 1,260
Supermarkets: shell only 940 1,040
Supermarkets: shell and fitting out 2,510 2,790
Hypermarkets: shell only 940 1,040
Hypermarkets: shell and fitting out 2,060 2,280
Shopping centers: simple 1,810 2,010
Shopping centers: comprehensive 2,770 3,070
Branch post offices 1,790 1,990
Postal sorting and delivery offices 1,790 1,990

Source: Costmodelling

Construction Costs of Cultural, Educational, Scientific and Information Entities in the U.K.

Type Low-End (£/m2) High-End (£/m2)
Nursery schools 2,620 2,900
Primary/junior schools 2,520 2,800
Secondary/middle schools 2,590 2,870
Sixth form colleges 2,490 2,770
Special schools 2,580 2,860
Schools for those with learning disabilities 2,490 2,770
Schools for the physically disabled 2,140 2,380
Training colleges 2,200 2,440
Management training centers 2,280 2,520
Universities and colleges 2,450 2,710
Learning resource centers 2,590 2,870
Adult education facilities 2,520 2,800
Art and drama centers 2,220 2,460
Type Low-End (£/m2) High-End (£/m2)
Lecture theaters 4,550 5,030
Research facilities 2,980 3,300
Laboratories 3,710 4,110
Artists' studios 1,710 1,910
Art galleries, facilities for special displays 3,920 4,340
Museums, planetaria 5,430 6,010
Exhibition centers 3,680 4,080
Conference centers 3,010 3,330
Libraries 4,180 4,620

Source: Costmodelling

Industrial entities in the U.K.

Type Low-End (£/m2) High-End (£/m2)
Advance factories: generally 1,120 1,240
Advance factories/offices: mixed facilities 1,560 1,740
Factories: generally 1,210 1,350
Purpose-built factories 1,250 1,390
Purpose-built factories/offices: mixed facilities 1,510 1,670
Factories for food and drink 2,550 2,830
Factories for chemical and allied industries 2,400 2,660
Factories for metals 1,680 1,860
Factories for mechanical and electrical engineering 1,570 1,750
Factories for electronics, computers and the like 2,570 2,850
Type Low-End (£/m2) High-End (£/m2)
Factories for paper, printing and publishing 1,540 1,720
Advance warehouses/stores 1,080 1,200
Warehouses/stores: generally 1,100 1,220
Purpose-built warehouses/stores: generally 1,130 1,250
Builders yards and maintenance depots 1,100 1,220
Distribution centers/warehouse 10m to 15m high (10000m2 footprint) 530 590
Distribution centers/warehouse 16m to 24m high (10000m2 footprint) 580 660
Cold stores/refrigerated stores 1,330 1,490
Livestock buildings 460 520
Stud farms, stables, etc 1,470 1,630
Refuse depots 1,620 1,800

Source: Costmodelling

Construction Costs of Medical, Health, Welfare and Sanitary Entities in the U.K.

Type Low-End (£/m2) High-End (£/m2)
Day hospitals 2,780 3,080
Community hospitals 3,810 4,230
General hospitals 4,200 4,660
Mental, psychiatric hospital facilities 3,600 3,980
Psychiatric units 4,130 4,570
Psychiatric units for the elderly 3,730 4,130
Learning disability units 3,840 4,260
Ear, nose and throat units 2,570 2,850
Cardiac units 3,460 3,840
Hospital facilities for the treatment of parts of the body 2,620 2,900
Maternity, gynecological hospital facilities 3,690 4,090
Genito-urinary facilities 2,620 2,900
Pediatric, geriatric hospital facilities 2,770 3,070
Pediatric units, children's hospitals 2,670 2,970
Surgery including operating theaters 4,620 5,120
Hospital laboratories 3,490 3,870
Type Low-End (£/m2) High-End (£/m2)
Pathology laboratories 3,490 3,870
Occupational therapy, physiotherapy, hydrotherapy units 3,080 3,420
Pharmacies 3,340 3,700
Hospital mixed specialist facilities 4,470 4,950
Diagnostic units excluding radiography 2,770 3,070
Radiography (x-ray) units 5,790 6,410
Chemotherapy units 4,360 4,820
Radiotherapy units 4,660 5,160
Specialized facilities 4,610 5,110
Outpatients/casualty units 2,870 3,190
Ward blocks 4,150 4,590
Intensive care/acute wards 4,120 4,560
Sterile stores/serialization units 3,390 3,750
Medical research facilities 3,590 3,970
Observation and assessment centers 2,580 2,860
Blood transfusion facilities 3,150 3,490
Hospital teaching centers 2,590 2,870
Type Low-End (£/m2) High-End (£/m2)
Health centers, clinics, group practice surgeries 2,560 2,840
Welfare consultation centers 2,550 2,830
Day centers 2,820 3,120
Nursing homes 2,090 2,310
Homes for the elderly 2,380 2,640
Homes for the mentally ill 1,980 2,200
Children's homes 2,610 2,890
Homes for children with special needs 3,490 3,870
Hospices 2,560 2,840
Mortuaries 4,730 5,230
Crematoria 3,170 3,510
Public conveniences 3,330 3,690
Utility blocks: washing and toilet facilities 3,960 4,380
Animal rearing and living facilities 2,690 2,990
Kennels and catteries 2,330 2,590
Veterinary hospitals 2,600 2,880
Animal clinics 2,240 2,480

Source: Costmodelling

Construction Costs of Recreational Entities in the U.K.

Type Low-End (£/m2) High-End (£/m2)
Public houses, licensed premises 2,600 2,880
Restaurants 2,490 2,770
Canteens, refectories, cafes, etc 2,450 2,710
Arts and drama centers 2,960 3,280
Theaters: less than 500 seats 3,910 4,330
Theaters: over 500 seats 5,880 6,500
Concert halls 4,720 5,220
Cinemas 3,310 3,670
Multiplex cinemas 4,450 4,930
Community centers 2,360 2,620
General purpose halls 2,190 2,430
Youth clubs 2,630 2,910
Visitors centers 3,670 4,070
Mixed recreations buildings, holiday camps, caravan site buildings, etc 2,770 3,070

Source: Costmodelling

Construction Costs of Sport and Activity Entities in the U.K.

Type Low-End (£/m2) High-End (£/m2)
Squash courts 1,730 1,930
Indoor bowls halls 1,240 1,380
Indoor tennis courts 770 870
Table tennis centers 1,280 1,420
Indoor cricket centers 1,450 1,610
Indoor bowling greens 940 1,040
Indoor athletic training centers 1,610 1,790
Indoor sports arena 2,410 2,670
Health and fitness clubs 2,440 2,700
Sports centers, recreational centers 2,350 2,610
Sports centers, recreational centers including swimming pools 3,560 3,940
Gymnasium/sports halls 1,890 2,090
Sports pavilions, club houses and changing rooms 1,970 2,190
Sports changing rooms 2,520 2,800
Sports pavilions and clubhouses 2,350 2,610
Type Low-End (£/m2) High-End (£/m2)
Club houses 2,060 2,280
Golf club houses 2,140 2,380
Bowls pavilions 1,540 1,720
Rifle ranges 1,470 1,630
Golf driving ranges 2,060 2,280
Riding schools 720 800
Boat houses 2,970 3,290
Leisure centers: dry 2,590 2,870
Leisure centers: wet and dry 3,940 4,360
Swimming pools: small 3,560 3,940
Swimming pools: 25m 2,860 3,180
Swimming pools: 50m 3,860 4,280
Leisure pools 4,600 5,100
Covered ice rinks 2,220 2,460

Source: Costmodelling

Construction Costs of Hotels and Hostels in the U.K.

Type Low-End (£/m2) High-End (£/m2)
Hotels: budget roadside excluding dining facilities 2,150 2,390
Hotels: budget city centers with dining and bar facilities 2,650 2,930
Hotels: mid-range with conference and leisure facilities 2,770 3,070
Hotels: business city centers with conference and leisure facilities 3,870 4,290
Hotels: luxury city center with conference and leisure facilities 5,290 5,850
Barracks, mess accommodation, and section houses 3,380 3,740
Youth hostels 2,630 2,910
Short-stay hostels for the homeless, etc 2,350 2,610

Source: Costmodelling

Commercial Construction Costs Per Square Foot and By Building Type 

Commercial construction costs vary depending on the building type for several reasons, such as:

  1. Structural Design

The structural design of different types of buildings depends on their intended use. For example, a hospital building will require heavier structural elements to support medical equipment, while an office building will have lighter structures to support office equipment. These different structural designs can have an impact on construction costs.

  1. Building Systems

Various building types require varying mechanical, electrical, and plumbing systems. A hospital building will require more complex and sophisticated systems to support the medical equipment and provide a clean and sterile environment, while an office building may require fewer systems. The complexity and sophistication of building systems will affect the cost of the project.

  1. Building Materials

To achieve their intended purpose, different building types require different building materials. For example, a hotel building will require more durable and aesthetically pleasing materials to create a welcoming environment, while a school building may require more practical and affordable materials.

  1. Specialized Equipment and Features

Some building types may require specialized equipment or features that are not found in other types of buildings. For example, a hospital building may require specialized medical equipment and features, such as operating rooms and intensive care units, while a hotel may require specialized amenities such as swimming pools, spas, and restaurants. These specialized features and equipment can significantly impact the cost of the project.

  1. Building Codes and Regulations

Different building types are subject to different building codes and regulations, which can affect the construction cost. For example, a hospital building may require more extensive fire protection systems, which can increase the cost of the project.

Commercial Costs Per Building Type

As shown below, two of the most expensive commercial building types to build include the acute care medical facility, museums, and performing arts centers. Acute care facilities require specialized equipment such as medical gas systems and backup power systems that are costly to install.

 Performing arts centers require highly specialized acoustic and lighting systems. Lastly, museums need specialized climate control systems, lighting,g and security systems to protect the highly valuable artworks and artifacts. All of these factors lead to its high overall construction costs.

Commercial Costs Per Building Type
Commercial Costs Per Building Type
Commercial Costs Per Building Type
Type Cost
Single-Story Office Building $313 per square foot
Mid-Rise Office Building $562 per square foot
High-Rise Building $660 per square foot
3-Star Hotels $478 per square foot
5-Star Hotels $691 per square foot
Regional Distribution Warehouse $214 per square foot
Light Industrial Warehouse $238 per square foot
Technology Laboratories $635 per square foot
Acute Care Facilities $888 per square foot
Medical Office Buildings $498 per square foot
Type Cost
Specialty Clinics $619 per square foot
Primary and Secondary Schools $327 per square foot
Regular University Classroom $580 per square foot
Laboratory Building (University) $756 per square foot
School Dormitory $322 per square foot (low-end)
Neighborhood Strip Center $371 per square foot
Regional Mall $537 per square foot.
Multi-level parking structure $143 per square foot
Above-ground parking lot $71 per square foot
Gymnasiums and Recreational Centers $403 per square foot
Government administration buildings $591 per square foot
Performing arts centers and museums $892 per square foot

Source: Proest

Commercial Construction Cost  Breakdown 

Here are some of the other factors that affect the overall commercial construction cost. 

Commercial Construction Cost  Breakdown 
Description Cost
Foundations The structural base of a building that supports the weight of the building and distributes it evenly to the ground, typically one of the first and most important components of a commercial construction project that impacts the overall cost. 11.3% of total construction costs
Labor The workforce needed for the physical construction of the building, consisting of workers whose wages contribute to the cost of the project e.g carpenter, builder, designer etc. 20% to 40% of the total construction costs
Materials The physical substances and supplies used to construct the building, such as lumber, steel, concrete, and insulation, whose quality and quantity impact the cost of the project. 17.3% - 25% of total construction costs
Finish and Fixtures The final touches and elements of the building, such as lighting, flooring, paint, and cabinetry, which contribute to the overall appearance and functionality of the building. 15% - 29.1% of total construction costs
Design The planning and creation of the building's layout, functionality, and aesthetics, typically a crucial component of the project that impacts the overall cost, as it determines the level of complexity and materials needed for the project. 4.5% to 16% of total construction costs
Plumbing The system of pipes, drains, and fixtures that distribute water and remove waste from the building, an essential component of any commercial construction project. 4.3% of total construction costs
Electrical Installation The system of wires, circuits, and fixtures that distribute electricity throughout the building, another essential component that can significantly impact the cost of the project based on its complexity and materials used. 4.2% of total construction costs
Permits The legal permissions and authorizations required by the government and other regulatory bodies for the construction of the building. 0.5% to 2% of total construction costs

Source: Proest

Other Costs to Consider

Aside from material and labor costs, here are some of the other fees you’ll need to look out for when building your commercial building.

  • Hard Costs - The direct expenses associated with the physical construction of the building, including labor, materials, and equipment costs, typically the most substantial portion of the overall project cost.
  • Soft Costs - The indirect expenses associated with the project, including design fees, legal fees, permits, and insurance, which can add up and significantly impact the overall project cost.
  • Long-Term Cost - The ongoing expenses associated with the maintenance, repairs, and utilities of the building after construction, which can significantly impact the overall cost of the building over its lifespan.

How to Estimate Commercial Building Costs 

Factors that affect the final price include the size, type of building, location, and design. The cost of labor, materials and building codes, and regulations can also vary depending on the location of the construction site, affecting the overall cost of the project. 

To ensure accurate cost estimates, research local labor rates and material costs, consult with local experts, and factor in other location-specific costs. Finally, it is vital to use technology such as AI estimating software to complete the takeoff process in seconds with 99% accuracy and shift your focus towards value engineering and finding suitable trade partners. 

Doing so will help you ensure competitive cost estimates and project proposals, and increase the overall profitability of your commercial construction project. Experience how Togal.AI can streamline your preconstruction workflow and help you bid on and win more work. 

Try out Togal.AI today.

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Commercial Building Construction: How Much are the Commercial Construction Costs Per Square Foot?

March 21, 2023
Togal.AI
12 minutes

To begin commercial building construction and avoid cost overruns, make sure to determine the commercial construction costs per square foot. Do this by considering all the factors that affect the final price - the size, the type of building, location, and design. 

In this article, explore how each factor affects the overall price of a commercial construction project. Once you’ve considered all factors, come up with an accurate and competitive cost estimate for your large-scale commercial building project using technology such as  AI estimating software. This type of software can help you complete the takeoff process, thus allowing you to shift your focus towards value engineering and looking for suitable trade partners.

Disclaimer: The pricing stated here is based on average data from third-party research. Prices may still vary due to differences in seasonality and supplier.

What is Commercial Construction?

Commercial construction can be anywhere from designing, renovating, and building universities, healthcare centers, office high-rises, warehouses, shopping malls, hotels, to even retail centers. As long as the structure's primary use is “profit generation”, then it’s considered “commercial construction”.

There are three types of commercial construction: small-scale, medium-scale, and large-scale.

1. Small-Scale Commercial Construction 

Rather than building a new structure from the ground up, small-scale commercial construction is strictly remodeling jobs. Their project timelines are usually shorter and require fewer employees, and fewer materials and equipment.

An example of small-scale commercial construction includes renovating office spaces and office buildings. Below are some examples of costs: 

Office space

Source: Invoice Owl , Bankrate

Type Cost
Office Building Renovation $350 per square foot
Commercial Bathroom Installation $12,500 - $15,000
Complete Bathroom Remodel +$30,000
Commercial Building New Roof Installation $9 - $13 per square foot
Commercial Building Hardwood Flooring Refinishing $7 per square foot
HVAC system installation $5,000 - $12,000

2. Medium-Scale Commercial Construction

Constructing a commercial building on a medium-scale involves upgrading, expanding, and starting from the ground up. The projects are more complicated than small-scale ones and therefore can take several months, or a year to finish. 

The following are some examples of medium-scale constructions:

Hotel Building
Type Cost
Single Story Office $313 per square foot
Mid-Rise Office $562 per square foot
Hotels $134 - $550 per square foot
Medical Facilities $200 - $625 per square foot

Source: Levelset , Fixr

3. Large-Scale Commercial Construction

These are complex projects that create an entirely new structure from the ground up, or significantly change the overall output and layout of a building. Not only do they take years to finish, but they also need a high level of coordination among various teams and specialized equipment to finish. 

High-rise Office Building
Type Cost
Large Offices (High Rise) $660 per square foot
Shopping Malls $300 - $400 per square foot (for a regional mall)
Airports $10 Million to build a 1 km airport runway
$500 per square meter to build a passenger terminal (excluding value of land)

Commercial Construction Costs: By Location

When determining the cost of a commercial construction project, it is important to consider the location of the construction site because it can have a significant impact on the overall cost of the project. 

The Impact of Location on Commercial Construction Costs

Labor Costs

Labor costs vary depending on the location of the construction site due to differences in wages and availability of skilled labor. Construction labor rates tend to be higher in urban areas than in rural areas due to higher living costs and increased competition for labor. This can affect the cost of the project since labor is typically one of the most significant expenses in a construction project.

Material Costs

The cost of construction materials also varies depending on the location of the construction site. The availability and transportation costs of building materials can vary significantly depending on the location, which can affect the overall cost of the project. For example, materials may be more expensive in remote areas where transportation costs are higher.

Building Codes and Regulations

Building codes and regulations can also vary depending on the location of the construction site. Some areas may require more extensive building permits or environmental impact studies, which can increase the cost of the project.

How to Ensure Accurate Cost Estimates 

To ensure that your labor and material cost estimates are accurate per location, you should consider the following:

Conduct Research

Research the local labor rates and material costs in the area where the construction project is to be located. This can help you accurately estimate the cost of the project based on the location-specific factors.

Consult with Local Experts

Consult with local experts, such as contractors or architects who have experience working in the area. They can provide valuable insights into the specific factors that may affect the cost of the project in that location.

Factor in Other Location-Specific Costs

Consider any additional location-specific costs, such as transportation or permitting fees, that may affect the cost of the project. This will help you develop a more accurate cost estimation for the project.

By taking the location of the construction site into account and accurately estimating the labor and material costs per location, you can develop a more accurate cost estimation for your commercial construction project.

Commercial Construction Costs Per U.S. Region

Below are some of the average construction costs per select building type. We presented the figures per square foot, comparing the different construction prices per U.S. region. As shown below, medical centers are one of the most expensive building types to build. 

Type Western U.S. Eastern U.S. Midwest Southern U.S.
Office Buildings $511 per square foot $518 per square foot $465 per square foot $461 per square foot
Schools $379 per square foot $349 per square foot $266 per square foot $238 per square foot
Community Buildings $657 per square foot $648 per square foot $593 per square foot $513 per square foot
Medical centers $742 per square foot $720 per square foot $581 per square foot $521 per square foot
Retail $407 per square foot $424 per square foot $388 per square foot $336 per square foot

Source: Big Rentz

Commercial Construction Costs Per U.S. Region

Source: Big Rentz

Evolution of Non-Residential Commercial Buildings in the U.S. from 2006 - 2023 in Million U.S. Dollars

The forecast below shows the rise and fall of construction spending for non-residential commercial construction in the U.S. The spending steadily rose from 2010 until 2018, but gradually fell from 2019 to 2021. By 2022, the construction spending gradually went on an upward trend once more.

 

Evolution of Non-Residential Commercial Buildings in the U.S.

Source: Statista 

Commercial Construction Costs in the U.K.

The following shows the commercial construction costs of several building types in the U.K. per m2 of the gross internal floor area. Gross internal floor area refers to the internal area of the building that is measured over internal partitions and walls and stairway openings.

When determining the construction costs of the following commercial building types, the finishes, fittings, furnishings, equipment, services, main contractor’s overheads and profits, and preliminaries were all considered. 

Construction Costs of Administrative, Commercial and Protective Service Entities in the U.K.

Type Low-End (£/m2) High-End (£/m2)
Offices, non air-conditioned: 1-2 story 2,090 2,310
Offices, non air-conditioned: 3-5 story 2,230 2,470
Offices, non air-conditioned: 6+ story 2,550 2,830
Offices, air-conditioned: 1-2 story 2,430 2,690
Offices, air-conditioned: 3-5 story 2,610 2,890
Offices, air-conditioned: 6+ story 2,970 3,290
Offices with shops and flats, non air-conditioned: 1-2 story 2,060 2,280
Offices with shops and flats, non air-conditioned: 3-5 story 2,130 2,370
Offices with shops and flats, non air-conditioned: 6+ story 2,290 2,550
Vehicle repair and maintenance buildings 1,790 1,990
Wholesale trading building/auction rooms 1,320 1,460
Department stores 2,820 3,120
Banks and building society branches 3,180 3,520
Bank head offices 3,810 4,230
Market building providing accommodation for stalls, etc. 1,130 1,250
Type Low-End (£/m2) High-End (£/m2)
Vehicle showrooms 1,790 1,990
Vehicle showrooms with workshops 1,670 1,850
Shops: shell only 1,070 1,190
Shops, simple stores: shell and fitting out 1,590 1,770
Shops, designer stores: shell and fitting out 1,970 2,190
Shops with domestic or office accommodation 2,580 2,860
Mixed commercial developments 1,430 1,590
Retail warehouses: shell only 770 870
Retail warehouses: shell and fitting out 1,140 1,260
Supermarkets: shell only 940 1,040
Supermarkets: shell and fitting out 2,510 2,790
Hypermarkets: shell only 940 1,040
Hypermarkets: shell and fitting out 2,060 2,280
Shopping centers: simple 1,810 2,010
Shopping centers: comprehensive 2,770 3,070
Branch post offices 1,790 1,990
Postal sorting and delivery offices 1,790 1,990

Source: Costmodelling

Construction Costs of Cultural, Educational, Scientific and Information Entities in the U.K.

Type Low-End (£/m2) High-End (£/m2)
Nursery schools 2,620 2,900
Primary/junior schools 2,520 2,800
Secondary/middle schools 2,590 2,870
Sixth form colleges 2,490 2,770
Special schools 2,580 2,860
Schools for those with learning disabilities 2,490 2,770
Schools for the physically disabled 2,140 2,380
Training colleges 2,200 2,440
Management training centers 2,280 2,520
Universities and colleges 2,450 2,710
Learning resource centers 2,590 2,870
Adult education facilities 2,520 2,800
Art and drama centers 2,220 2,460
Type Low-End (£/m2) High-End (£/m2)
Lecture theaters 4,550 5,030
Research facilities 2,980 3,300
Laboratories 3,710 4,110
Artists' studios 1,710 1,910
Art galleries, facilities for special displays 3,920 4,340
Museums, planetaria 5,430 6,010
Exhibition centers 3,680 4,080
Conference centers 3,010 3,330
Libraries 4,180 4,620

Source: Costmodelling

Industrial entities in the U.K.

Type Low-End (£/m2) High-End (£/m2)
Advance factories: generally 1,120 1,240
Advance factories/offices: mixed facilities 1,560 1,740
Factories: generally 1,210 1,350
Purpose-built factories 1,250 1,390
Purpose-built factories/offices: mixed facilities 1,510 1,670
Factories for food and drink 2,550 2,830
Factories for chemical and allied industries 2,400 2,660
Factories for metals 1,680 1,860
Factories for mechanical and electrical engineering 1,570 1,750
Factories for electronics, computers and the like 2,570 2,850
Type Low-End (£/m2) High-End (£/m2)
Factories for paper, printing and publishing 1,540 1,720
Advance warehouses/stores 1,080 1,200
Warehouses/stores: generally 1,100 1,220
Purpose-built warehouses/stores: generally 1,130 1,250
Builders yards and maintenance depots 1,100 1,220
Distribution centers/warehouse 10m to 15m high (10000m2 footprint) 530 590
Distribution centers/warehouse 16m to 24m high (10000m2 footprint) 580 660
Cold stores/refrigerated stores 1,330 1,490
Livestock buildings 460 520
Stud farms, stables, etc 1,470 1,630
Refuse depots 1,620 1,800

Source: Costmodelling

Construction Costs of Medical, Health, Welfare and Sanitary Entities in the U.K.

Type Low-End (£/m2) High-End (£/m2)
Day hospitals 2,780 3,080
Community hospitals 3,810 4,230
General hospitals 4,200 4,660
Mental, psychiatric hospital facilities 3,600 3,980
Psychiatric units 4,130 4,570
Psychiatric units for the elderly 3,730 4,130
Learning disability units 3,840 4,260
Ear, nose and throat units 2,570 2,850
Cardiac units 3,460 3,840
Hospital facilities for the treatment of parts of the body 2,620 2,900
Maternity, gynecological hospital facilities 3,690 4,090
Genito-urinary facilities 2,620 2,900
Pediatric, geriatric hospital facilities 2,770 3,070
Pediatric units, children's hospitals 2,670 2,970
Surgery including operating theaters 4,620 5,120
Hospital laboratories 3,490 3,870
Type Low-End (£/m2) High-End (£/m2)
Pathology laboratories 3,490 3,870
Occupational therapy, physiotherapy, hydrotherapy units 3,080 3,420
Pharmacies 3,340 3,700
Hospital mixed specialist facilities 4,470 4,950
Diagnostic units excluding radiography 2,770 3,070
Radiography (x-ray) units 5,790 6,410
Chemotherapy units 4,360 4,820
Radiotherapy units 4,660 5,160
Specialized facilities 4,610 5,110
Outpatients/casualty units 2,870 3,190
Ward blocks 4,150 4,590
Intensive care/acute wards 4,120 4,560
Sterile stores/serialization units 3,390 3,750
Medical research facilities 3,590 3,970
Observation and assessment centers 2,580 2,860
Blood transfusion facilities 3,150 3,490
Hospital teaching centers 2,590 2,870
Type Low-End (£/m2) High-End (£/m2)
Health centers, clinics, group practice surgeries 2,560 2,840
Welfare consultation centers 2,550 2,830
Day centers 2,820 3,120
Nursing homes 2,090 2,310
Homes for the elderly 2,380 2,640
Homes for the mentally ill 1,980 2,200
Children's homes 2,610 2,890
Homes for children with special needs 3,490 3,870
Hospices 2,560 2,840
Mortuaries 4,730 5,230
Crematoria 3,170 3,510
Public conveniences 3,330 3,690
Utility blocks: washing and toilet facilities 3,960 4,380
Animal rearing and living facilities 2,690 2,990
Kennels and catteries 2,330 2,590
Veterinary hospitals 2,600 2,880
Animal clinics 2,240 2,480

Source: Costmodelling

Construction Costs of Recreational Entities in the U.K.

Type Low-End (£/m2) High-End (£/m2)
Public houses, licensed premises 2,600 2,880
Restaurants 2,490 2,770
Canteens, refectories, cafes, etc 2,450 2,710
Arts and drama centers 2,960 3,280
Theaters: less than 500 seats 3,910 4,330
Theaters: over 500 seats 5,880 6,500
Concert halls 4,720 5,220
Cinemas 3,310 3,670
Multiplex cinemas 4,450 4,930
Community centers 2,360 2,620
General purpose halls 2,190 2,430
Youth clubs 2,630 2,910
Visitors centers 3,670 4,070
Mixed recreations buildings, holiday camps, caravan site buildings, etc 2,770 3,070

Source: Costmodelling

Construction Costs of Sport and Activity Entities in the U.K.

Type Low-End (£/m2) High-End (£/m2)
Squash courts 1,730 1,930
Indoor bowls halls 1,240 1,380
Indoor tennis courts 770 870
Table tennis centers 1,280 1,420
Indoor cricket centers 1,450 1,610
Indoor bowling greens 940 1,040
Indoor athletic training centers 1,610 1,790
Indoor sports arena 2,410 2,670
Health and fitness clubs 2,440 2,700
Sports centers, recreational centers 2,350 2,610
Sports centers, recreational centers including swimming pools 3,560 3,940
Gymnasium/sports halls 1,890 2,090
Sports pavilions, club houses and changing rooms 1,970 2,190
Sports changing rooms 2,520 2,800
Sports pavilions and clubhouses 2,350 2,610
Type Low-End (£/m2) High-End (£/m2)
Club houses 2,060 2,280
Golf club houses 2,140 2,380
Bowls pavilions 1,540 1,720
Rifle ranges 1,470 1,630
Golf driving ranges 2,060 2,280
Riding schools 720 800
Boat houses 2,970 3,290
Leisure centers: dry 2,590 2,870
Leisure centers: wet and dry 3,940 4,360
Swimming pools: small 3,560 3,940
Swimming pools: 25m 2,860 3,180
Swimming pools: 50m 3,860 4,280
Leisure pools 4,600 5,100
Covered ice rinks 2,220 2,460

Source: Costmodelling

Construction Costs of Hotels and Hostels in the U.K.

Type Low-End (£/m2) High-End (£/m2)
Hotels: budget roadside excluding dining facilities 2,150 2,390
Hotels: budget city centers with dining and bar facilities 2,650 2,930
Hotels: mid-range with conference and leisure facilities 2,770 3,070
Hotels: business city centers with conference and leisure facilities 3,870 4,290
Hotels: luxury city center with conference and leisure facilities 5,290 5,850
Barracks, mess accommodation, and section houses 3,380 3,740
Youth hostels 2,630 2,910
Short-stay hostels for the homeless, etc 2,350 2,610

Source: Costmodelling

Commercial Construction Costs Per Square Foot and By Building Type 

Commercial construction costs vary depending on the building type for several reasons, such as:

  1. Structural Design

The structural design of different types of buildings depends on their intended use. For example, a hospital building will require heavier structural elements to support medical equipment, while an office building will have lighter structures to support office equipment. These different structural designs can have an impact on construction costs.

  1. Building Systems

Various building types require varying mechanical, electrical, and plumbing systems. A hospital building will require more complex and sophisticated systems to support the medical equipment and provide a clean and sterile environment, while an office building may require fewer systems. The complexity and sophistication of building systems will affect the cost of the project.

  1. Building Materials

To achieve their intended purpose, different building types require different building materials. For example, a hotel building will require more durable and aesthetically pleasing materials to create a welcoming environment, while a school building may require more practical and affordable materials.

  1. Specialized Equipment and Features

Some building types may require specialized equipment or features that are not found in other types of buildings. For example, a hospital building may require specialized medical equipment and features, such as operating rooms and intensive care units, while a hotel may require specialized amenities such as swimming pools, spas, and restaurants. These specialized features and equipment can significantly impact the cost of the project.

  1. Building Codes and Regulations

Different building types are subject to different building codes and regulations, which can affect the construction cost. For example, a hospital building may require more extensive fire protection systems, which can increase the cost of the project.

Commercial Costs Per Building Type

As shown below, two of the most expensive commercial building types to build include the acute care medical facility, museums, and performing arts centers. Acute care facilities require specialized equipment such as medical gas systems and backup power systems that are costly to install.

 Performing arts centers require highly specialized acoustic and lighting systems. Lastly, museums need specialized climate control systems, lighting,g and security systems to protect the highly valuable artworks and artifacts. All of these factors lead to its high overall construction costs.

Commercial Costs Per Building Type
Commercial Costs Per Building Type
Commercial Costs Per Building Type
Type Cost
Single-Story Office Building $313 per square foot
Mid-Rise Office Building $562 per square foot
High-Rise Building $660 per square foot
3-Star Hotels $478 per square foot
5-Star Hotels $691 per square foot
Regional Distribution Warehouse $214 per square foot
Light Industrial Warehouse $238 per square foot
Technology Laboratories $635 per square foot
Acute Care Facilities $888 per square foot
Medical Office Buildings $498 per square foot
Type Cost
Specialty Clinics $619 per square foot
Primary and Secondary Schools $327 per square foot
Regular University Classroom $580 per square foot
Laboratory Building (University) $756 per square foot
School Dormitory $322 per square foot (low-end)
Neighborhood Strip Center $371 per square foot
Regional Mall $537 per square foot.
Multi-level parking structure $143 per square foot
Above-ground parking lot $71 per square foot
Gymnasiums and Recreational Centers $403 per square foot
Government administration buildings $591 per square foot
Performing arts centers and museums $892 per square foot

Source: Proest

Commercial Construction Cost  Breakdown 

Here are some of the other factors that affect the overall commercial construction cost. 

Commercial Construction Cost  Breakdown 
Description Cost
Foundations The structural base of a building that supports the weight of the building and distributes it evenly to the ground, typically one of the first and most important components of a commercial construction project that impacts the overall cost. 11.3% of total construction costs
Labor The workforce needed for the physical construction of the building, consisting of workers whose wages contribute to the cost of the project e.g carpenter, builder, designer etc. 20% to 40% of the total construction costs
Materials The physical substances and supplies used to construct the building, such as lumber, steel, concrete, and insulation, whose quality and quantity impact the cost of the project. 17.3% - 25% of total construction costs
Finish and Fixtures The final touches and elements of the building, such as lighting, flooring, paint, and cabinetry, which contribute to the overall appearance and functionality of the building. 15% - 29.1% of total construction costs
Design The planning and creation of the building's layout, functionality, and aesthetics, typically a crucial component of the project that impacts the overall cost, as it determines the level of complexity and materials needed for the project. 4.5% to 16% of total construction costs
Plumbing The system of pipes, drains, and fixtures that distribute water and remove waste from the building, an essential component of any commercial construction project. 4.3% of total construction costs
Electrical Installation The system of wires, circuits, and fixtures that distribute electricity throughout the building, another essential component that can significantly impact the cost of the project based on its complexity and materials used. 4.2% of total construction costs
Permits The legal permissions and authorizations required by the government and other regulatory bodies for the construction of the building. 0.5% to 2% of total construction costs

Source: Proest

Other Costs to Consider

Aside from material and labor costs, here are some of the other fees you’ll need to look out for when building your commercial building.

  • Hard Costs - The direct expenses associated with the physical construction of the building, including labor, materials, and equipment costs, typically the most substantial portion of the overall project cost.
  • Soft Costs - The indirect expenses associated with the project, including design fees, legal fees, permits, and insurance, which can add up and significantly impact the overall project cost.
  • Long-Term Cost - The ongoing expenses associated with the maintenance, repairs, and utilities of the building after construction, which can significantly impact the overall cost of the building over its lifespan.

How to Estimate Commercial Building Costs 

Factors that affect the final price include the size, type of building, location, and design. The cost of labor, materials and building codes, and regulations can also vary depending on the location of the construction site, affecting the overall cost of the project. 

To ensure accurate cost estimates, research local labor rates and material costs, consult with local experts, and factor in other location-specific costs. Finally, it is vital to use technology such as AI estimating software to complete the takeoff process in seconds with 99% accuracy and shift your focus towards value engineering and finding suitable trade partners. 

Doing so will help you ensure competitive cost estimates and project proposals, and increase the overall profitability of your commercial construction project. Experience how Togal.AI can streamline your preconstruction workflow and help you bid on and win more work. 

Try out Togal.AI today.

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