How Much Does Office Space Cost?
How Much Does Office Space Cost?
On average, office space costs $313 - $660 per square foot to build, with fewer floor levels resulting in lower costs. But commercial construction projects, including office spaces, come with varying price tags. This is especially true with the many factors that impact the final construction costs, including size, labor, materials used, and location.
Thus, general contractors that bid on these projects must provide a fast and accurate cost estimate to ensure that all factors are considered. This helps them avoid any possible cost overruns that could ruin its profitability while increasing their chances of winning the project.
Major general contractors achieve this by streamlining the takeoff and cost estimation process. They do this by leveraging AI estimating software that helps them complete weeks of work in just 10 seconds with 99% accuracy.
Read further to learn more about the cost to build or rent an office space, the factors that impact it, and the AI takeoff software you can use to achieve a fast and human-error-free construction estimate.
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.
Office Space: How Much Square Footage Do You Need?
Size or square footage is one of the main factors that greatly impact both the construction costs and renting costs of an office. To determine how much office space is needed, first look at the number of employees that your company has.
On average, 75 sq. ft. is needed per employee. Thus, if you have a total of 30 employees, then you’ll need a 2,250 sq. ft. office space.
Renting Vs Building Office Space: Pros and Cons
The cost of office space is largely impacted by whether you rent or build the office from the ground up. Obviously, each approach offers varying costs, advantages, and disadvantages. Read the tables below to learn more.
Rent Vs Build: Estimated Costs
Source: Starter Story andBigRentz
Rent: Pros and Cons
Build: Pros and Cons
Office Space Rent Costs
How Much Does Office Space Cost in the U.S.?
The study conducted by Commercial Edge shows a snapshot of the top 50 priciest U.S. office submarkets during the fourth quarter of 2021. These were ranked by looking at the average asking rents per square foot. The result reveals that California submarkets took 27 of the 50 top spots in office rents ranking.
Read the table below to learn more about the priciest office space cost per square foot by city and state.
Top 50 U.S. Office Submarkets With the Highest Prices in Q4 2021
Source: CommercialSearch
How Much Does It Cost to Rent Office Space By Company Size?
On average, renting an office space costs around $2 - $23 per sq. ft. If the average square footage required per employee is 75 sq. ft., then a company with 50 employees will need to rent a 3,750 sq. ft. office space which will cost around $7,500 - $8,6250.
Read the table below for the estimated cost per company and office size. However, remember that this doesn’t take into consideration additional fees for added amenities, renovations, and installation of certain equipment.
Small Enterprise (10 - 49 employees)
Source: Starter Story
Medium-Sized Enterprise (50 - 249 employees)
Source: Starter Story
Large Enterprise (250+ Employees)
Source: Starter Story
Office Space: Tenant Improvement Costs Per Square Foot
Tenant improvement costs refer to the expenses incurred by the landlord or property owner to customize a commercial space, such as an office, for the specific needs of the tenant. This can include the cost of construction, renovation, and installation of fixtures and finishes, as well as other expenses related to the customization of the space.
Tenant improvement costs are typically negotiated between the tenant and landlord as part of the lease agreement and may be covered in whole or in part by the landlord. Here are some of the potential costs you should expect:
Source: Globest
Office Space Construction Costs
How Much Does Office Space Cost Per Type?
The cost to build an office per square foot is largely impacted by whether you’re building a single-story building, mid-rise, or high-rise. A single-story building usually costs $313 per sq. ft. A mid-rise office space costs $562 per sq. ft., and a high-rise office space costs $660 per sq. ft.
The more floors in the building, the greater the need for structural support to withstand strong winds and earthquakes. Thus, requiring structural specialists and other construction experts, along with sturdy and high-quality materials that will surely bump up the cost.
Cost to Build an Office Building Per Type
Explore the varying office building construction cost per square foot, depending on the type, namely single story, mid rise, and high rise.
Office Build Out Costs
A high-end office build-out can cost around $243 per square foot. It's normal to expect to pay more per square foot for an office buildout, even if the company chooses a traditional office floor plan with dedicated offices and desks.
The average cost per square foot of an office build-out with bench-style seating and smaller collaboration and meeting rooms is between $194 and $221. But it can also reach up to $257 per square foot if you’re opting for higher-quality custom flex spaces.
Office build-outs that incorporate workstations in an open setting with private offices and collaborative workspaces can cost around $205 - $275 per square foot.
Lastly, build-outs with a higher percentage of large conference rooms and private offices can cost between $212 - $290.
Source: Crexi
Cost to Build an Office in the U.S.
Location impacts land costs, material prices, labor costs, and the permits needed. For example, a location that’s prone to earthquakes will require stricter building requirements which will increase material and labor costs.
Review the table below to learn more about the average construction costs of offices per city as of 2021.
Office Building Construction Cost Per Square Foot and Per City
Shown below are office building construction costs per square foot in select cities in the U.S. For prime office buildings, New York has the highest office construction costs per square foot while Portland has the lowest, with $272.50 per sq. ft. For secondary offices, San Francisco has the highest construction costs while Las Vegas has some of the lowest.
Source: Statista
Office Space: Material Costs
Here’s a commercial construction cost breakdown, focusing on the material expenses needed when you build an office space.
Sources: Various Sources
Office Space: Labor Costs
Here are some of the labor costs that you need to consider when building office space.
Source: HomeAdvisor and HomeGuide.
Commercial Building Costs: Office Space vs. Other Building Types
How much does it cost to build a commercial building? Well, it varies depending on the building type. This is because, depending on the building type, the overall purpose of the space changes. For example, restaurants and hospitals need smoother surfaces to encourage a sterile environment, while medical centers need a space large enough for large medical equipment.
Office buildings typically have more expensive commercial construction costs compared to schools and retail due to their specific requirements for larger floorplates, high-tech systems, and specialized finishes. However, they are less expensive than community buildings and medical centers to build due to the latter's specific requirements for complex mechanical and electrical systems, specialized equipment, and stringent safety regulations.
Commercial Construction Cost Per Square Foot
Source: Big Rentz
Source: Big Rentz
How Much Does It Cost to Buy a Business Building
In the first quarter of 2023, U.S. offices cost a little over $38 per square foot. Check out the table below for a summary of average commercial rates in select U.S. cities.
Estimate Office Construction Costs in Seconds with Togal.AI
A wide range of factors can influence the cost to build office spaces, such as the type, size, and materials used. For faster and more accurate pricing, leverage our AI estimating software, Togal.AI.
With Togal.AI, you can complete the takeoff of commercial office spaces in seconds with 99% accuracy.
- Save roughly 90 minutes per sheet.
- Remove extra overhead and cut down on preconstruction costs.
- Eliminate error-prone manual calculations.
Experience how Togal.AI can streamline your workflow and increase the profitability of your office construction projects. Take a tour, try out Togal.AI or book a custom demo today.
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