How To Calculate Commercial Construction Cost Per Square Foot (In 2022)

Jamie Jacobs
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  • As you start to approach the need for a commercial building, you’ll likely need to start working on a budget.

    Before you start working on the budget, you’ll need to decide what type of building your business will need and what type of features it will include. For example, a warehouse will be much cheaper than a medical building simply because of what needs to be included.

    Here at APX Construction Group, we do our best to provide you with the best possible value combining quality and affordability. Today we’ll cover the average cost per square foot for commercial construction projects. However, these prices can change and fluctuate with the cost of materials.

    Cost per square foot based on building type:

    • Single story office $250-$437
    • Mid-Rise Office $330-$870
    • High-rise Office $430-$1001
    • Government administrative buildings $426-$844
    • Museum/ Performing arts $650-$1272
    • Medical Office Buildings $451-$1018
    • Recreation/ Gymnasiums $347-$683

    Types of Commercial Construction

    Different types of construction projects can impact the cost of your building, and some of the different types of commercial building projects include:

    • Restaurants
    • Retail, Grocery Stores, Shopping Malls
    • Medical Facilities
    • Office Buildings
    • Hotels and Lodging Facilities
    • Institutional Buildings
    • Industrial Structures
    • Sports Facilities

    Within each of these individual project types, specific factors can raise and lower the prices. Below we’ll cover a few of those factors and why you should be on the lookout for ways to save money the next time you undergo a commercial construction project.

    It’s important that no matter who you’re working with, you’re treated with respect and given the best possible service.

    types of construction

    What Determines the Cost of Commercial Construction

    Beyond the type of building that you choose for your business, several factors play a part and have a role in how much that building will cost. Here are some of those factors:

    • Amount of land purchased
    • Location of building
    • Permits and legal work needed
    • Time of year the project is completed

    Cost Breakdown for Commercial Construction Project

    The individual items that make up the cost of a commercial building are all very similar to what you would expect for residential construction or home. Here’s how you can expect your commercial building cost to break down.

    • Foundation and foundation materials
    • Labor
    • Materials
    • Location (Region)
    • Finishing and fixtures
    • Design
    • Major systems and utilities
    • Permits/Legal
    • Land

    Each of these items will break up the cost and impact what you’ll end up paying for your commercial building. There are, of course, always ways that you can save some money throughout these different parts of the construction process. Be sure to talk with your builder to get the best bang for your buck.

    Foundation and Materials

    When it comes to commercial construction, one of the most expensive items will be your foundation. Because commercial buildings can be very large, the amount of concrete, rebar, and other structural materials needed is large. Additionally, the ground will need to be prepared and excavated before the foundation can be poured.

    Labor

    Labor for commercial construction projects can be one of the most expensive parts. The labor will almost always make up 50% or more of the cost of a commercial building. You can save money on labor by working with a completely in-house team like APX Construction.

    Location or Region of the Building

    The location of commercial buildings can have a major impact on the cost. In general, commercial building costs will be higher in urban areas because you’ll be paying for the cost of commercial real estate. However, there are ways that you can offset this by working with a commercial builder who has experience in commercial construction in your region. Rural regions are always a bit cheaper with fewer regulations to adhere to.

    Finishings and Fixtures

    The commercial construction cost will include finishes and fixtures. These items can impact your commercial building costs significantly. Higher-end finishing and fixtures will cost more than some of the more affordable options. Low-end finishes are much more affordable, but you might be sacrificing longevity and quality. We recommend finding a good in-between and talking with your builder to ensure you get the best quality. 

    Design Phase and Engineering

    The commercial building process will require an architect and/or engineer to work with the builder on designing your commercial project. This can take some time and money to get right. One way to save money during this process is to partner with a builder who has both a designer and engineer on staff. Again, this will save you time and money during the process.

    design and engineering

    Major Systems and Utility

    Major systems include plumbing, electrical, and HVAC. All of these systems will be more expensive when a commercial grade is required. Larger HVAC units along with plumbing and electrical systems will drive the commercial building cost up.

    Permits for the Project

    Permits and legal work are both required for commercial building projects. You can expect to pay a fee for obtaining these permits and working the legal side of getting your commercial building permit.

    Land

    The land for the project is another large expense to keep in mind. The commercial building cost will include the land for your commercial building. There are methods to save money here as well. One way is purchasing a commercial property that’s already had a commercial building on it, or that’s been previously zoned for a commercial property.

    Calculating the Cost of Your Commercial Building

    To get a good idea of how much your commercial building will cost, you’ll have to add up some of the different elements we’ve talked about above. Here are some of the average costs per square foot for different building types. Keep in mind these are just averages, and there are a lot of variables that can impact the price.

    Cost per square foot based on building type:

    • Single story office $250-$437
    • Mid-Rise Office $330-$870
    • High-rise Office $430-$1001
    • Government administrative buildings $426-$844
    • Museum/ Performing arts $650-$1272
    • Medical Office Buildings $451-$1018
    • Recreation/ Gymnasiums $347-$683


    Reach out to APX Construction Group today to get started on an estimate for your building project. Estimates can take time on these complex projects, so be sure to reach out ASAP, and we can get to work on your project.

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