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How to Calculate the Commercial Construction Cost Per Square Foot

When working with a commercial general contractor to achieve your commercial building plans it's important to understand how much your project is likely to cost and what factors influence total price. Whether you're building an office building, a manufacturing plant, or a retail outlet we detail some of the key costs to look out for and the average commercial construction cost per square foot. Fortress Home in Chicago, an experienced commercial general contractor, would love to collaborate with you on your latest commercial endeavor. Call us today at +773-770-8607 or email [email protected]

Factors affecting the commercial construction cost per square foot

When it comes to calculating the square foot costs for commercial construction there are many different things that will impact the construction costs.

Location

The location will have a large impact on the construction cost per square foot, due in part to the cost of land in different states, and in between rural and urban areas. In New York City an acre of land for construction can cost around $5 million, whereas an acre of land in Illinois is only $23,000. This will have a huge impact on the commercial building construction cost and explains why there are so many skyscrapers in cities like New York, as you get a lot more square footage of usable space per square foot of land.

The climate and geology in specific locations will also impact the overall construction costs of commercial projects.


If you're building in an earthquake zone there will be much stricter building requirements than in a more geologically stable area. And if you're building in a very cold state with heavy snowfall, you'll need to factor extra structural strength, insulation, and heating systems into the costs.

Hard and soft costs

When you are looking at commercial construction costs per square foot it's important to understand whether both hard and soft costs are included. Many quotes will only include the hard costs.

Soft costs

Soft costs are all the costs required for a commercial construction project, excluding the actual construction costs. They are more often fixed and easier to estimate and will include:

  • Architectural plans
  • Building permits
  • Inspections
  • Legal fees

Hard costs

Hard costs include all the physical commercial construction costs including all the labor and materials costs. They can include:

  • Labor costs
  • Building materials
  • Foundations
  • Framing and structural work
  • Exterior finishes
  • Interior build-out and finishes
  • Plumbing, electricals, and HVAC
  • All fixtures and fittings

Material quality and finishes

The type of building will play a large part in the type of materials and finishes required. For example, a simple warehouse, without temperature control, will require far simpler materials and finishes than a luxury resort.


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Types of commercial building construction

There are many different types of commercial buildings, each of which will have different requirements and fit-out and finish costs. All the following figures are 2021 costs for Chicago Illinois, thanks to Cummings Insights.

These figures don't include land costs or soft costs - only hard costs are included. They include full construction and interior build-out, within the Chicago city limits.

Office buildings

When constructing office buildings there is a wide range of options from a single-story office building all the way to mid and high-rise buildings. If the office units are being built to be rented out to different customers they may not be fully built out, as the new residents will want to do the finish and layout to suit their particular business. Whereas if the structure is for a single client they may want to have the building fully fitted out as part of the construction project.

Average costs per square foot for different types of office buildings, including build-out:

  • Single-story: $332 - $399
  • Mid-rise: $663 - $795
  • High-rise: $761 - $914

Retail outlets

When you think of commercial buildings, retail buildings probably spring to mind. Retail construction can be split into two categories. Smaller local strip malls are much cheaper to build at approximately $343 - $411 per square foot. Larger shopping malls are more costly, often with high-end fittings, costing around $511 - $613 per square foot.

Hotels

When looking at the average commercial construction costs for hotels one of the major factors affecting the price per square foot is the class of hotel and therefore the standard of building materials and finishes used.

A standard three-star hotel, with mid-level finishes, will cost from $483 to $635 per square foot. However, when it comes to a luxury five-star hotel you can expect to pay approximately $648 - $906 per square foot.


Manufacturing facilities

In the category of manufacturing facilities, there are various types of commercial buildings including factories, warehouses, and laboratories for technology companies. Warehouses cost between $206 - $320 per square foot, less than half the cost of technology laboratories which cost around $666 - $798 per square foot.

Healthcare facilities

Every community needs healthcare facilities and this type of construction can range in price depending on the level of the facilities. Acute care facilities, like hospitals, can be very expensive to fit out, as can be seen below. They require very specialist wiring and air control, as we've learned from recent years with the necessity of negative pressure rooms. Medical clinics and office buildings are less costly, although many clinics will require very precise specifications.

  • Acute care facilities: $835 - $1,113
  • Medical office buildings: $475 - $570
  • Specialty clinics: $594 - $713

Educational institutions

When you think about commercial buildings you don't always think about educational institutions such as schools and universities, but building one is still a commercial construction project.

Schools are generally cheaper to build than universities, as they have simpler facilities. For example, universities may have high-tech lecture theatres and laboratories.

Average costs, per square foot for educational buildings:

  • Elementary school: $262 - $314
  • Middle school: $287 - $344
  • High school: $315 - $378
  • University classrooms: $586 - $703
  • University laboratories: $809 - $971
  • University dormitories: $315 - $388

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Parking structures

One of the cheapest commercial buildings to construct is a parking structure. They don't require insulation and the most important specification is structural strength, in order to hold the weight of hundreds of cars.

Above-ground parking structures are the cheapest to build at only $68 -$89 per square foot. Underground parking structures are increasingly more popular in highly developed urban areas as they don't take up any valuable above-ground space. Commercial construction costs for underground structures are more expensive as excavation and structural reinforcement costs are higher, meaning that underground parking structures cost on average $154 - $188 per square foot.

Public facilities

Commercial construction costs for public and community buildings have a wide range of costs per square foot, from recreation and sports facilities starting at $499 per square foot, all the way up to museums and performing arts facilities which can cost as much as $1,162 per square foot. This category also covers public buildings including police stations and government offices and other government buildings.

  • Recreation and sports facilities: $499 - $416
  • Police stations: $605 - $725
  • Government buildings: $634- $767
  • Performing arts and museums: $930 - $1,162

Frequently Asked Questions

How much does it cost to build a 10,000 sq ft commercial building?

The commercial construction prices for a 10,000 square foot commercial building will depend very much on the exact type of building you are looking for. If you are looking for a 10,000 square foot above-ground parking structure it may cost as little as $680,000, But for a high-end 10,000 square foot museum or performing arts facility, it could cost as much as $11.6 million.

How do you calculate commercial construction costs?

When you want to calculate the commercial construction cost per square foot it's very important to know the location of the building, the type of building, and the specific construction and fit-out specifications for the commercial building. Each of these factors will have a huge impact on the commercial construction cost per square foot.

When you want to begin a commercial project we recommend you speak to specialist commercial general contractors with experience in your city or area.


With their specialist knowledge of the local labor, materials, and planning regulations they will work with you to calculate a more accurate commercial construction cost breakdown.

If you're in Chicago, speak to Fortress Home today to discuss the specific commercial construction costs per square foot for your project. Contact us now on +773-770-8607 or email [email protected]

What is the average commercial price per square foot?

When asking about the average construction costs for commercial buildings you have to know what type of building you want to construct and where you want to build it as the average cost per square foot of commercial construction by region varies greatly.

For example, in an expensive city like San Francisco, the price per square foot for a high-rise building is between $833 - $1,001 but in Denver, it would only cost between $345 - $485 per square foot.

How much does it cost to build large commercial buildings?

Commercial construction pricing changes based on many factors, including the type of building, the exact specifications, the size, and the location. Without more data on these other factors, it's impossible to give approximate commercial construction building costs.

Commercial building experts in Chicago

In Chicago when you need a commercial construction project completed on time, to budget, and to a very high standard of quality, contact Fortress Home. With over 20 years of building commercial and residential structures throughout the greater Chicago area, they will ensure your commercial building project is a success.

Call now: +773-770-8607 or email [email protected]

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