Commercial building cost guide

Commercial building construction costs can range from $80 to $375 per square foot, with a small office warehouse costing around $45,000 and a big box store costing upwards of $1MM.

The final price will depend on design complexity, intended end use, level of finishing, and the geographical location of the building.

* square foot estimates are for the building shell, foundation, and construction, excluding interior build-out

Commercial building cost guide 2023

The cost of constructing a commercial building can vary significantly due to many factors. This introductory article explores the key reasons behind this variability. From location and site conditions to building size and complexity, we delve into the diverse elements that impact the overall expenses.

 

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Average Commercial Building Cost by Construction Method

The table below shows how the choice of materials and the construction method can significantly impact the cost of a new commercial building. These estimates include the cost of materials, construction, and foundation.

Here are some average commercial construction costs per square foot for the most popular construction methods.

 

Construction Material Cost Build Cost Finishing Cost TOTAL
Metal Stud Frame $25 - $35 $8 - $16 $50 - $250 $80 - $300/sq ft
PEMB * $20 - $35 $5 - $10 $50 - $250 $75 - $295/sq ft
Structural Steel $45 - $60 $10 - $20 $50 - $250 $105 - $330/sq ft
Tilt-Up $40 - 55 $50 - $70 $50 - $250 $140 - $375/sq ft

* pre-engineered metal building

Approximate Commercial Construction Cost per Square Foot

The cost per square foot for a commercial building can vary greatly depending on the level of finish required, the building's location, and a number of other factors, but here are some rough estimates for popular applications.

For simplicity, we will focus on the pre-engineered metal building method of construction, as this is one of the fastest and most economical methods for low-rise construction.

Building Type Size Approx. Cost
Small Office building 5,000 square feet $500,000 - $750,000
Small Industrial Building 10,000 square feet $900,000 - $1,300,000
Retail Car Dealership 20,000 square feet $2,400,000 - $3,000,000
Small Retail Box Store 50,000 square feet $3,500,000 - $5,500,000
Large Retail Box Store 150,000 square feet $10,000,000 - $13,000,000
Government Admin Office 20,000 square feet $5,000,000 - $7,000,000
Medical Office Building 30,000 square feet $9,000,000 - $13,500,000

Cost Breakdown for Commercial Office Warehouse Building

Commercial Office Warehouse Building

Why Choose a Metal Commercial Building?

Choosing a metal building offers many benefits, making it an attractive option for various commercial applications. This section explores the advantages of pre-engineered metal buildings, including their exceptional durability, resistance to fire and pests, energy efficiency, and design flexibility.

Reduced Construction Time & Build Cost
Pre-engineered components equate to 40% shorter construction times. Construction times for metal framed buildings are measured in weeks rather than months will adequate planning.

Reduced Time to Occupancy
Due to fast and efficient construction, your time to occupancy is also greatly reduced.

Long Warranties
PEMB buildings come with a minimum 25-year paint & 35-year structural warranties and require virtually no maintenance.

Energy Efficient
Save on heating & cooling costs. With the correct insulation, metal frame commercial buildings can be designed to be extremely energy efficient.

Inexpensive & Easy to Expand
Commercial structures can be expanded at a later date with minimal cost & disruption. Be sure to request 'expandable end walls' if you think you need to expand your building in the future.

Environmentally Responsible
Built with recycled materials and constructed with minimal waste metal, buildings are an environmentally responsible choice.

Insurance Advantages
Because metal is fire-resistant, you can save up to 40% on insurance premiums.

Attractive Finishing Options
PEMBs can be finished in various materials to suit your corporate identity.

 

For more details, see our main commercial metal building page.

Large Prefab Warehouse

Large Prefab Warehouse

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Other Cost Considerations

There are several other cost considerations to keep in mind when building a commercial building, including:

  1. Financing: The cost of financing the building project, including interest rates and fees, can significantly impact the overall cost of the building.

  2. Permits & Inspection Fees: Building codes and regulations vary by location, and obtaining the necessary permits, and passing inspections can add to the building project cost.

  3. Site preparation: The cost of preparing the construction site, including grading and utilities, can also impact the overall cost of commercial construction.

  4. Professional Fees: The cost of hiring architects, structural engineers, general contractors, and other professionals to design and oversee the building project can also add to the overall cost.

  5. Furniture, Fixtures & Equipment: The cost of purchasing and installing furniture, fixtures, and equipment for the building can also be a significant factor in the overall cost and will vary greatly depending on the intended end use of the structure.

  6. Ongoing Maintenance & repair: The cost of maintaining and repairing the building over its lifespan should also be considered. The construction methods outlined on this page are all extremely durable and require minimal ongoing maintenance.

Considering these and other cost factors carefully when planning a commercial building project to ensure it is completed within budget.

 

For additional price & cost data, see our main metal building prices page.

Square Foot Cost for a Prefab Commercial Office Building

Prefab Commercial Office Building

Commercial Building Construction Options

As previously mentioned, several construction options exist for erecting a new commercial building; here is a brief overview of each construction method.

Please note these cost estimates are for the building shell, concrete foundation, and construction, they do not consider interior finishing expenses.

Pre-Engineered Metal Building (PEMB)

Pre-engineered metal building construction is a type of construction method that involves using prefabricated metal components to construct a building. These components are designed and manufactured off-site, shipped to the construction site, and assembled into a complete building.

It is popular because it is fast, cost-effective, and requires minimal maintenance. However, it may not be suitable for all types of buildings, as it may not provide the same level of design flexibility as other construction methods. It should be noted, though, that this construction method is best suited to low-rise buildings of less than 30 feet in height.

Typical Build Cost: $20 to $35 per square foot

PEMB Commercial Building Construction Cost

PEMB Commercial Building under Construction

Light Gauge Steel Stud Framing

Light gauge steel stud framing is a construction method that involves using thin, lightweight steel components to frame a commercial building. The steel components, known as steel studs, are typically formed from galvanized steel and are available in a range of sizes and shapes to suit different construction needs.

Light gauge steel stud framing is also known for its fast and efficient construction and its ability to provide a high level of design flexibility.

Typical Build Cost: $20 to $35 per square foot

Light Gauge Steel Frame Commercial Building

Light Gauge Steel Frame Commercial Building
Credit: PSE Consulting Engineers

Structural Steel Framing

Structural steel framing is similar to PEMB construction in many ways apart from the fact that most of the cutting and welding is performed on-site rather than at the factory. This method of construction offers greater design flexibility and has no heigh restriction, making it an ideal choice for multi-story office buildings.

Typical Build Cost: $45 to $60 per square foot

Structural Steel Framing Commercial Office Construction Cost Data

Commercial Office Construction using Structural Steel Framing

Tilt Up Construction

Tilt-up construction is a type of construction method that involves casting concrete panels or walls on site and then tilting them into place to form the building's exterior walls. Tilt-up construction is a popular choice for commercial buildings, such as warehouses, distribution centers, big box stores and shopping malls, due to its fast and cost-effective build times.

In tilt-up construction, the concrete panels are cast on a flat surface, such as a slab, using forms and reinforcing steel. Once the concrete has cured, the panels are lifted and tilted into place using a crane. The panels are then secured to the building's foundation and other structural elements, such as columns and beams.

Typical Build Cost: $40 to $55 per square foot

Tilt Up Commercial Building Construction Costs

Tilt Up Commercial Building being Erected
Credit: Huff Construction

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Ways to Save on Building Costs

There are several ways to save on commercial build costs, including:

  1. Carefully planning the project: Taking the time to carefully plan the building project, including considering the size, design, and location of the building, can help to minimize costs.

  2. Use a design-build approach: A design-build approach can help streamline the construction process and reduce costs by combining the design and construction phases into a single process.

  3. Use energy-efficient systems and materials: Energy-efficient systems and materials can help to reduce energy costs over the lifespan of the building, which can save money in the long run.

  4. Consider prefabrication: Prefabricated construction is faster and more economical than on-site construction.

  5. Design complexity: Non-standard building shapes, layouts, and architectural features add to the overall cost; wherever possible, keep the design as simple as possible.

  6. Negotiate with contractors and suppliers: Working with contractors and suppliers to negotiate prices and secure discounts can also help to reduce costs.

  7. Use energy-efficient materials and systems: Choosing energy-efficient materials and systems can help reduce energy costs over the life of the building.

  8. Seeking financing options: Researching financing options, such as loans or grants, can help reduce the building project's overall cost.

  9. Consider the long-term costs of the building: While it may be tempting to cut costs in the short term, it is important to consider the long-term costs of the building, including maintenance and repair, to ensure that the building remains cost-effective over its lifespan.

By carefully considering these and other cost-saving measures, it is possible to reduce the overall cost of a commercial building project.

Common Questions

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

    The cost of constructing a 10,000-square-foot commercial building can vary greatly depending on various factors such as location, construction method, labor costs, design complexity, and the intended application of the building.

    On average, the cost per square foot for constructing a commercial building ranges from $50 to $275. Therefore, the total cost for a 10,000 sq ft commercial building can be estimated to be between $500,000 to $2.75 million

    However, this is only a rough estimate, and the actual cost will vary based on your specific project requirements.

  • How long can you depreciate a commercial building?

    The length of time over which a commercial building can be depreciated depends on the Modified Accelerated Cost Recovery System (MACRS) recovery period assigned to the property by the IRS. The recovery period for most nonresidential buildings is 39 years.

    However, there are different recovery periods for different types of properties, such as residential rental properties (27.5 years) and certain types of improvements to nonresidential real property (15 years). It's best to consult with a tax professional for more information about the specific recovery period for your commercial property.

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