Commercial Building Cost

A Guide to commercial construction options and costs

Cost to build a commercial building and construction options

What does it cost to build a commercial building?

The cost to build a commercial building can vary widely, with an average range of $30 to $90 per square foot for the materials and labor. A small office warehouse may start at around $45,000, while a large box store could cost upwards of $1 million.

The final cost will depend on factors such as the materials used, the construction method, the location, and the level of interior and exterior finish required.

 

 

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 build 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

Approximate Commercial Building Cost per Square Foot

Commercial building cost per square foot can vary greatly dependent upon 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

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Why Choose a Metal Commercial Building?

Although material costs for pole barns and pre-engineered metal barns are similar, consider the following advantages metal construction has to offer:

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.

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 the building.

  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

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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 and foundation and do not take into account interior finishing costs.

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

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 many exits are required in a commercial building?

    The number of exits required in a commercial building depends on the occupancy and size of the building and local building codes.

    Generally, the International Building Code (IBC) requires that a commercial building have at least two exits, but additional exits may be required for larger buildings or buildings with higher occupancy levels.

    It is essential to consult with local building codes and a licensed architect or engineer to determine the specific number of exits required for a particular building.

  • How many bathrooms are required in a commercial building?

    The number of bathrooms required in a commercial building depends on the occupancy and size of the building and local building codes. Generally, the International Plumbing Code (IPC) requires a certain number of plumbing fixtures (toilets, urinals, sinks, etc) per occupant in a commercial building. The specific number of fixtures required depends on the type of occupancy and the number of occupants the building is designed to hold.

    For example, a commercial office building is required to have one bathroom with a sink per 20 occupants.

    It is important to consult with local building codes and a licensed architect or engineer to determine the specific number of bathrooms required for a particular building.

  • 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.

  • What is a flex commercial building?

    A flex commercial building typically refers to a type of commercial real estate designed to be adaptable and flexible to accommodate various uses.

    Flex buildings are often divided into smaller units, which can be leased to different tenants for different purposes, such as office space, retail space, light manufacturing, or warehousing.

    The goal of flex commercial buildings is to provide a versatile and cost-effective solution for businesses that need to change their space configuration as their needs evolve.

    Flex buildings are often found in industrial parks, and near airports, highways, and other transportation hubs. They're also known as multi-use buildings, mixed-use buildings, or hybrid buildings.

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