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Cost Per Square Foot For New Commercial Construction

How much does it cost to build a commercial building? There is no quick answer and without more information about the project and its location, however, there is some guidance provided we know where you are located and what kind of building you are looking to build. Local economy is a very important factor in construction cost as well as the type of construction you intend to build.


Have The Commercial Real Estate Specialists provide complete cost per square foot analysis to include competing estimates and contractor write ups! For around $2200 you could save time and hassle by having us deliver the information you're looking for. Contact us for more details.


Below different types of commercial construction and the varying cost per square foot to expect for each in different regions.  All graph images are courtesy of RSMeans Construction Cost Data.  Note that not all types of construction cost the same per square foot, and even more importantly, the cost of construction per square foot varies significantly with location, numbers below are for informational purposes only and to be used at your own risk.

Construction Cost per Square Foot by Region
One Story Office Building

 


Construction Cost per Square Foot for Hotels, Motels and Apartments

Hospitality and multifamily design have many common factors and we have worked on many projects in both sectors. This post is specifically focused on the construction Cost per Square Foot for Hotels, Motels and Apartment Buildings across several regions in the United States.

 

Construction Cost per Square Foot of 2-3 Story Motel
When looking at the range of cost per square foot, location can represent as much as three-quarters of the cost driver for the example property. The median for this type of build is below $200 per square foot. As you might expect, Metropolitan New York is the most expensive city to build in at  well over $200 per square foot. 

 

Construction Cost per Square Foot for 4-7 Story Hotel
Building vertically can provide an economy of scale for structures, and that is noted with hotel construction. As these costs are spread out over higher square footage, we see a median figure in the mid $160 range with $217 on the high end and $124 on the low.

 

Construction Cost per Square Foot multi-level Story Apartment Building 
At the low end of the cost range is the multi-level story apartment building. Similar to the Hotels, using vertical construction, apartment buildings also are not required to have the variety of features that are  seen in a hotel. While amenities will  vary project to project, on average, apartment median costs are in the low $160's per square foot with a range of $120 to over $200.

It is important to understand the drivers for any commercial project cost and how building, construction and location can all be variables that will drive your cost. We discuss this with you from the beginning.

Construction Cost per Square Foot for 8 to 24 Story Apartment building

 

Construction Cost per Square Foot for High-Rise Apartment building
As we have seen for almost all projects in the previous research, The northeast corridor has the highest cost per square foot for these project types while the south as a region is among the lowest. The median cost per square foot is a little more than $200.

Apartment buildings tend to have a lot of amenities and services from specialty retail and restaurants within a larger mixed use program, while affordable housing apartments generally do not offer these features.


Construction Cost per Square Foot for Hospitals

Let's look at other types of properties, mid-sized and full-sized hospitals. The dollar-per-square-foot cost scales down for the larger type of structure.

Construction Cost per Square Foot for 2 to 3 Story Hospital

 

Construction Cost per Square Foot for Mid-Sized Hospitals
Not surprisingly, for both sizes, New York ranks highest while cities in the South are among the lowest. The median for this type of property is just above $300 per square foot while the median for larger hospitals is just below $300 per square foot.

Construction Cost per Square Foot for 4 to 8 Story Hospital

 

Construction Cost per Square Foot for Full-Size Hospitals
The economy of scale is evident in the taller structures, and this often drives decision making at the outset of a project. It is also important to note that facility management and operation costs are also less for taller hospitals than for fewer stories.

Every facility is different, however, and has a wide variety of specialties that set it apart from other buildings. For example, Some hospitals are well known for their technologically advanced resources while others may be more focused on long term care, pediatric or therapeutic care, which could have lower cost requirements for those facilities.


Price Per Square Foot Construction Cost for Medical Office Buildings

It is well known that Medical Office Buildings are very expensive per square foot due to the integrated systems required in the buildings. Below is a chart construction cost data that illustrates the cost per square foot for new construction sorted by region from the most expensive to the least expensive.

 

Price per square foot construction cost for medical office building
The chart shows a significant spread in cost per square foot by geographic location - as much as 74% increase from the lowest (Winston-Salem) to the highest (New York). The average cost per square foot hovers around $220 per square foot. These buildings can also vary significantly depending on the specific uses and the technologies employed within the offices. For more specific information regarding the cost of an individual medical office building to suit your requirements, please contact us.


Construction Costs per Square Foot for Nursing Homes by Region
Construction Cost per Square Foot for Nursing Homes

 

Construction Cost per Square Foot for Nursing Homes
The construction cost chart illustrates that the most expensive city to build is New York, with the Southern Cities having lower costs per square foot. The Median cost per square foot for Nursing homes falls around $160 per square foot.

These costs are indexes based on averages across a wide variety of projects with various programs. Long Term Care facilities have a wide range of programs and functions that can drive costs. For example, therapy gyms, swimming pools, spas and various other high tech amenities for residents available in higher end facilities can push the costs per square foot higher.


Price Per Square Foot Construction Cost for Office Buildings

 

Price per square foot construction cost for two to four story office building
For the most common office building size, two to four stories tall, the range is from just over $130 per square foot in Winston-Salem to over $230 per square foot in New York. The spread here is largely due to the local cost of labor and regulations that allow various construction types that are allowed in low rise construction. For example, in some cases where wood frame construction is still allowed, depending on location and occupancy, this would help to keep costs lower. In areas that are restricted to non-flammable construction, price per square foot will go up.

By taking advantage of savings provided by vertical construction, you will see approximately a 4% savings in cost per square foot by increasing the stories to between five and ten stories. While one might expect a larger savings for that economy of scale, several new requirements come with the mid-rise building that are often not dealt with on the low rise buildings. For example, elevator shafts and service corridors get more complicated as well as HVAC systems.

 

Price per square foot construction cost for five to ten story office building
The geographic spread in cost per square foot is identical to the low-rise data. This is still principally driven by local factors such as labor costs and local regulatory requirements.

Finally, the high rise buildings see the most economic cost per square foot. For buildings between eleven and twenty stories tall, there is approximately an 11% savings over the mid rise buildings and 15% over low rise. This is largely due to the fact that similar elevator, HVAC and service equipment requirements are required for mid and high rise, resulting in more economy of scale for going up.

 

Price per square foot construction cost for eleven to twenty story office building
Again, the geographic spread is still the same, telling us that the cost per square foot is very sensitive to geographic location. Note that over twenty stories starts getting into more unique building characteristics that will drive costs in various ways.

Disclosure: For planning purposes only. Costs vary greatly specific location to location. Contact THE CRES for your project specific needs. User bares all risk.


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