Making your next commercial building project successful starts with anticipating and estimating costs. In the currently volatile real estate and construction markets, the difference between an accurate estimation and one that fails to incorporate all potential variables is enormous. To bring a project in on time and under budget, you need a realistic projection down to the square foot so that you can allocate resources accordingly. The most common unit of measure used to estimate costs for commercial buildings is cost per square foot.
Generally, the two most important variables to estimating the commercial cost per square foot are size and quality. Size meaning total square footage and quality pertaining to the grade of materials being used. Location is a third factor, with coastal areas in the US tending to have much higher construction costs compared to midwestern and southern regions. This is because the value of the land, labor and infrastructure is in higher demand. Still, the profit margin on any project starts with an accurate cost and materials accounting.
The following is intended to be a general set of guidelines, including factors to consider when formulating a general cost per square foot analysis. To accurately and affordably estimate your next non-residential construction project, contact Chianelli Estimating.
Types of Building Class
Veterans of the construction business who are familiar with building class will know that while they are more of an art than a science, the building class system is an effective shorthand. It can help builders anticipate costs per square foot for non-residential property and understand what factors contribute to them. Although no formal classification standard is enforced by government or private agencies, these are conventionally accepted.
Class A buildings represent the highest-standard structures in the US market. A Class A commercial structure receives this designation due to its architecture, amenities, materials and location. These structures also tend to occupy prime locations.
For those constructing a Class A building, expect to install up-to-date HVAC systems, use sustainable building materials and have amenities like parking garages that make them great places to live and work.
A step down from Class A, these buildings are typically located in less affluent locations and are typically no taller than four stories. They do not have the same amenities as some commercial construction projects but some can be renovated to gain Class A status.
Class C is the lowest class. These buildings are often the oldest and can be run down. If a Class C building is built new, it often uses the cheapest available materials. It will have very few, if any, amenities and only provides the bare essentials in terms of plumbing, heat and electricity. Class C is the least expensive to build and can often be cheaply renovated, if they aren’t too dilapidated. Still, a Class C space and be a functional and comfortable office space.
Building materials contribute to commercial construction costs a great deal. For instance, mass produced, prefabricated materials are usually much less expensive than specialty or custom materials. Materials more suited for winter or seasonal climates can carry additional cost. Very common in some types of projects, recycled materials can widen margins and can contribute to eco-friendliness.
Pandemic-related supply chain bottlenecks make access to cheap non-residential building materials in volume difficult and expensive. Depending on the size and scale of your building, some of these materials may not be economical or viable. However, don’t simply consider how cheaper, more cost-effective wall-framing materials can be used to lower commercial construction cost per square foot. Also investigate them for building walls and other elements of the structure’s interior.
Your structure’s architecture also plays a role not only in the amount of materials used but in the total cost per square foot. Taller buildings tend to be more expensive. Materials, even if inexpensive and common, can add to costs when used in non-standard ways or in uncommon configurations. You may also need different types of building equipment for longer in order to render complex architecture.
For commercial construction projects, labor can range from 20% to 40% of the total cost. Projects taking place inclimate weather can mean a premium wage for workers. Add in a pandemic labor shortage with no end in sight, and hiring affordable help can be a challenge.
HVAC and Electric
A commercial structure’s heating, cooling and electrical systems comprise a significant portion of commercial building costs. As such, it is recommended that project planners engage installers of these systems early in the process. Modern green or energy-efficient HVAC and electrical systems may be more difficult to install and can require specialized labor, further adding to costs.