How much does commercial construction cost per square foot?
How much does commercial construction cost per square foot?
$240 – $870 average cost per square foot
Commercial construction cost per square foot
Commercial construction costs $240 to $870 per square foot on average, depending on the location and building type. Commercial projects in the Midwest and South typically cost less than on the East or West coast. Warehouses and parking garages cost less to build than high-rise office buildings, museums, or five-star hotels.
| National Average Cost | $560 |
| Minimum Cost | $70 |
| Maximum Cost | $1,270 |
| Average Range | $240 to $870 |
Cost of commercial construction by region
The following table shows the average cost to construct a commercial building depending on its location in the U.S.:
| Region | Average cost per square foot |
|---|---|
| West | $380 – $850 |
| Midwest | $270 – $760 |
| South | $240 – $680 |
| East | $350 – $870 |
West
Commercial construction costs $380 to $850 per square foot on average in western states. Building in cities like San Francisco, San Diego, Las Vegas, Seattle, or Sacramento costs more than almost anywhere else in the country. The western U.S has many coastal cities and eco-friendly structures, which drive up building costs.
Midwest
Commercial construction projects in the Midwest cost about $270 to $760 per square foot. Cities like Chicago, Columbus, and Omaha cost more than small Midwest towns. The cost for commercial buildings in the Midwest varies because it has a wide range of climates.
South
Commercial building in the southern U.S. costs $240 to $680 per square foot on average. Construction in cities such as Atlanta, Dallas, Miami, and Orlando costs more. The warmer climate in the South typically means a shorter construction time with fewer weather delays.
East
Commercial construction costs $350 to $870 per square foot in the Eastern U.S. This region includes metro areas like Washington D.C., Philadelphia, New York City, and Boston, which are some of the most expensive cities in the country to build in. Winter weather and frozen ground in the northeast also impact the construction timeline.
Commercial buildings tend to perform better when built near a successful, well-known business like Starbucks, Walmart, or Target.
Cost of commercial construction by type
The cost of a commercial building depends on its purpose, as different building types require different features and materials. High-rise office buildings, museums, and five-star hotels are typically the most expensive to build. Warehouses and parking garages cost the least.
| Type | Average cost per square foot |
|---|---|
| Office building | $240 – $1,000 |
| School or university | $300 – $840 |
| Manufacturing facility | $210 – $800 |
| Hospital or clinic | $450 – $1,020 |
| Hotel | $130 – $550 |
| Apartment building | $150 – $400 |
| Community building | $430 – $1,270 |
| Shopping center | $370 – $580 |
| Parking | $70 – $210 |
Office building
The construction cost for office buildings depends on the size and number of floors. The average cost is $240 to $440 per square foot for a single-story building, $330 to $870 per square foot for a mid-rise building, and $430 to $1,000 per square foot for a high-rise building.
Multi-story offices typically cost more because they tend to use more expensive building materials, cost more in labor, and have stricter building codes.
School or university
Educational buildings cost $300 to $380 per square foot for elementary, middle, or high school buildings. The cost of university buildings depends on the type:
Dorms cost $300 to $350 per square foot.
Classroom buildings cost $500 to $660 per square foot.
Administrative buildings cost $550 to $650 per square foot.
Laboratory buildings cost $700 to $840 per square foot.
Manufacturing facility
Manufacturing facilities cost $210 to $800 per square foot, depending on their purpose. Warehouses cost much less than technological laboratories. Any building with advanced electrical or security systems will cost more.
Hospital or clinic
Hospitals, primary care clinics, or healthcare facilities cost $450 to $1,020 per square foot, depending on the type. Medical clinics or offices are typically on the lower end of the range, followed by specialty clinics and critical care facilities.
Hotel
The cost to build a hotel is $130 to $550 per square foot on average, depending on the type of hotel, size of each room, features, material quality, and location. A three- or four-star hotel costs less to build than a five-star hotel with luxury features and accommodations.
Apartment building
Building an apartment complex costs $150 to $400 per square foot, or $3.8 to $30 million for a mid-rise complex with 50 units. The final price depends on the size of each unit, location, and materials used. Any apartment complex with more than 5 units is considered a commercial building.
Community building
Public community buildings cost $430 to $850 per square foot for police stations, government administrative buildings, or leisure facilities. Museums and performing arts buildings cost $650 to $1,270 per square foot.
Shopping center
Shopping centers and malls cost $370 and $580 per square foot to build, not including the cost for parking structures. Large, open-air shopping centers or malls with indoor entertainment centers, restaurants, or movie theaters cost more than small strip malls.
Parking garage
Building a parking garage costs $70 to $210 per square foot, depending on the type. Multi-level, underground parking garages cost much more to build than flat, above-ground parking lots.
Commercial building cost calculator
The following factors influence the cost to build a commercial structure:
Quality – High-quality building materials and amenities are more expensive but tend to last longer and draw in more business than standard fixtures and amenities.
Location – Building in large cities like Los Angeles or New York City costs more due to higher cost of living and limited space.
Land – You’ll have to buy or finance the land you want to build on before starting construction or hiring an architect.
Site prep – Preparing the site for construction may require land clearing, excavation, or grading. You'll also need to run new utilities to the site, which may incur local impact fees in addition to the installation costs.
Building permits – Permits are typically included in the general contractor's estimate. Permit costs depend on the city, so check the local regulations in advance.
Maintenance – After construction, you’ll have ongoing expenses for utilities, janitor services, security, management fees, landscaping costs, and other relevant maintenance fees.
Business signage – A business sign costs $2,000 to $5,000 installed on average, but costs can reach $200,000 for a lighted, double-sided pylon business sign visible from the highway. Prices depend on the sign's size, material, design, and features.
Labor cost
To build a commercial building, you’ll have to hire several professionals to design the building, make sure the land and plans are safe, and coordinate the construction:
An architect charges $100 to $250 per hour.
A structural engineer charges $100 to $220 per hour.
A general contractor costs $50 to $150 per hour.
An electrician charges $50 to $130 per hour.
A plumber charges $45 to $150 per hour.
How to save money on commercial construction projects
Follow these tips to save money on a commercial construction project:
Value engineering – Value engineering keeps costs low while improving the functionality of a product. This encourages innovation during the project.
Sustainable construction – Using sustainable construction practices often requires a higher upfront cost but saves money in the long run. Some examples may include:
Using recycled materials
Emphasizing durability
Using energy efficient materials
Using water-saving equipment
Bulk purchasing – Buying materials in bulk can save time and money on a commercial construction project. Suppliers will often offer discounts when purchasing large quantities of supplies.
Renting Equipment – Instead of buying new equipment for just one project, consider renting equipment. This saves money while giving your team access to top-of-the-line tools for less.
Commercial construction FAQs
What is a commercial building?
A commercial building is a structure in which at least half of its square footage is used for retail, food service, or other operations that serve clients in some way. This includes stores, restaurants, warehouses, museums, hospitals, hotels, schools, or office buildings.
What is the difference between commercial and residential construction?
Commercial buildings are used to provide a service to customers or community members, while residential buildings are used primarily for small-scale homes, which includes single-family homes, townhomes, or duplexes.
Apartment buildings and condominiums with 5 or more units are residences, but they fall under the commercial category because they’re primarily designed to make money on a larger scale.
How long does it take to build a commercial building?
A straightforward commercial building typically takes 4 to 6 months to build. However, for larger complex structures, the construction may take 8 to 10 months. The timeline depends on the type of structure, climate, and material delays.
When are fire sprinklers required in commercial buildings?
The National Fire Protection Association (NFPA) requires fire sprinklers in all commercial buildings with the following characteristics:
Buildings with 5,000 square feet or more
Remodeled buildings that exceed 12,000 square feet
Townhomes with more than 2 units per building
Buildings that are more over 55 feet tall
Getting estimates from commercial construction companies
Before hiring a commercial construction company near you, make sure to:
Choose companies with the highest reviews on HomeGuide and Google.
Ask to view a portfolio or pictures of past projects.
Get several estimates to compare. Confirm the estimates feature similar materials and timelines.
Choose licensed, bonded, and experienced construction companies.
Get a written, itemized estimate and contract before making payments.
Questions to ask commercial construction companies
When hiring builders, remember to ask these questions:
How long have you been in the commercial construction business?
Can you give me references from recent clients?
Will you hire all the necessary subcontractors, plumbers, and electricians?
How much input and feedback can I provide during the building process?
What are your current labor rates?
How long will the project take from start to finish?
Do you handle all the permitting and coordinate the inspections?
Can you get me any discounts on orders for bulk materials?
What delays and extra fees can I expect, if any?
Can you give me a written quote and contract?
Using our proprietary cost database, in-depth research, and collaboration with industry experts, we deliver accurate, up-to-date pricing and insights you can trust, every time.