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When it comes to planning and executing a commercial build out project, it’s important that your plans are well thought out and will help to achieve your business’s needs. A successful build out can result in a high-quality workplace for you and your employees, while one that is miscalculated can cause you to go over budget or to agree to a commercial space that doesn’t suit your company.
As you’re making plans for a commercial build out, there are several key factors to keep in mind. Since every build out project is unique, variables like your building’s location, square footage, and scope of work can impact your project’s overall cost. Understanding these factors and how they will affect the cost of your project can help you to plan ahead, set a realistic budget, and negotiate an adequate tenant improvement allowance into your lease.
There are typically two types of build outs, and each has its own benefits and drawbacks for tenants. Turn-key build out projects mean that an office space is completely finished by the building owner or property manager; the tenant simply picks up the key and opens the door to find their finished work space. These build outs might include walls, electrical wiring, flooring, colors, and other design elements chosen by the tenant. While these projects tend to be completed with the tenant’s interests and desires in mind, the landlord may be tempted to cut costs in order to save money.
A tenant improvement build out is one in which the tenant controls the project and pays for it themselves, typically with an allowance for the project from the landlord. In this case, tenants can choose the best contractors, materials, and design elements themselves. This is typically settled upon during lease negotiation, so it’s important for tenants to have an accurate budget in mind early on.
As you’re calculating the overall cost to build out a commercial space, remember that there’s more involved than just labor and materials; both hard and soft costs should be taken into consideration. Hard costs refer to any physical improvements that you’ll need to make in your building, including doors and windows, paint, plumbing, HVAC systems, and more. These improvements will remain even after the current tenant is gone, and they are typically the largest expense in a commercial build out project.
Soft costs refer to any non-physical changes that need to be made with the building. This includes building permits, inspection costs, and any legal fees. Since these rates are often standard, it’s easier to calculate the soft costs of a build out project.
Your commercial construction project can vary widely in cost depending on several factors. Keep the following things in mind as you start to calculate the cost of your build out project:
The tenant’s intended purpose for a space will impact your overall construction costs. An office space will have different needs than a retail space, medical practice, or education center. Additionally, someone who wants a high-end finish with specific design tastes will likely need to spend more money to complete their project.
If the building is a first-generation space—meaning it hasn’t been built out before—it will likely require more build out work than a property that has been occupied by a previous tenant. However, an old building that hasn’t been updated in a while may need more upgrades.
The physical location of your building can be one of the biggest factors in your commercial build out’s overall costs. A build out in New York City, for example, will cost more than one in Des Moines. Additionally, a bigger building will be more expensive to build out than a smaller space, as you’ll need more materials and labor to complete the project. Learn more about how your building can impact overall commercial build out costs.
Another big factor in calculating your commercial construction costs will be your personal tastes and preferences. A low-end build out will give you a basic office space without any added features, but if you want a space with high-quality finishes, unique details, or special features like a kitchen or a gym, you’ll need a lot more in your budget.
When looking for a contractor to complete your commercial build out project, it’s important to work with someone who has the skills and proven experience to make your vision a reality. At Premier Construction, we work with our clients to understand their business and goals, allowing us to create a thorough plan that works within your needs and budget. Contact us today to get a free quote for your commercial build out project.