Building a single-story commercial office building will cost an average of $238–$286 per square foot. A mid-rise building costs $569 on the high end and $474 on the low end to construct. Building a high-rise will cost between $545–$654 per square foot. The quality and size of a commercial construction project are the most critical variables in determining construction costs for commercial buildings. Other cost drivers include the location of the project, architectural design, and building materials. There are things commercial property owners can do to reduce their commercial construction cost.
Know Your Cost Drivers
A cost driver is a factor that creates or drives the cost of the activity. It is the root cause of why a particular cost occurred. Activities consume resources while customers, products, and channels of production consume activities. Most construction projects are influenced by location, building site, building design and types of material used. Changing the cost driver can dramatically influence the cost to build a commercial building.
- Location– Real-estate prices can fluctuate quite a bit from one location to another. The location is often one of the first choices of a commercial property owner. If a market is closer to where the goods originate, the pricing may be lower than in a faraway market, where the expense to transport the goods is higher. Prices may be lower if the goods compete in a crowded market where consumers have a number of other quality options. Presence of natural beauty and natural resources will increase the price. To save money, shop around and work with a knowledgeable real estate agent while searching for a reasonable cost location.
- Condition of the building site – Relatively flat terrain generally allows for easier access and constructability, whereas positioning a building on a steep slope may pose accessibility challenges and require additional engineering, materials, foundation work, and more. The condition of the building site has a big influence on the cost of the commercial project.
- Design of the building -The complexity of your building design will for sure affect your building cost. It is much cheaper to build a building with fewer corners than one that is full of ins and outs and a more complicated floor plan. More material will be used for extra corners and of course more labor hours. The aesthetic preferences of the property owner and the decisions made by the architect will influence the cost. A change in the building design can be a large factor in the budgetary requirement of the property owner.
- Find materials and supplies that require less specialized trades – Labor shortages, especially for skilled workers, are still very widespread right now. Because of these shortages, builders are having to pay higher wages and accept high subcontractor bids, leading to higher labor costs and overall budget. The National Association of Home Builders reports that today’s builders often employ 20 or more subcontractors, resulting in 75 percent of the total construction cost. An example, what if you could decrease your number of trades necessary, thereby decreasing the number of subcontractors? Using efficient materials like ICF walls would help lower cost, as well.
- Project Deadline The best way to control this cost driver is to plan ahead and avoid situations that would require contractors to work day and night to meet a deadline.
How To Keep a Construction Project On Schedule
- Review plans, specs, and project documents. To keep your construction project on schedule, you need to go over every detail of the scope of work.
- Create and coordinate a master schedule.
- Create contingency plans.
- Communicate and collaborate.
- Monitor and document progress.
Should You Value An Engineer?
Value engineering can be defined as an organized effort directed at analyzing designed building features, systems, equipment, and material selections for the purpose of achieving essential functions at the lowest life cycle cost consistent with required performance, quality, reliability, and safety. Since the dawn of the coronavirus pandemic, the construction industry has experienced more uncertainty and frenzied market movements than ever before. Tried-and-true materials are scarce, and prices are surging like never before, sending budgets through the roof. But there’s still work to be done, so estimators, architects, contractors, and other preconstruction pros must find alternative solutions. The value engineering team brainstorms to generate potential design solutions to reach the project functions. It’s smart to focus on the big-ticket items because they have the most opportunity to deliver value. At this stage of the game, no viable options are eliminated, even those with serious flaws. Next, designers and their teammates will eliminate the weak plays to present only their strongest options on game day.
Accurate Estimates Are Key
Inaccurate estimates is one of the biggest mistakes a project manager can make when creating a construction budget. This can be made more problematic by not having a definitive project schedule in place before doing a budgeting forecast. Getting an accurate estimate requires careful planning and this planning may require some investment on the part of the property owner. Spending time with the professional can prevent budget problems later in the project.
How to Find the Right Commercial Builder For Your Project
It is essential to take a look at their past experience. What kind of work experience does the builder have? Have they successfully completed similar projects? The screening process includes asking the builder for a written summary of their history, along with a list of customer and subcontractor references from past projects. Relying on word-of-mouth information is a great place to begin.
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Complete Structural Partners (CSP) provides commercial and residential contracting, renovation, and remodeling services to the Greater Cincinnati/Northern Kentucky area. We specialize in retail, office, healthcare, warehouse, and manufacturing construction projects. CSP provides quality craftsmanship that is completed on time and under budget. Our Interior Design Division provides decorating, staging, and space planning services as well as construction services for small remodeling projects.