When I first meet with clients and start to discuss the ideas they have for the design of their commercial tenant improvement project, it of course does not take more than just a few minutes before the questions about the cost of construction start to come out. The first thing to keep in mind is that every client is on a budget, some kind of budget. And most people, regardless of their budget, want to know how they can get the most for their money.  This article roughly covers commercial tenant improvement projects in existing or newly constructed buildings and does not include remodeling or renovation of the shell  or structure of the existing building.

Allow for Contingencies-

So, I will start by saying, though I have seen that most people will pay it no mind- When you figure the rough cost of construction from a preliminary design, add at least 10-15% to cover things you haven’t thought of and/or the inevitable upgrades you will make during the course of construction. Once you are hip-deep in the project it is, I have seen time and time again, just human nature to think, "Well, we’re only doing this once, let’s go ahead and splurge on the__________." Insert you favorite expensive finish materials, fancy designer furniture/seating, custom fixtures with your company logo, etc. here. If you then have a figure you think you can’t afford, scale back the scope of the project and refigure the cost until you get something you are comfortable with. Okay, I did my duty on that, though I know you will likely forget all about it.

Estimates Only as Good as the Plans-

Any means of figuring the cost to construct a project is only as good as the level of detail in your plans. Obviously you want to have some idea of costs before you get too carried away with your design, but just keep in mind that the less detail you have in your plan, the less accurate your estimate may be. So it is best to move back and forth between the design and cost figures as you move into more and more detail in your plans. So at first, you will only be able to obtain a very rough guess.

First of all, about the only way to get a rough cost when you only have a very basic design with some preliminary drawings, is to multiply the floor area of the project in square feet and multiply it by a given cost-per-square-foot figure. Currently, I would use a multiplier of somewhere between $75 to $200 per square foot. Quite a big range, I know, but that is just to get us started, and many high-end projects will run $300 per square foot and up as well. There are ways in which you can narrow that range down a bit as you move along through your design process.  Keep in mind too, that for any kind of food service project, these figures do not include allowances for kitchen, bar, etc. or other specialized equipment.  The retail pricing for these items can generally be found pretty easily online already.

Narrowing Things Down-

So, to start narrowing down that $75-$300 multiplier, you can think of it like this-