US Building Commercial Construction Cost per Square Foot

Although it can be a profitable enterprise, commercial construction is not for the timid. Businesses operating in the commercial sector must have ample cash on hand or quick access to a sizable credit line. Due to the infamously delayed payments and cash-hungry nature of commercial development, contractors must pay close attention to their construction cost per square foot.

Contractors can replenish their cash reserves with a sizable return when the project is over by keeping these costs under control with accurate forecasting and maintaining an eye on the budget.

From one commercial project to another, the price per square foot can differ significantly. This is particularly true when you contrast the prices of commercial projects in various regions of the country and the different kinds of commercial properties.

Types Of Commercial Construction

There are several different building types used in commercial development. Almost any project that isn't exclusively residential can be classified as commercial construction.

Office buildings, shopping centers, colleges and universities, sports stadiums, hotels, entertainment venues, and parking structures are a few typical examples of commercial projects.

Even apartment complexes, which contain many residential units, are regarded as commercial ventures. The majority of states classify residential projects as single-family or multi-family buildings with three or four units or fewer. Structures outside of that range are typically regarded by states as commercial building projects.

Cost-influencing Factors In Commercial Building

When calculating the cost of a commercial project, many variables are involved. You must realize that the cost per square foot might vary greatly depending on the locations, materials, and labor used. The cost of the overall construction will surely depend on the types of buildings and finishes used.


Simply said, it costs more money to build in some areas of the country. For example, building costs will be higher in a popular location of a densely populated city than they would be elsewhere. A project in New York City can cost more than twice as much as one in a tiny town in the Midwest. While labor costs play a role in part of this, there are also other factors at play, such as the local climate and precedents set by earlier structures built nearby.

Building Type

The cost per square foot is certainly influenced by the type of building you're creating. For instance, a simple one-story warehouse will be far less expensive per square foot than a high-rise complex. The engineering and planning expenses, site preparation, permits and inspection fees, and logistical expenses for the high-rise will all be significantly greater, which will affect the cost per square foot.

It will also require certain structural requirements.


The designer's chosen materials have a significant impact on how much it costs to construct a building. Construction costs won't be low for a steel-framed building that requires considerable construction. Additionally, the cost per square foot can increase quickly with custom windows and doors.


You're missing a critical piece of the jigsaw if you haven't thought about the expense of the finishes. The price difference between three-star and five-star hotels, which is consistent $200 or more per square foot, serves as the ideal illustration. Comparing high-end finishes to builder-grade or mid-grade alternatives will significantly increase the cost per square foot.


Labor is one of the most important elements that affect how much a building costs per square foot. The expense per square foot will be much greater in locations where unions are popular than it would be in areas where they are not.

Workers will expect to be paid well in boom areas, or they will choose another job with a contractor who would pay them more.

Bottom Line

Numerous elements, including location, labor, and materials, significantly impact a commercial building. You could avoid putting the contractor under a lot of stress during construction if you calculated your costs wisely. The cost of building nowadays demonstrates a rising tendency in the sector.