How much does a commercial build-out cost?

What you start with

A first-generation shell has no ceiling, no finished floor, no distribution of power, HVAC or sprinklers to the layout, and often no restrooms. Everything has to be built. A second-generation space has all of that from the last tenant, and the question becomes how much of it survives your layout.

Demolition is its own cost. Removing a previous tenant's partitions, ceilings, millwork and flooring, and disposing of it from an upper floor through a shared freight elevator, takes real time before anything new goes in.

How much the layout changes

Partitions, doors and ceilings are counted, not guessed. An open office with four rooms and a plan with fourteen private offices and two conference rooms are not the same project at the same square footage, because every wall carries framing, drywall, finish, a door and hardware, and the power, data, lighting, sprinkler heads and supply air that have to move to serve the new room.

Rated assemblies add to it. Demising walls, corridors and rooms that need a fire rating or a sound rating take specific board, specific details and inspection.

Mechanical, electrical and plumbing

Moving walls means moving what is in and above them. Sprinkler heads have to be relocated to cover the new rooms, ductwork and diffusers reworked, lighting circuits and data rerouted. A restaurant or a medical suite adds plumbing, grease or medical gas, and heavier electrical service.

This coordination is usually the largest variable in a build-out and the one most often left out of a rough number. Our proposal states what is included and what is carried by the building or by another trade.

Finish level and the building you are in

Painted drywall, acoustic ceiling tile and carpet tile is one finish level. Level 5 drywall, hard-lid ceilings, glass office fronts, millwork and LVT is another. Both are legitimate. They are not the same price.

Building rules move the cost too. Occupied buildings restrict noisy work to nights and weekends, limit freight elevator hours and require protection of common areas. After-hours work is slower and costs more per hour, and a proposal that does not mention the building's rules has not priced them.

The allowance is a lease term, not the budget

A tenant improvement allowance is what the landlord contributes, often per square foot, and it rarely covers the whole fit-out. What it excludes, usually furniture, cabling, signage and anything the next tenant would not inherit, is written into the lease. The gap between the allowance and the real number lands on the tenant, so read that list before pricing the design.

How to read a build-out proposal

It should name the drawings and revision it was priced from, list the inclusions by trade, state the exclusions plainly, identify long-lead items that affect the schedule, say which permits and inspections are included, and set out the schedule including any after-hours phases.

Send the drawings, the scope or a walkthrough date through the estimate form. You get a written proposal with inclusions, exclusions and a schedule before any work starts.