Cost Estimation Principles and Construction Management
Posted September 7th, 2021
Cost Estimation Principles and Construction Management
An average commercial steel building costs between $16 and $20 per square foot. That includes building package elements such as I-beams, purlins, and girts, along with delivery and foundation expenses and the cost of construction. But many retail and commercial buildings require additional finishing, like insulation or façade customization, which can increase the total cost of construction to as much as $30 or $40 per square foot.
Costs often arise over the entire life cycle of a project, which means estimation is often easier said than done. Each project presents risks, and those risks frequently translate to unexpected costs. Good cost estimation can mean the difference between a successful plan and a failed one.
Estimating Commercial Build Costs
While it is impossible to predict construction expenses for building projects down to the penny, assessing the following factors allows a general contractor to generate reasonably accurate cost assessments:
- Establish building quality class (Class A, Class
- B or Class C)
- Calculate the square footage of the first floor
- Multiply this figure by per sq ft cost estimates (includes: class, size, materials, labor, and shipping)
- Add total mechanical and electric fixture costs
- Repeat the square foot cost calculation process for each additional floor
- Include elements like equipment bays, service garages, or staffed fire stations in the final cost
Quality Class and Size Considerations
Quality, class, and size are the most critical variables in determining commercial buildings’ construction costs per square foot. Naturally, more extensive building projects, especially urban high rises, will have higher construction costs than smaller ones. Likewise, included amenities and exterior aesthetics influence costs, with Class A buildings featuring top-tier finishes and fixtures demanding higher construction costs per square foot than Class C buildings.
"Good cost estimation can mean the difference between a successful plan and a failed one."
Other Cost Drivers
Other cost drivers that figure into construction costs per square foot include labor costs, the project’s location, architectural design, and building materials. Projects featuring more ornate architectural design, and those located in areas with higher costs, such as New York City, will have higher costs per square foot than projects in outlying areas. Likewise, labor costs are often 2% to 6% lower for projects outside major metropolitan areas. Materials costs drive square footage estimates, and taxes and shipping charges also add to the overall cost.
Other Cost Drivers
Wallace Construction Group has over 100 years of combined construction experience on our team, with more than 200 total construction projects and more than 50 AHCA certified construction projects. Contact us to discuss how our cost estimation services help you plan and execute your next construction project.
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