The Cost of Construction for an Office Building – Bacon …

According to Reed Construction Data, the construction cost for a two story, 20,000 square foot office building is approximately $2,500,000 dollars. That figure includes all the costs associated with the construction process, including soft costs like permits and architecture. Depending on the location of the office building, the price per square foot can range anywhere from $150 to $215 all in.

But, not all office buildings come with the same price tag. Medical and Biotech buildings, for example, are the most expensive. According to Reed, the average construction cost for a medical office building is about $300 per square foot. It is not uncommon for the specialized tenant improvements to run about $70 a square foot.

Other property types cost much less. Industrial buildings and shell retail are at the low end followed closely by movie theaters and department stores. High Density Residential (HDR) and hotels are closer to the higher end, assuming high end finishes.

Reed reports that the year-to-year construction cost for an office building decreased by approximately five percent. I havent seen that happen in Sacramento (since we really havent seen any meaningful new construction.)

Bacon Commercial Real Estate keeps clients abreast with all facets of the commercial real estate landscape. Contact them for information on new projects in the Sacramento area and how to make a deal pencil these days. Given the market, it is going to be some time before any unsubsidized, speculative development comes on line.

Read this article:
The Cost of Construction for an Office Building - Bacon ...