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How to Lower Your Commercial Building Cost Per Square Foot

Houston, Texas cityscape

Commercial building projects tend to get costly. Many factors determine how expensive a construction project becomes. As you might guess, the average cost per square foot of a building depends on the type of building and where it’s located. Fortunately, there are a few ways a builder can try to lower the cost of their project. Let’s dive into the details.

What is the Average Commercial Building Cost Per Square Foot?

According to a 2021 market analysis from Cummings, the average commercial building cost varies considerably. Here are a few examples of the wide ranges seen across the United States:

U.S. Costs per Square Foot of Gross Floor Area 2021

  • Single-story offices range from around $135 to $448
  • Mid-rise offices range from around $216 to $892
  • High-rise offices range from around $345 to $1,026
  • Neighborhood strip centers range from around $240 to $461
  • Three-star hotels range from around $317 to $731
  • Five-star hotels range from around $456 to $1,044
  • Acute care medical facilities range from around $528 to $1,468

The cost per square foot not only varies by building type, but also by location. Cities such as San Francisco, California tend to fall on the higher end of the spectrum, and cities such as Durham, North Carolina often fall on the low end.

How to Lower Your Commercial Building Cost

modified shipping container design plans

First things first, you need to work with the right teams and you need to plan well. Working with a contractor and designer will help paint a clear picture of how much you’ll have to spend per square foot. Carefully planning each stage of your project will help you uncover overlooked costs or ways to save money. For the smoothest construction project possible, we recommend planning well in advance and getting—and keeping—everyone on the same page.

Consider the Additional Factors That Impact Building Cost:

  • Design

If your commercial building includes custom openings, unique ceilings, and eye-catching structural elements, it might get more expensive than a structure without these bells and whistles. It’s important to know what you’re getting into and how your building design can shape the cost of the project.

  • Materials

Building materials include elements such as wood and steel, but the list doesn’t stop there. The price tags of different building materials tend to vary significantly. If you want to create a structure made entirely out of a material that’s hard to come by, it’ll rack up the price. In some cases, you can determine which combination of materials will offer the best structural support at the best price for your budget.

Shipping containers and other prefabricated modular elements can often help builders lower costs. However, despite the many financial benefits when choosing a modular-style build, modular construction isn’t suitable for every construction project and should be researched.

modified shipping container with wood framing

  • Finishes & Building Quality

A five-star hotel is much different that a three-star hotel and the building quality and finishes reflect that. Nicer-looking structures often require more expensive materials. A building that can withstand weather elements will often take longer to plan for and build, driving up the cost. Gain a clear understanding of what type of building you want and prepare a way to pay for it.

  • Labor

Labor is a big factor in project cost. In some cases, labor is nearly half of the overall construction cost. If you need more skilled labor, you’ll need to pay for it. If you need to train your laborers, you’ll need to allocate money for that too. Consider how your project timeline and location play a role in labor wages as you build out your estimated project cost. It’s often recommended that builders overestimate the cost of labor to avoid budgeting issues.


If you want to lower your commercial building cost per square foot, consider the type of structure you’re building and where it’s located. Will these factors cost you a lot or are they on the more affordable side?

Then, consider what building materials and finishes you want to use and understand how they’ll impact your building cost. And of course, account for the cost of labor, all the way from early site prep to the finishing touches as the building nears completion. With all of this in mind, you’re on the right track to making the right financial choices before you begin building.

Falcon Structures is a shipping container modification manufacturing company working to build a better world by pioneering the use of container-based structures. Falcon modifies boxes to become storage unitsworkspacesbathrooms & locker roomsliving spacesindustrial enclosures, and multi-containers.

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