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4 Factors That Affect the Construction Costs of a New Commercial Building

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4 Factors That Affect the Construction Costs of a New Commercial Building

Various factors influence the cost of a new commercial building. Some are more obvious like land acquisition, permits and construction. Then, there are lifecycle costs to consider like utilities, maintenance and replacements. Often, clients are unaware what the actual cost of their building should be so it’s only natural to question, "How much will the project cost?

Having knowledge of these factors ensures you won’t be in for a surprise when you’re handed an initial estimate of probable cost. In today’s blog, we’ll discuss the four most common factors that’ll influence the cost of your new commercial building.

(Free guide: 30 Questions to Answer Before Starting an Architectural Project)


  1. Project Complexity

Project complexity is perhaps the biggest factor to consider in regards to cost. Project complexity is directly related to the integration of systems in the building detailing and coordination an architect has to spend designing and administering a project. This is why small dental offices can be expensive while large warehouses are cheap. Architectural projects are typically broken down into five complexity levels:

  • Least Complex: includes industrial buildings without special features, parking or loft structures, warehouse and utility buildings.
  • Simple: includes armories, apartments, cold storage facilities, hangers and manufacturing plants.
  • Intermediate: includes collegiate buildings, convention halls, detention facilities, extended care, gymnasiums, laboratories and medical offices.
  • Complex: includes aquariums, auditoriums, art galleries, communications buildings and theaters.
  • Most Complicated: includes custom residences, decorative buildings and custom designed furnishings.


  1. Nature of the Site

Another factor that impacts the construction costs of a new commercial building is the existing conditions of the site. The location of the project will influence its cost as high-value sites often attract high-value developments. Local developments also constrain what can be built on certain sites. In most cases, urban locations will be more expensive because of higher wages and living costs.


Physical site conditions also play a role in construction costs. Natural site features, ground conditions and obstructions as well as existing and adjoining buildings can produce problems. And thus, require more complicated design solutions to accommodate. For example, a heavily sloped site may require extensive cut-and-fill operations or the similar.


Climate also affects property value as well as it serves for forecasting possible maintenance. This often pertains to elevated sites where there’s high wind or sites that are historically prone to flooding. Other conditions like conflicting utilities, overhead lines, groundwater and buried storage tanks may also influence the cost of a new commercial building


  1. Sustainability

A sustainable building doesn’t just have a positive effect on the environment, but can be beneficial to the people working in the building as well. It also plays a part in lowering lifecycle costs like energy usage and maintenance. Initial versus whole-life costs can greatly influence an architect’s design decisions.


It’s not just the methods and materials used to construct the commercial building that affects the environment, but how it’s built to operate as well. A large portion of this is due to the amount of electricity a buildings consumes as well as its outlets, lighting, heating and cooling systems.


When designing, architects charrette pre-design or programming sessions to determine if long-term savings will arise as an effect of incorporating more expensive (but sustainable) alternatives. Some of these questions include:

  • How flexible is the client’s budget to finance more robust or better quality materials and finishes?
  • Who will occupy the building? (Those developing in order to sell it may be less concerned with operating and maintenance costs.)
  • What is the lifespan of the building? (The shorter the lifespan, the less appropriate it is to invest in more durable materials.)


  1. The Choice of Architect

Seasoned design professionals will follow design processes, ensuring everything is done properly. While a more experienced professional may be more expensive upfront, it’s always worth it when it comes to lifecycle costs and return on investment.


In Summary

The factors discussed in this article are just a few of many that will affect the overall cost of your new building. To ensure your property lasts a long time, we encourage you to invest in quality materials as well as an experienced architect. To learn more about construction costs or to schedule a feasibility study with our team, we invite you to reach out to us at (866) 226-8071.


Need Help Getting Started?

In this free guide, we uncover the questions that form the framework of your project. What are your needs? What are the potential setbacks? We help you clarify your vision and how you plan to utilize your architectural development. Click below to download your free copy of the checklist now.

30 Questions You Need To Answer Before Starting an Architectural Project

Topics: Architectural Design, Commercial Projects


Prime Architects

Written by Prime Architects

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