Commercial Renovation Cost Estimation Per Square Foot

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Want to draft an estimate for a commercial renovation project but not sure how?

Don’t worry, you are not alone.

Most contractors hire cost estimators to ensure they run a profitable business which is why the U.S. Bureau of Labor Statistics reports that there are 17,800 openings for cost estimators each year on average.

So if you need to determine the commercial renovation costs for your next project without hiring a professional estimator, you are in the right place. While there’s no simple formula for how much commercial renovations cost, we’ll discuss the factors that influence commercial renovation costs and share some general contractor estimation tips.

The Average Commercial Construction Costs Per Square Foot

Construction is a vast industry with lots of job opportunities in the civil engineering, general contractor, and specialty trade construction space. Many commercial construction projects come with a high price tag, so it’s important to have a clear estimate of the cost implications before getting started.

The more accurately you can estimate the construction cost of remodeling projects, the better you will be able to negotiate and control the budget.

Commercial renovation cost per square foot range from $30 to $450 depending on the building type and location. However, the average costs of a commercial building renovation project may rise from $70 to over $1,000 per square foot with additional finishing depending on the building type and location.

So before you dive into any remodeling project, it’s a good idea to begin with the breakdown of costs per square foot. Here are some of the factors that influence the costs of commercial renovation projects.

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Factors Affecting Renovation Cost

estimation renovation: factors affecting commercial renovation cost

Renovation projects are of varying degrees and here are some of the factors that affect commercial renovation costs.

  1. Building Quality

    Commercial buildings are classified into three main categories according to the factors that determine their renovation cost:

    • Class A:

      These are the high-rise buildings with top-notch fittings mostly situated in the most expensive parts of town.

    • Class B:

      They are fully-functional commercial buildings without the high-end fixtures of class A often located just outside the central business district.

    • Class C:

      These commercial buildings are usually bought as investment properties by investors looking to bump them up to the Class B status or sold to tenants looking for a functional space on a budget.

    Pro Tip

    The quality class of a building can give you a rough idea of how much any commercial renovation project will cost.

  2. Location

    The cost of any commercial renovation project would unsurprisingly vary as regards the site location. Due to the fact that labor costs, land prices, and building code regulations vary across cities, remodeling costs are usually higher in rural cities as compared to mega or metropolitan cities.

    The weather conditions also influence the cost of any remodeling project as most renovation contractors charge higher to work in adverse weather conditions such as storms, floods, or heatwaves.

    Pro Tip

    It’s easier to produce a realistic cost estimate when you perform a complete site assessment to ascertain site conditions.

  3. Size

    Larger renovations typically take longer to complete and most contractors charge based on the size and complexity of renovations required. But in general, the larger the area to be renovated, the more expensive the entire project will be overall. But considering the economics of scale, the larger the area, the lesser you would pay on a per square foot basis. You can also expect to get a discount on supplies ordered in bulk.

  4. Pro Tip

    To accurately estimate the cost of any commercial renovation project, establish the exact scope of the project and size per square foot based on the blueprint, design drawing, or plan.

  5. Building Type

    The renovation costs of commercial buildings also vary by their intended use. Renovating a medical storage facility will cost more than the storage facility in an office. Here’s a table of the estimated cost range for various commercial building renovation projects below.

    Building Type Cost per square foot
    Multi-story building $450 – $1000
    Single-story building $290 – $435
    Hospital or medical office $400 – $1000
    Government office space $425 – $840
    School and educational space $295 – $756
    Public space (Gymnasium, police stations, art center $403 – $892
    Warehouse or factory $214 – $635
  6. Building Codes

    Commercial renovation costs also depend on which building codes apply to your renovation project. Ensuring compliance with the environmental, energy, and safety building costs significantly run up the cost. While renovating buildings in historic districts doesn’t necessarily cost more, complying with all regulatory requirements requires a lot of resources and might restrict your material and structural alternatives.

    Additionally, as building codes constantly evolve due to weather or climate factors, the cost and extent of renovation required to meet current applicable codes will also be affected.

  7. Pro Tip

    To create accurate estimates, you must be knowledgeable of the building codes applicable to the state and city of your renovation or remodeling project.

  8. Renovation Material

    The cost of building materials and labor tends to be unstable which is why it’s critical to ascertain the current market prices to get an accurate remodeling cost. If the project requires major renovations such as structural and foundation work, interior remodeling, exterior remodeling, and installing an energy efficient roof, expect the renovation budget to rise significantly.

    The quality of the materials required also determines the overall project cost. For major improvements requiring high-end renovations like changing floors, choosing between engineered hardwood, solid hardwood, and locking hardwood floors would ultimately boil down to your client’s budget.

  9. Pro Tip

    Determining the suitable material for your remodeling projects helps in saving costs and prevents unpleasant surprises.

  10. Permits

    While a home renovation may not require a building permit, almost all renovations, additions, or tenant improvements on commercial buildings (including plumbing, new framing, as well as mechanical or electrical works) require a building permit. It can occasionally be expensive to obtain regulatory body approvals so it’s vital to consider permit costs when estimating the cost of any commercial renovation project.

  11. Market Conditions

    The cost of building materials may vary on a daily or weekly basis. You should be able to get a bargain on labor and building material costs during the fall as compared to the spring or summer since there are fewer home renovation projects.

How to Control Commercial Renovation Cost

how to control commercial renovation cost: renovation cost per square foot

The entire point of cost estimation is to maintain control throughout the project implementation. And while many external factors could still affect the cost of any renovation, here are a few ways to control the cost of any commercial renovation project and avoid falling on the high end of the cost spectrum.

  • Plan for the Unexpected

    When estimating the total cost, plan for the unexpected obstacles you might face during the course of the project. These could include the fluctuation of current market prices like the labor costs or building materials. Failing to plan ahead for these eventualities may grind the entire project to a halt. It’s a good practice to budget an additional 5% – 15% of the total renovation cost to cover any hidden costs.

  • Gather Accurate Project Requirements

    It is critical to gather as much information as possible on the project to accurately estimate the cost per square foot of any commercial remodeling project. You also need to anticipate and consider the costs of slight variations to the plan if there are any challenges or preference changes to the earlier plan.

  • Source the Right Materials

    Using the right materials in terms of durability and impermeability could save you a lot of money down the line in building lifecycle costs. Most times, a cheaper alternative may need to be replaced altogether due to wear and tear and you’ll end up spending much more than you planned to avoid.

  • Utilize As-Built Drawings

    Study as-built drawings when available for vital insights into the planning and estimating process. As-built drawings offer a clearer picture of the initial construction design which makes it easier to plan your renovation activities.

  • Invest in Estimating Software

    Ensuring you have the invest in the best estimating software helps you save time in creating and editing invoices and estimates. An estimating software will also help you respond to customer requests in a timely manner which can help you win more bids.

  • Examples of Common Commercial Remodeling Projects

  • Installing Energy-Saving Fixtures and Appliances

    Green appliances help preserve the environment and could save property owners or renters a lot of money. Switching from asphalt shingles to a metal roof and installing new windows like the double-pane low-E windows help save money on utilities.

  • Corporate Kitchen Remodeling

    A kitchen renovation is needed as kitchen fixtures and appliances get older. Installing energy-efficient kitchen appliances and fixing new kitchen cabinets will make kitchens more attractive and functional.

  • Remodeling Restaurant Dining Space

    Most restaurants keep things fresh by regularly remodeling and renovating their dining spaces as they tend to look worn out over time. Restaurant owners also occasionally add a fresh coat of paint to the outdoor and waiting area or hire a landscaper to boost the curb appeal.

  • Office Restrooms/Bathroom

    Many businesses are upgrading and modernizing their restrooms and opting for smart and touchless fixtures. Installing these new fixtures helps curb the spread of infections and helps to save water.

  • Frequently Asked Questions
    1. How to calculate total square feet?

      To calculate the total square feet, measure the length and breadth of the area in feet. Multiply the length and width and you have the total square feet. For example, if you have to remodel a vinyl tile floor measuring 15 feet in length and 10 feet in width, the total square feet area = 15 feet x 10 feet = 150 square feet.

    2. How much does an office renovation cost?

      Renovating office buildings depends on a lot of factors including material prices, square foot area, the complexity of the design, and labor costs. On average, it costs around $350 per square foot to renovate an office building.

    3. How much does it cost to install a commercial bathroom?
      The average cost for installing a commercial bathroom ranges from $12,500 to $15,000. However, a complete bathroom remodel may be as high as $30,000 and beyond if the area is far from water supply and sewage lines.

    4. Which software is used for preparing estimates?
      Most contractors love the simplicity and efficiency of InvoiceOwl in sending professional invoices and estimates to clients. It’s the perfect way for contractors, small businesses, and freelancers to send and track invoices and estimates.

    5. Should I opt for an estimate template or software?
      If you estimate less frequently, an estimate template should be sufficient. But if you are a professional contractor, you need to estimate quite frequently. In this case, you should opt for a professional estimating software like InvoiceOwl.

    6. How much does it cost to install a new roof in a commercial building?
      The type of roof, access to the roof, wind loads, and building code requirements are some of the factors that determine the total cost of reroofing a commercial building. On average, it costs $13 per square foot for built-up bituminous flat roof replacement, $9 per square foot for barrel tile roof replacement, and $12 per square foot for metal roof replacement.

    7. How much does it cost to refinish hardwood flooring in a commercial building?
      The average cost to refinish hardwood floors is $7 per square foot. Refinishing floors restores their luster on a budget. Hardwood flooring is increasingly popular in commercial buildings primarily for its ease of installation and lower maintenance costs.


    Giving older buildings a new face is not as simple as it might sound. Estimating is a lot harder than it seems and contractors need to consider a lot of variables to draw up an accurate estimate.

    If you feel like estimating takes a lot of your time and you’d like a faster and more accurate approach, try one of the easiest estimating apps on the market—InvoiceOwl. With InvoiceOwl, you can create professional estimates within minutes and include miscellaneous expenses to cover unexpected scenarios. InvoiceOwl is one of the best estimation renovation tools for small businesses with easily customizable templates and an intuitive user interface.

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Author Bio
Jeel Patel
Jeel Patel

Jeel Patel is the founder of InvoiceOwl, a top-rated estimating and invoicing software that simplifies the invoicing and estimating processes for contractor businesses. Jeel holds a degree in Business Administration and Management from the University of Toronto, which has provided him with a strong foundation in business principles and practices. With understanding of the challenges faced by contractors, he conducted extensive research and developed a tool to streamline the invoicing and estimating processes for contractors. Read More

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