How To Estimate Your Commercial Renovation Cost

Average Cost of Commercial Renovations per Square Foot

Unfortunately, not all renovations are the same. This is especially true when renovating commercial spaces. The average cost per square foot can vary significantly, ranging from $40 to over $450!

To gain a preliminary understanding of your project’s costs, consider consulting a design-build construction firm like Dawn Construction. They can provide insights into the expected costs based on multiple factors related to your project scope. They would also be able to work with you to determine what features are the most important for your renovation, and then work around your budget. Finally, you should discuss with your contractor what type of payment terms contract would work best given your specific scenario. In sum cases, a fixed price may be the best option. In other cases, a cost-plus style contract may lead to the best outcome for all stakeholders.

Factors Influencing Commercial Renovation Costs

Materials and Labor Fluctuating inflation, and general supply and demand trends will impact material and labor costs. Even if you estimate these costs six months in advance, they may rise by the time your project commences. This has become a more critical concern in more recent years as construction prices have increased.

At Dawn, we suggest prioritizing quality in both materials and labor for a lasting commercial construction project. We also recommend you choose a contractor and designer that can suggest alternate materials and designs in order to get more value for your money. Sometimes, this is known as the value engineering process.
Building Use

The intended use of your building can affect costs due to specialized equipment and fixtures. Medical offices, government buildings, and high-rise offices generally incur higher costs compared to small restaurants or single-story office spaces, as they all have very particular needs.

Adaptive-reuse renovations, transforming a building’s original use significantly, can often result in the highest costs. Examples include converting a warehouse into a medical office or repurposing old mills into modern apartments. If you work with Dawn, we take the time to gain an understanding of what your true needs, wants, and priorities throughout the build.

Building Location

Urban, or more dense areas typically incur higher commercial renovation costs than rural areas. Location-specific factors such as proximity to the coast, regional climate, and nearby businesses can contribute to increased costs. At Dawn, we have found that major cities like Toronto, Vancouver, or Montreal generally have higher renovation costs than smaller, rural areas.

Neighborhoods within the same city can also impact costs. Downtown and “up-and-coming” areas sometimes have higher remodeling costs than less accessible neighborhoods.

Adding Building Amenities

Enhancements like additional kitchens, bathrooms, gyms, or eco-friendly features contribute to increased costs but elevate your space. This is why understanding your goals, and developing a budget prior to starting your renovation are important.

Updated Electrical Systems

Consider updating systems like air conditioning, heating, and plumbing fixtures for improved comfort and efficiency. While costs for HVAC installation can be around $4.50 CAD per square foot, involving contractors early in the design process will help manage expenses.

Building Permit Fees

Factor in permit fees, which depend on the project’s location and type of work. While not a major expense, permit fees can accumulate on large projects, especially in major cities.
Embarking on a commercial renovation requires a specialized partner. Dawn Construction specializes in transforming commercial spaces, from offices to medical facilities. For guidance on the commercial renovation process and cost estimates, reach out to our experienced team. Your dream space is within reach.