By Derek Beverly, Director of Preconstruction · June 11, 2026
It's the first question every owner asks, and the honest answer is: it depends — but not on mystery. Commercial construction cost is driven by a handful of factors you can understand and plan for. Across more than $2 billion in delivered projects, we've learned that the owners who avoid nasty surprises are simply the ones who understood these drivers early.
The Six Things That Drive Your Number
- Building type. A warehouse shell and a hospital are worlds apart per square foot. Complexity, code requirements and systems drive the biggest swings.
- Size and height. Larger footprints lower cost per square foot; taller structures raise it through structural and systems demands.
- Site conditions. Poor soil, a sloped lot, demolition or utility work can add substantial cost before the building even starts.
- Finishes and systems. The gap between a basic and a high-end interior — HVAC, electrical, fit-out — is one of the largest line items you control.
- Location. Local labor rates, permitting and material logistics vary widely by market.
- The market itself. Material prices and trade availability move with demand, which is why timing and early procurement matter.
Why "Cost Per Square Foot" Can Mislead You
Rules of thumb are useful for a first gut check, but a single per-square-foot figure hides everything above. Two buildings of the same size can differ by 50% or more depending on use, finishes and site. A real number comes from a real estimate against your actual documents — not an average.
Where the Surprises Hide
In our experience the costliest surprises almost never come from the building itself — they come from what wasn't planned: undiscovered site conditions, change orders from incomplete drawings, and long-lead materials ordered too late. Every one of those is preventable in preconstruction, which is exactly why we invest so heavily in it before breaking ground.
Getting a Number You Can Trust
The most reliable path to a dependable budget is to bring a contractor in early, during design, so cost is engineered into the project rather than discovered at bid. That's the heart of our preconstruction and delivery approach — transparent budgeting with no surprise change orders.