Commercial Construction Cost Per Square Foot: 2026 Benchmarks
A practical 2026 breakdown of commercial construction cost per square foot by project type — office, retail, restaurant, medical, and warehouse — plus the variables that move your number up or down.
Owners and developers ask the same opening question on every new commercial project: what is this going to cost per square foot? It is the right question — and the wrong one to answer with a single number. Cost per square foot (PSF) is a moving target driven by project type, market, finish level, site conditions, MEP complexity, and how the work is delivered.
This guide gives you defensible 2026 benchmarks for the most common commercial construction project types in the Western U.S., plus the variables that pull your number up or down. Use these ranges for early feasibility, lender conversations, and go/no-go decisions — and replace them with a real GMP after preconstruction.
2026 Commercial Construction PSF Benchmarks (Western U.S.)
| Project type | Typical PSF (2026) | Notes |
|---|---|---|
| Class A office (ground-up) | $325 – $500 | Mid-rise, structured parking add-on |
| Office tenant improvement (TI) | $90 – $225 | Open plan vs. private offices drives upper end |
| Retail buildout (vanilla shell → finish) | $150 – $325 | Brand fixtures often owner-supplied |
| Restaurant (QSR / fast-casual) | $300 – $650 | Kitchen MEP is the single largest swing |
| Restaurant (full-service) | $400 – $850 | Hood, refrigeration, FF&E pricing |
| Medical office build-out | $250 – $550 | Imaging, plumbing, and lead shielding push high end |
| Ambulatory surgery center | $500 – $850 | OSHPD 3 / state hospital review impact |
| Warehouse / light industrial | $90 – $185 | Clear height and dock packages matter most |
| Multi-tenant retail (shell only) | $185 – $275 | TI allowances negotiated separately |
These are all-in construction costs — GC fee, general conditions, insurance, bonds, and subcontractor scope — excluding land, soft costs (design, permits, FF&E, brand fixtures), and tenant-owned equipment.
What Actually Moves the Number
PSF is a symptom. Eight variables drive 80% of the variance:
- Site conditions. Existing buildings with grandfathered MEP can save 30%. A previously occupied restaurant space being converted to medical office often loses that savings entirely.
- Code triggers. Jurisdictional thresholds — change of use, alterations exceeding a percentage of building value, accessibility upgrades — can push a "simple TI" into a structural and MEP retrofit.
- MEP complexity. Restaurants, healthcare, and labs are MEP-driven. The shell is a small fraction of the cost.
- Finish level. A vanilla white-box retail TI and a flagship brand prototype can have a 3× cost delta on the same footprint.
- Schedule compression. Overtime, off-shift, and stacked trades add 8–18% on accelerated programs.
- Delivery model. Design-bid-build, CM-at-risk, design-build, and progressive GMP allocate risk differently — and price differently.
- Market conditions. Subcontractor backlog, materials volatility (steel, switchgear), and labor availability in your AHJ.
- Owner decisions. Late scope changes, brand fixture lead times, and owner-supplied equipment coordination are the most common sources of overrun.
Why a Range Beats a Single Number
A construction professional quoting a single PSF in early feasibility is either guessing or pricing themselves out of the conversation. The honest answer is a defensible range based on comparable projects in the same market, followed by a structured preconstruction process that narrows the range to a Guaranteed Maximum Price (GMP) before mobilization.
A good preconstruction workflow:
- Concept estimating off SD-level documents → ±20% range
- Design Development pricing with subcontractor input → ±10% range
- GMP at 95% CDs → committed number with contingency strategy
How Design-Build Delivery Changes Cost Certainty
Design-build delivery shortens the path from concept to a committed price because one team holds both the design and construction contracts. Coordination gaps between architect and GC — historically the largest source of mid-project change orders — collapse into a single accountable team. For most owners, design-build delivers a tighter GMP with fewer surprises than design-bid-build, especially on healthcare, restaurant, and tenant-improvement work where MEP coordination drives the number.
Read more: What is design-build construction? · What does a commercial general contractor do?
How to Use These Benchmarks
- Feasibility: Use the range to test whether your pro forma works at all.
- Lender / investor conversations: Combine PSF range × area + 15% soft costs + 5–10% owner contingency.
- Site selection: Compare two sites by running both through a preliminary PSF range — not by chasing the cheaper-looking lease.
- Vendor selection: Any contractor giving you a single hard PSF before seeing the site or program is selling you a number, not an estimate.
Get a Project-Specific Number
We provide preconstruction estimates against your actual program and site — not your zip code. Request a feasibility review and we will return a defensible PSF range within five business days, with the assumptions and exclusions documented.
— Frans Construction. Commercial construction across California, Arizona, Nevada, Oregon, Washington, Utah, Colorado, and Idaho.