When it comes to estimating commercial renovation costs, there’s no specific formula that caters to all types of projects. Each renovation project will have slightly different parameters. Such parameters may include the client’s budget and their specific designs. Many contractors opt to hire cost estimators for such things. Others, like Lion Group Construction, prefer to sit down with the client to discuss the renovation project in great detail. This helps to clarify a lot of things as far as commercial renovation costs go.
When it comes to commercial renovation projects, details matter. While estimates can never be 100% accurate, they can be as close to the expected costs as possible. A good understanding of the variables involved is key. Such an understanding, coupled with the client’s unique needs and budget, will help to bring the estimate as close to accuracy as possible.
Calculating commercial renovation costs involves analyzing the variables involved. These include:
For most properties, the square footage is the unit for determining project costs, including renovation costs. The bigger the area of a commercial building to be renovated, the higher the cost. For example, it costs about $20 to renovate one square footage of a commercial property. This cost usually covers the bare minimum, like repainting the walls. For additional services like insulation, the cost could go as high as $40 per square foot.
2) Building Quality
Not all commercial buildings are constructed equal. Some variations ultimately affect renovation costs. Building classes include:
i)Class A: These include the top-tier buildings that are furnished with top-of-the-line furniture and fixtures. A typical class A building tends to be located in an area with high real estate prices.
ii) Class B: This is your typical four-story building. It has average fixtures and furniture. This is the category where most buildings belong.
iii) Class C: These types of buildings have low-quality amenities and fixtures. They are typical of lower-income areas.
Understanding the building quality before embarking on any renovation project helps to focus the cost estimation process.
3) Building Codes
A building’s location and its other specifications are greatly determined by its geographical area. If it’s located within a city or its limits, the municipal authorities determine the building codes. These regulations dictate numerous aspects of a building. As such, commercial renovation costs greatly depend on the building codes of a particular area. Among the many things determined by local authorities include permitting. Renovating a commercial building is not a simple matter of fixing whatever it is that is broken; the building owner and contractor will have to seek approval from the relevant authorities, the same authorities that administer the building codes. That’s why a good understanding of building codes in a particular area is crucial to estimating commercial renovation costs.
4) Renovation Materials and Labor
Depending on the magnitude of the commercial renovation project, material and labor costs could be high. Material costs include not only the purchase of the things needed but also the cost of transportation and taxes. A renovation project involving a skyscraper may require tons of concrete, steel bars, and other such materials. Perhaps the commercial renovation project requires electrical and mechanical appliances. The costs associated with purchasing and installing all these things will factor hugely into the renovation costs.
Similarly, the cost of labor is also a crucial factor. Labor can be both skilled and unskilled. Skilled labor includes the consultants, architects, building surveyors, or structural engineers contracted to oversee certain parts of the renovation project. These professionals tend to command high fees. Unskilled labor includes porters and other manual workers at the renovation site. All such costs will significantly affect estimates of the commercial renovation project.
5) Prevailing Market Conditions
Market conditions determine a lot of things, including the cost of labor and materials. Transportation costs are also determined by several other variables like fuel prices. These are all critical things to consider when estimating commercial renovation costs. Given that the prices of these things fluctuate from time to time, having a clear schedule for when such a commercial renovation project is to be completed is crucial. This helps to account for price fluctuations over a duration of time.
All in all, commercial renovation projects require a lot of detailed planning. Calculating the costs associated with the above factors gives good cost estimates. It also helps to account for every aspect of the project. For example, a seemingly simple renovation like adding a kitchen to a commercial building floor could involve several other factors, all of which must be accounted for to come up with an accurate budget estimate. That’s why the above factors are integral to the process of calculating commercial renovation costs.