What Goes Into Commercial Construction Costs
Commercial construction projects encompass a wide variety of planning, materials, permits, and workforce talent fees. When reviewing what goes into construction costs, a thorough budgeting process includes hard costs, soft costs, and site costs.
Planning for Hard Costs in Commercial ConstructionHard costs account for the physical construction of a project. These include the price of structural materials, doors, windows, insulation, HVAC systems, mechanical, electrical, and plumbing services. Hard costs should also include any equipment rental fees as well estimated labor costs.
Estimating Soft Costs for Commercial ConstructionSoft costs are equally important when estimating project costs. The most common of these costs are:
- Permit and certification fees which involve zoning, electrical, mechanical, plumbing, environmental, LEED certification, and others.
- Insurance fees in addition to general liability insurance, might be required by local regulations to include special policies for builder’s risk, and potential weather hazards. A separate policy for materials that are purchased, but not installed, might also be needed.
- Blueprint drafting and review payments to architects, engineers, and designers.
- Interest fees and taxes.