Business owners and stakeholders often hit a wall when considering costs of commercial space in evaluating capital outlay plans. I met with Parker Farris, Business Development and Project Manager for Grand Construction, to get an answer to the question I am often asked: how much is it to build in Zachary?
Farris and the team recently completed improvements at the South Atlantic Galvanizing plant and remodeled the new Porch & Parish headquarters, which was formerly the Lion’s Club building.
The average commercial office leases for $18/sf annually plus net fees, like the tenant’s portion of taxes, insurance, and maintenance. These are known as the three nets (NNN) of space leasing. The average retail office building is $15/sf plus net fees. Light industrial buildings average $9-$11/sf annually plus net fees, but are in short supply in Zachary and surrounding areas.
The average cost to buy a used building varies so widely, the analysis is outside of the scope of this article. Construction costs are separate from commercial land costs, which commonly run from $3-$23 per square foot, depending on frontage location. Typically, higher average daily car counts drive higher land value. Daily car counts are available at dotd.la.gov.
Grand Construction is advising clients to first consider the purchase and renovation of an existing building, Farris said. Depending on location, building size and cost of acquisition, buying and renovating is typically saving people time and money, which is why renovation is their first recommendation. Unless available vacant land in a desirable location at a reasonable cost is available, renovation is the first recommendation.
What’s the cost of a new building?
Building a new brick on slab building with higher end interior finishes and architectural shingle runs from $250/sf to $300/sf. The foundation runs about $12/sf. For the parking pad, a 3,000 PSI mix is running about $130/yd, or $8/sf because concrete just had a big price increase. To refresh the paint, expect to pay around $0.75/sf of wall and ceiling area.
Which is better, metal studs or stick built?
We are seeing a pricing increase on both. It is day by day with metal or stick built. Lead time issues are far less substantial when stick building vs. PEMB/Conventional steel with metal studs.
What trends are driving costs up or down?
Supply chain issues, which are likely to continue. Prime commercial office and warehouse space is also in short supply, which is driving up acquisition costs. The latter is a sign of a robust economy.