Do you know what to look for in commercial construction?
What does quality construction look like?
Where are the best places to find skilled contractors?
If you want to know the answers, you’re in the right place.
Let’s talk all about commercial construction, from the stages of a project to selecting the right contractor.
What Is Commercial Construction?
Commercial construction involves both private and public sector buildings that are often much larger than the typical residential structure (apartments, single-family homes, townhouses, etc.).
A commercial construction project might be a ground-up project, a remodel, or a build-out that turns a pre-existing structure into a turnkey building for new tenants.
Examples of commercial construction include:
- Manufacturing plants and other industrial buildings
- Data centers
- Office space
- Hospitals and medical centers
- Schools and universities
- Grocery stores
- Retail shopping centers
But how much do you know about the commercial construction process?
The Stages of a Commercial Construction Project
In a typical commercial construction project, the building stage can take anywhere from 4–12 months. But that timeline doesn’t include all of the pre-construction work that happens behind the scenes.
Here are the five stages of a commercial construction project:
Every great commercial construction project begins with a well-laid plan.
During the development and planning stage, you’ll map out the entire concept from start to finish, including:
- Which type of building you want and the ideal features
- Where you plan to build (and whether the future location matches local zoning laws)
- What the building will look like
- Whether any specialists will be required to complete the job
- How much you’re willing to spend
This pre-design stage is also when you’ll start building your team.
First, you’ll hire an architect to create the blueprints. You’ll also hire a general contractor who can organize the right experts to bring those plans to life.
Not sure where to begin?
If you want to simplify the entire process, a design-build firm (like our friends at ZP Architects) could be a better solution. These organizations are slowly but surely taking over the construction industry, handling an entire project from beginning to end.
Once you work out the project’s logistics, your architect and general contractor will take the lead. They’ll discuss everything from budgeting and potential timelines to materials and building specs.
The design phase often includes:
- Planning out the size of individual rooms
- Finding out which permits the team will need to finish the build
- Calculating material, labor, and machinery costs
- Factoring in utility hookups, drainage, etc.
- Deciding on the building’s orientation
- Comparing building plans to local codes
- Creating a building model
- Contracting other experts, like engineers
By the end of the design stage, you’ll have a roadmap of the entire project, including detailed drawings and schematic designs (to make sure your future building represents your company well).
You’re one step closer to breaking ground on your new building. This next phase, the pre-construction stage, is where you’ll expand your team and square away a few final housekeeping tasks before building.
Pre-construction begins with acquiring a building permit, making any necessary changes to the plans, and getting insurance for the crew (such as builder’s risk insurance).
In this stage, you’ll add some more people to your team, including:
- A project manager to oversee operations
- A superintendent to lead the crew
- A field engineer to analyze the site for safety
Steel buildings and other small-scale projects can require little more than a four-person team and a basic toolkit. But the average commercial build requires heavy construction equipment and (literal) tons of materials.
The procurement stage is where you might hire subcontractors to handle more specific tasks, like concrete, HVAC, masonry, roofing, and more. Your general contractor will also secure labor, order materials, and rent equipment.
It’s finally time to build!
The on-site superintendent will prepare the crew for the project, create schedules (and schedules of values), check for safety, and monitor for quality control.
What Quality Commercial Construction Looks Like
Before choosing a commercial construction company to build your new warehouse or retail center, it’s essential to learn what quality commercial construction looks like.
Unfortunately, some contractors use low-quality materials to cut costs and increase profits.
While high-quality materials cost more, they also:
- Last longer without needing repairs or replacements
- Ensure safety both during construction and after
- Ward off preventable structural failures
- Prevent leaks, mold, pests, and other long-term issues
As the old saying goes, “You get what you pay for.”
In the construction world, low prices go hand-in-hand with cheap construction and huge risks.
Not every construction project will go 100% as planned. And you can’t entirely plan for every roadblock you might encounter, like bad weather, unexpected labor shortages, or last-minute design changes.
On-time delivery means a reasonable timeline that only requires minor adjustments along the way (if any).
How can you guarantee that?
It all begins in the pre-planning stage.
A good general contractor will create a Gantt chart to map out every piece of the project while assigning it a timeline. They’ll also account for the time of year, weather, permits, and possible plan changes to promise you a reasonable finish date.
Meets Construction Standards
Let’s be honest:
A quality construction project is one where the building department doesn’t shut down halfway through for lack of permits, doesn’t violate any local building moratoriums, and is safe to enter post-construction.
In other words, everything is done by the book.
The Right Subcontractors
For more complex projects and complete build-outs, you’ll need the expertise of a team of highly specialized subcontractors.
Examples of professionals you might see on the job site include:
- Concrete workers
- HVAC specialists
- Demolition workers
- Masonry experts
Hiring subcontractors can also cut costs, as they’re often temporary workers and have their own insurance and licenses.
Represents Your Company Well
If you wanted any old building, you’d just buy or rent a pre-existing structure.
So, make sure the end result represents your company and its values well from both the interior and exterior.
Has No Punch List Issues
When the project is almost complete, your contractor will tour the site to note any unreasonable flaws or incomplete work that needs addressing.
This punch list walkthrough can guarantee a durable structure that’s safe for entry and ready to use for business!
Budget: How Much Does Commercial Construction Cost?
At $16–$20 per square foot, the average commercial construction project can run up a hefty price tag. And once you build out the structure to include finishings like insulation, interior paint, and an HVAC system, the cost per square foot can quickly become $400+.
However, the total cost depends on quite a few factors, like building size, delivery fees, location, and labor costs.
Design and Structural Elements
The best part of a ground-up structure is that you can customize nearly every aspect of it. But, your design choices will determine the final cost of your building.
Below are some structural design elements that you’ll either need or want to consider when planning your project. Each of these will impact your total cost:
- Concrete and columns
- Wood frames
- Beams and trusses
- Ceilings, roofing, and walls
- Staircases, elevators, and escalators
- Windows and doors
One of the perks of hiring a design-build firm is that you can factor in all these elements before moving ahead with the design phase.
A small office space will be much more affordable than a 100-story skyscraper or 600,000 square feet of warehouse space. The larger the structure, the more materials you’ll need and the more hours of labor you’ll have to cover.
Material Costs and Delivery
Every material used in the project — from the steel frame to the poured foundation — will add to your subtotal. And don’t finalize your budget without factoring in delivery costs and taxes.
“Building out” your structure and outfitting it with finishing touches like HVAC, roofing, flooring, and the like can also add another $3+ per square foot. Fully customizing your build with high-end materials will add even more.
For example, a single-story retail building in a sparsely populated town will cost less than that very same building in a nearby city. A matter of a few miles can hike the price by double.
Cities and regions with unions tend to charge more for commercial construction projects than non-unionized areas.
That’s because union workers tend to earn more. For example, according to the Bureau of Labor Statistics, non-union construction workers average weekly earnings of $868; union members earn $1,257.
Also, factor in how inflation and wage rates might change between today and the end of the project.
Insurance and Permits
Insurance and permits are two corners you don’t want to cut when building a commercial space for your company.
General liability insurance, workers’ compensation, and tool and equipment insurance will cost you a bit more in the long haul. Still, it’s an investment that can save you thousands (or even millions) if there’s an injury or equipment damage.
How to Find a Commercial Construction Contractor
Did you know that there are more than 680,000 construction services companies in the United States?
Short of researching every single one, there are a few ways to narrow down your hunt and guarantee a building that matches your expectations.
Ask for Referrals From Those You Know
Research from Nielsen suggests that some 83% of people trust the recommendations of people they know. Start your search by asking your fellow business owners which commercial contractor they use and trust.
You can also search the Associated Builders and Contractors’ chapter locator to learn about local contractors in your region.
Or, you might want to find the website of your state’s licensing organization to see if they have a database of state-certified contractors. There’s a state-by-state list of licensing organizations on this website.
Narrow Down Your Choices (and Ask for References)
Any company with overspilling coffers can make a tempting construction bid. But do they have a stream of previous clients ready and willing to vouch for them? A truly great commercial contractor will hand over a long list of references.
Don’t be shy when you call them!
Ask questions like:
- Did they stay on budget?
- Did they offer an accurate timeline and finish on schedule?
- What was communication like?
- Was the crew (and end product) professional?
- If you have a future project, would you hire them again?
If any answer makes you uneasy, trust your instincts. There are more than enough construction companies in your area for you to be picky.
Set Up an Interview and Ask Questions
Before you hire a commercial contractor, schedule an interview to vet them even further. Again, come prepared with questions.
Ask how long they’ve been in business, what types of services they offer, whether they have a team of subcontractors, if they’ve ever had safety issues on worksites, and if they’re insured.
Request to see their portfolio, too. The more you know, the better.
Choose One That Matches Your Needs
Choosing a contractor isn’t a decision to make lightly. And as tempting as it is to accept a low-ball offer from a contractor that looks great on paper, you must consider factors other than price.
Do the company’s values, promises, and timeline match your expectations?
Do they specialize in your geographical area or in the type of building you’re looking for (like steel)?
Are they licensed and insured in your state?
Do they have years of experience and an admirable track record?
Is the contractor willing to communicate openly and honestly on an agreed-upon schedule (monthly, weekly, daily, etc.)?
11 Signs of a Great Commercial Contractor
Sometimes, all it takes is a little chit-chat to decide, “this is the commercial contractor for our project!”
But if you’ve always leased facilities in the past, this might be your first time reaching for help in the construction industry.
To help you weed out the duds while choosing the best fit, here are 11 signs of a great commercial contractor:
- Promises regular communication between everyone working on the project, including you
- Practices quality pre-planning and budgeting to account for things that might go wrong or need additional attention down the road
- Predicts and informs you of possible delays before they happen
- Is honest, professional, enthusiastic, and has a realistic mindset
- Holds proper licensing and insurance
- Offers full-service packages that cover everything from drawings and schematic designs to labor scheduling and procurement
- Requests everything in writing instead of insisting on verbal agreements that may or may not hold up
- Has years of experience in the industry and can back up their expertise with photos, references, and a thick portfolio
- Boasts great reviews and references and a solid reputation
- Has an impressive safety record, newer equipment and machinery, and worker’s compensation insurance
- Can promise a realistic timeline and budget and is willing to do whatever it takes to stick to them
Overall, the best commercial contractor will make the often stressful construction process much less hectic for you and your company.
Commercial construction projects have dozens of moving parts and can seem overwhelming to the average person. However, it’s your job as a company owner to invest in building projects that last.
FMP Construction specializes in large-scale steel buildings customized to meet your company’s operational needs. If you’re considering new construction in the Denver area, call us at 303-337-6982 or email us at firstname.lastname@example.org.