Brad Wardell's views about technology, politics, religion, world affairs, and all sorts of politically incorrect topics.
Being possessed by your possessions
Published on March 17, 2005 By Draginol In Blogging

One day we noticed we were running out of space in our current building. We also decided that, as a software company, we should try to buy a building so that we would have something to borrow against if times were ever bad.  Right now, times are really good.  So now's the time to prepare for the future.

So we find our dream building. Brand new. Just built. Great location. Ponds and nature stuff all around. Near the highway but not right on it.

And we got it for a decent price.  Not a great deal. But not a bad deal wither.  But like I said, it was just a shell.  For the "build out" we wanted to have a decent interior.  Nothing that fancy but better than what we have in our current building which can be charitably called "construction grade".

And so we negotiated a $25 per square foot build-out price.  That would include the drywall and kitchen area we're having in power outlets, and ceiling tiles and lights,and all the other stuff that takes you from an empty shell to something you can move your office into.

For $8 per square foot, we contracted out the actual carpeting and wallpaper (we're wallpapering the interior).  Since we did this, our builder was supposed to credit us the amount he was going to charge us.  And he did credit us $2 per square foot which to us seems ridiculously little but fine, whatever.

Now, from what we heard, $25 per square foot for an office build out is supposed to be a decent build out budget. Not that fancy mind you but a definite step up from "construction grade" finishing.  But apparently it isn't which is where our problems come in.

We had an extra bathroom put in. And we had our ceiling tiles upgraded to acoustical to help keep sound from traveling too much.  We also asked for some insulation to be put in-between walls to keep sound down.  And our kitchen has a few more drawers and such in it. And our lobby area has some granite tiling. 

Our understanding was that construction grade build-outs are about $15 per square foot.  So at $25 per square foot, we had some room to expect something reasonable.

But in actuality, the changes I described added $7 per square foot!  Which to us is far more than we had expected. And $7 per square foot on the space we're talking is tens of thousands of dollars difference.

So our $25 per square foot build out has become $25 + $8 + $5 ($7 - $2) for a total of $38 per square foot.  Now I don't claim to be some expert but a $38 per square foot build out should be pretty incredible.  Maybe my expectations are just off but the bottom line is that our budget is just out of control.  The net result would be a building that will have cost $175 per square foot.

On top of that, we have $110,000 in new furniture costs. Probably another $25,000 in window blinds (yes, ironic). Another $15,000 for the phone system. $10,000 for "low voltage". $10,000 for the security system. $10,000 for a generator (not sure we're going to do this now or not).

In terms of cash down, we're talking some serious bucks.  Which is why the build out cost-overrun is the straw that's breaking the camel's back.  I feel like we're being eaten alive by a thousand little contractors. But the additional $7 per square foot build out is the straw that's breaking the camel's back.  I'd be willing to go as high as $3 to $4 extra for the extras we've asked but not $7.  Which even then I'm feeling like a total chump.

Does anyone know where I can find some more information on how much build-outs on new commercial consruction should be? I just can't believe that a medium-quality build out should cost $38 per square foot.

Comments (Page 1)
on Mar 18, 2005

because that kinda thing can vary by location/market, i'd start by finding out what the parameters would be if you needed sba (or some other agency) assistance & approval. sorta like finding out what medicaid will pay for a procedure before shopping doctors.  is your builder open to financing some of the cost with cheap money (the way commercial landlords do here when there's more space than takers)? 

on Mar 18, 2005
on Mar 18, 2005
Ouch! Wish I had some info for you instead of just sympathy.
on Mar 18, 2005
I have limited experience with build out costs (I used to work for a construction company in SD, and I've had eyes on what the military pays for new construction), but I can say that the prices you've quoted here are a bit higher than what I've seen in the past. Bear in mind that cost is going to vary depending on your location, quality of materials, specifications etc etc....but I think that $38 per sq ft should get you more than a medium quality job.

Sorry I couldn't be more helpful....
on Mar 18, 2005
Brad, I agree with Dharma that you should get a medium quality, even a better upgrade than what you're expecting for the cost. Construction companies can be very sneeky. You'll have a contract with them that lays out what the construction cost of the project should be and you agree to the fees and all that. Then comes the whammy when there are additonal costs that you never saw coming which can totally throw the contract askew.

If you would like, I can give you the name of the contruction manager in my office, who is also the Assist. Director here. I've mentioned before that I work with architects and contractors. So, email me and I can give you the info. He's pretty good and would have a good idea of what's what.
on Mar 18, 2005
My friend the architect tells me the following;

If you are in a Union Labor State your prices are fairly reasonable but, if you are in a "Right to Work" state the prices are too high.

You should expect to spend on a the low side "turn-key" $100.00 sf and high side $145.00 sf.

He designs franchise resturants that are being built up and down the East Coast and as far west as the Mississippi. ( as an aside he notes construction cost are cheapest in Alabama, and highest in New Jersey )

Good Luck !
on Mar 18, 2005

An awful reminder; I just realized my ex-wife is a commercial construction estimator....

That proves it, anyone providing cost estimates in construction are *&**%%## beotches!!!!
on Mar 18, 2005
it depends on what you had done. what was the inital contract for,what did it cover. after signing the contract did you add anything extra to the contract,did you channge anything from original contract. what was in the bathroom,what was in the kitchen area. how much electrical was involved. how much insulation? how much drywall? how many rooms? what kind of ceiling tiles? every little thing has a bearing on final cost.
in other words if you agreed on an item that cost $5.00 and then wanted something that cost $10.00 you have to assume the higher rate.
make sure your next project lists everything you want prior to signing.

The above was from my father, who has a local (downriver) residential construction company. It is currently called Benchmark Construction. If you ever need anything else done you can contact him at 734-783-6138

on Mar 18, 2005

You should expect to spend on a the low side "turn-key" $100.00 sf and high side $145.00 sf.

Then we should have a very high-end turn-key.  Core building plus build out is over $160/ sq ft. 


on Mar 19, 2005
Yeah, bummer.
on Mar 20, 2005
The core building cost can't be added to the build out cost to find a complete cost, because cost is much less when both are done at the same time under the same contract. I don't know much about the cost of building offices, but I do have some close friends who just built a few office buildings, and they said the construction industry is just the pits (with the corruption and bad workers, etc.)
on Apr 02, 2005
Well we managed to work out a compromise and filled out the last of the paperwork.  By the end of May, Stardock should be in a new home!
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