This guide is for tenants who've signed a commercial lease and need to understand what the build-out will actually cost, business owners planning a space from scratch, and landlords evaluating whether a TI allowance offer is realistic. The numbers here are from active projects in Palm Beach County, South Florida — not national averages sourced from a database that doesn't account for local labor rates, permit fees, and climate-driven construction requirements.
Average Construction Cost Ranges by Space Type
Commercial build-out costs vary significantly based on existing conditions, plumbing and HVAC scope, finish quality, and how much of the MEP infrastructure already exists in the space. The ranges below represent realistic all-in construction costs — including labor, materials, MEP, permits, and GC overhead — for the South Florida market.
| Space Type | Cost Range (per sq ft) | Notes |
|---|---|---|
| Office Suite | $60–$150 | Cosmetic refresh at low end; full gut with new MEP, glass partitions, high-end finishes at high end |
| Retail | $80–$200 | Wide range based on storefront complexity, lighting design, and finish grade |
| Restaurant | $150–$350 | Kitchen-heavy; hood systems, grease trap, gas lines, health dept requirements drive high costs |
| Medical Office | $150–$300 | Exam room plumbing, specialty electrical, ADA compliance, possible AHCA coordination |
| Dental Office | $175–$325 | Operatory rough-in, vacuum/compressed air, X-ray blocking, sterilization room; equipment coordination adds cost |
| Fitness Studio / Gym | $80–$180 | Rubber flooring, HVAC capacity, locker rooms at high end; simpler yoga studios at low end |
| Nail Salon | $130–$280 | Pedicure plumbing, ventilation systems, electrical for stations — specialized MEP drives cost |
| Med Spa | $150–$400 | Treatment rooms, high-end finishes, medical-grade requirements; wide range based on service mix |
| Barbershop | $75–$160 | Shampoo bowl plumbing, mirror walls, stations, barber-specific electrical; more modest finish profile |
What Drives Cost Up
Understanding what pushes construction cost toward the top of the range — or above it — helps you scope realistically and avoid budget surprises mid-project.
- Shell space vs. second-generation space: A true shell — concrete floor, open ceiling, stub-out plumbing only — requires building all MEP from scratch. A second-generation space with existing HVAC, electrical panels, plumbing rough-in, and demising walls can cost 30–50% less to build out because you're reconfiguring rather than starting from zero.
- Plumbing scope: Every new plumbing fixture — sink, toilet, floor drain, specialty plumbing — adds cost. Nail salons with 20 pedicure stations cost significantly more than a basic retail space with a single ADA restroom. Restaurant build-outs with commercial kitchens, grease traps, and multiple sink stations are among the most plumbing-intensive projects in commercial construction.
- HVAC complexity: Adding HVAC capacity for a gym, reconfiguring ductwork for a medical office's specific room layout, or installing exhaust ventilation for a nail salon adds significant cost beyond standard HVAC work.
- Specialty electrical: High-amperage equipment (commercial kitchen equipment, dental chairs, medical imaging), specialty lighting systems, dedicated circuits for technology infrastructure — all push electrical costs up.
- High-end finishes: Custom millwork, architectural tile, polished concrete, specialty ceilings, and premium lighting fixtures can represent 20–40% of total project cost on high-finish projects.
- Permit fees and South Florida labor rates: Permit fees in Palm Beach County vary by municipality and project valuation. South Florida labor rates are higher than national averages — factor this into any national benchmark you've seen online.
What Drives Cost Down
Not every project needs to be a top-of-range build. Here's what keeps cost toward the lower end of each range:
- Second-generation space: The biggest cost reducer. Existing MEP infrastructure — especially HVAC, electrical panels, and plumbing stub-outs — dramatically reduces the cost of getting to Certificate of Occupancy.
- Standard finishes: LVP flooring, standard drywall with paint, off-the-shelf light fixtures, and standard cabinetry keep finish cost predictable and reasonable.
- Phased scope: Building in two phases — a functional Phase 1 that gets you to CO and open, with finish improvements in Phase 2 — can spread cost over time and match cash flow to business revenue.
- Established contractor relationships: A GC with standing relationships with subcontractors and suppliers gets better pricing than one assembling a new team on every project. Local GCs with active pipelines in the market typically have better sub pricing than out-of-market contractors bidding your project.
Design Fees: What's Included and What to Budget
Construction costs are one thing. Design costs are separate, and they're often underestimated at the beginning of a project.
When a licensed GC coordinates design — meaning they bring in a licensed architect or draftsperson and manage that relationship as part of their contract — the architecture fee is typically included in or closely coordinated with the overall project cost. This is the design-build model: you don't manage a separate design contract, and the GC is accountable for producing permit-ready drawings that match your budget.
If you hire a separate architect independently, expect to pay 8–15% of total construction cost for architectural services on a commercial build-out. For a $300,000 build-out, that's $24,000–$45,000 in architecture fees before the first wall goes up — and before you know whether the drawings will pass plan review in your specific municipality.
The risk of the separate-architect model is the design-to-construction gap: you can end up with beautiful drawings that cost significantly more to build than your TI allowance covers, designed without input from the contractor who will actually build the space. GC-coordinated design closes that gap by aligning the drawing process with the budget and the permit requirements from the start.
Palm Beach County-Specific Factors
National construction cost benchmarks don't apply cleanly to Palm Beach County. Here's what makes South Florida different:
- Permit fees by municipality: Permit fees are calculated on project valuation and vary by jurisdiction. The City of West Palm Beach, City of Boca Raton, Town of Jupiter, and City of Palm Beach Gardens each have their own fee schedules. Budget 0.5–2% of project cost for permit fees depending on scope and municipality.
- Inspection timelines: Building departments in Palm Beach County are active markets — inspection scheduling can add days to the construction timeline if not managed proactively. A GC with local experience plans around inspection availability rather than being caught off guard.
- South Florida labor rates: Electrical, plumbing, and HVAC subcontractor rates in Palm Beach County are meaningfully higher than national averages. If you're using a national cost estimating tool to plan your budget, add 20–30% to the MEP line items to get to a realistic local number.
- Hurricane code requirements: Florida building code includes wind load requirements that affect framing, window and door specifications, and roofing details — adding cost that doesn't appear in construction estimates from other states.
TI Allowances: What's Realistic and What to Do When It's Not Enough
Tenant improvement allowances are offered by landlords to offset the cost of building out a leased commercial space. Typical TI allowance ranges in the current Palm Beach County market:
- Office space: $40–$80 per square foot, depending on building class and market conditions
- Retail space: $50–$100 per square foot — higher in newer or Class A centers
- Medical/dental: $60–$120 per square foot in medical office buildings
Compare those numbers to the build-out cost ranges above and you can see immediately that TI allowances rarely cover the full cost of a build-out for specialized space types. A dental office at $175–$325/sq ft with a $60–$100/sq ft TI means the tenant is funding a significant gap. Knowing this going in — not after permits are pulled — lets you negotiate TI, phase the scope, or adjust the space plan to fit the budget.
The right contractor helps you have this conversation before you commit to a design. The wrong contractor quotes you a number that fits your TI, pulls permits, then hits you with change orders that recover the gap they knew was coming.
How Cost and Timeline Interact
Construction cost and project timeline are linked in ways that catch tenants off guard. Compressing a schedule costs money. Premium scheduling — paying subcontractors to prioritize your project over competing work — adds 10–20% to trade costs. Expedited permit processing (where available) adds fees. Overtime work adds labor premiums.
The inverse is also true: a project that runs long because of poor planning, design revisions, or permit delays doesn't save money — it accumulates costs in the form of extended lease obligations, delayed revenue, and carrying costs on any build-out financing. Budget your timeline as carefully as you budget your dollars. A realistic 16-week schedule executed cleanly is cheaper than a 10-week schedule that blows out to 20 weeks.
For most commercial build-outs in Palm Beach County, budget 12–20 weeks from lease execution to Certificate of Occupancy. Shell-to-finish projects with complex MEP or municipal reviews with heavy volume may run longer. Second-generation spaces with minimal MEP changes can come in under 12 weeks.