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Commercial HVAC Unit Cost

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Cafco Services

Image credits: Cafco Services

Commercial buildings rely on a good HVAC system that is customized to meet their temperature and indoor air quality standards. A tailored HVAC solution is equipped to create a comfortable workspace for employees by taking care of optimum heating, cooling, and ventilation settings. At the same time, it ensures the right ambient temperature for various commercial operations, equipment, and machinery depending on what type of business you run. Since such projects are long-term investments for a business, it is always recommended to understand your HVAC scope as fully as possible before any work begins – which means that it is time to take your calculators out and get right down to the world of numbers. The overall commercial HVAC unit cost will include both unit prices and installation charges as the primary cost metrics – in addition to other factors that we will visit in this article.

Average commercial HVAC unit costs

On average, commercial HVAC systems can cost between $5,000 – $40,000 or more depending on your project’s specifications and complexities. Large HVAC units that require updated ductwork are more expensive to set up compared to small, ductless units. For installing a brand new HVAC unit with ductwork, your costs will average around $12,000 if we are strictly speaking of only unit, installation, labor, and ductwork charges.

For HVAC unit replacement, the project should average around $8,000 – again, without counting in other influencing factors. First-time HVAC unit installations are generally costlier than unit replacements, as configuring the HVAC framework with electrical, plumbing, and duct layouts is more labor-intensive. The following are some key breakdowns of commercial HVAC unit costs based on linear/square footage and hourly rates. The more complex your project becomes, the higher the average costs will be.

  • Office HVAC unit installation: around $30 per square foot
  • HVAC unit replacement: $25 and above per square foot
  • HVAC ductwork replacement: up to $25 per linear foot
  • Labor charges: around $100 per hour

To fully understand the cost distributions for your specific project, make sure to request a breakdown of associated items that form the final cost. This straightforward cost checklist by Sanalife is a good example, and you can ask for similar breakdowns from potential commercial HVAC contractors while receiving quotes. It will also help you set the budget for standard HVAC units and energy-efficient units based on individual factors like labor and maintenance.

Calculating HVAC life cycle and efficiency costs

Image credits: Sanalife

Factors that affect these costs

Commercial HVAC unit costs are driven by various project-bound factors that differ for all business types. In general, anything that makes the work more difficult or time-consuming will increase the final cost. For example, materials and labor that are hard to access will make your project more expensive – as will outdated building structures with no proper ductwork already in place.

Different commercial buildings have different HVAC demands in terms of the total space they want to heat or cool, the occupancy levels of each room, the building’s insulation scope, and so on. Here are some of the main influencing factors that you will encounter as a commercial business owner planning for the right HVAC solutions – and you can use these as cost elements for detailed breakdowns during the hiring stage.

Unit brand

The first major consideration for HVAC unit costs is the brand itself. Leading HVAC brands such as Lennox, Carrier, and Trane offer top-tier HVAC units, so their costs are also on the high end. You might find a commercial HVAC contractor that partners with such brands to offer more tailored and professional installation services based on equipment, parts, energy efficiency needs, automation, and building retrofits – which is why choosing the right company is so important. The following cost comparisons in terms of brands and unit types from HomeGuide will make an excellent reference point.

HomeGuide

Image credits: HomeGuide

Unit type

The above table also hints at how commercial HVAC costs can differ based on the type of units you want to buy for your building. Your commercial HVAC contractor will help you decide the relevant systems you should install for optimum results, so the unit type, as well as its associated technologies, can factor into the final costs. For example, Variable Air Volume (VAV) systems are designed for better energy efficiency through adjustable airflows based on the ambient temperature, whereas Constant Air Volume (CAV) systems only offer on and off settings at the same programmed temperature. CAV systems include single-split and multi-split units that are ideal for various commercial spaces, however, they have major drawbacks like reduced efficiency and increased bills.

Likewise, installations for rooftop units (RTUs) have technical differences to support features such as HVAC zoning and better coverage. Rooftop units are fully assembled systems that house every HVAC component into the same, all-in-one unit – ready to be installed on the roof. So, they also need to be weather-proofed for extra durability and can have a lengthy installation process. Rooftop installations require a crane, which will add to your equipment charges and is another example of how individual complexities can drive up commercial HVAC unit costs. Apart from choosing compatible unit types, you will also have to think about other cost-driving HVAC aspects like:

  • Boiler and chiller capacities
  • Air handling requirements
  • Unit size for proper heating/cooling coverage
  • Parts such as tanks, valves, pipes, connectors, sheet metal, ductwork, vents, HVAC insulation, etc.

Building permits

Certain types of commercial HVAC units often need to pass building permits and approvals before being installed. This is because your chosen units should match the building’s electrical and plumbing configurations to ensure safety and compatibility. Permit fees can range around $100 for HVAC unit replacements and go up to $1,000 for new installation projects, so it is crucial to get these covered before any work begins. More technical demands in the form of automation controls introduce a whole new range of permits that need to be cleared, especially if your building is quite old and not equipped to handle technology upgrades. In this case, various renovations are planned to first bring the building structure to a technologically acceptable standard before adding the required utilities – followed by a final inspection that gives the HVAC teams their official green light.

Building size and HVAC unit size

The size of your commercial building, as well as the size of your HVAC unit, are both important factors. Choosing compatible unit sizes based on how big or small your building is will help you make the best out of your heating, cooling, and ventilation requirements. You do need expert advice for this part of the project too, so gear up for a detailed consultation with your HVAC contractor before making any purchases.

A unit that is too small for the given space cannot heat/cool the area efficiently and will only end up overworking itself – which also increases the utility bills.

Similarly, a unit that is too large for a commercial space will repeat the heating/cooling cycles more often – which is not very efficient either, as it leads to unit failures down the road. Having an expert connect the dots in this case will help you find units that are compatible with your building’s size, offer ideal HVAC coverage, and last longer with optimum usage. Other size-related factors here are the building occupancy and commercial activity for your business. Heavily occupied buildings with more foot traffic – like restaurants and hospitals – will have greater HVAC loads compared to offices and small retail stores. As a result, their requirements for HVAC unit sizes and capacities will differ accordingly for the same square footage.

Labor charges

The labor charges for commercial HVAC unit installation depend on your project’s complexity. We mentioned earlier that the overall costs can go up based on how complex your project is, and this has everything to do with the actual workforce responsible for the installation. Old commercial buildings with outdated infrastructures should first be retrofitted in order to become HVAC-friendly, so this adds an extra level of work before the actual units are installed. Quite often, older buildings lack a compatible ductwork layout that can support your choice of HVAC units, causing the installation team to focus on ductwork essentials as well.

Ductwork condition

We have only brushed over the ductwork aspects until now, so here are some key insights into HVAC costs based on the condition of your ductwork. Checking the ductwork status is important before installing any HVAC unit, as your system’s energy efficiency and durability can slip through the cracks along with all the escaping heated/cooled air. Your commercial HVAC teams will check the overall condition of the existing ducts, and if any upgrades are needed, these will be incorporated before the installation stage. Faulty ductwork can be too taxing on the installed units because they will have to overwork to compensate for the lost air, which eventually leads to increased bills, inefficient heating/cooling, poor indoor air quality, damaged parts, and unit shutdowns. As a business owner, you might be planning for custom ductwork to go with specialty commercial HVAC units, so now is the time to explore your options with the contractor.

You might as well choose to install ductless units based on your contractor’s evaluation, which will reshape your initial budget accordingly. Although HVAC unit installations with new ductwork are quite expensive in terms of the initial upfront costs, they have the long-term benefit of improved efficiency and durable setups that will not need as much maintenance.

Now that we have explored both labor and ductwork factors, here is a simple cost breakdown by HomeGuide that puts the unit-labor-ductwork triangle into perspective:

Costs to install HVAC system with ductwork

Image credits: HomeGuide

Automation

Commercial HVAC unit costs are also influenced by your choice of automation technologies and thermostat controls. This includes aspects such as smart thermostats and customizable HVAC zones for different users. The “smarter” your HVAC amenities, the higher the costs. Automation features allow businesses to keep a check on their energy usage and plan more efficient management strategies, so this is ideal in terms of going green as a business. Smart HVAC units, parts, and thermostats used along with apps can help you track your carbon footprint, create maintenance alerts, and monitor the status of each installed unit. Usually, smart HVAC integrations of such kind require specific electrical and mechanical frameworks within the building, including special permits that are important to clear for safety purposes. So, if your commercial building is outdated, you should leave generous room in your budget plan to accommodate pre-installation stages like electrical optimization, code compliance for smart technologies, and relevant ductwork considerations.

SEER rating

Last but not least, the Seasonal Energy Efficiency Ratio (SEER) is the main cost-influencing factor for energy-efficient HVAC systems. Commercial HVAC units with higher SEER ratings are more energy-efficient and also cost more than standard HVAC systems. You should consult with certified SEER experts who can guide you based on your specific HVAC needs if you are planning to install SEER-positive options. In general, the initial costs to install such a system are high, but they are offset by the energy savings you accumulate down the road.

Conclusion

While we have discussed some average numbers in this article, it is hard to pick just one quick number to represent a commercial HVAC unit cost. This is because you will not just pay for the unit alone. You will also pay for a range of associated factors like labor and building conditions, which is why project estimates differ massively for each business. Whether you are installing a new commercial HVAC unit or replacing an old one, make sure to request a detailed cost breakdown that includes everything from unit costs to future preventive maintenance services. Commercial HVAC contractors often include ongoing and future maintenance charges within their quotes, so this should help you narrow down your contractor pool.

A tailored maintenance plan is a smart backup for preventing costly red flags like unit failures that can cause business downtimes, prolonged repairs, and additional overheads. If you are installing new commercial HVAC units, you can limit the need for unit replacements by planning regular maintenance programs during different times of the year. This will ensure that the expensive setup pays for itself, lasts longer, and meets the heating/cooling requirements of your commercial space.

Commercial Build Out Estimates

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WeWork

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During your hunt for the right commercial building, the condition in which you find one determines how much work needs to be done before the space becomes move-in-ready. It is not possible to find a perfect-fit commercial space that checks all of your boxes as a future tenant. There is always some scope for improvement to make the area better configured for your specific business. If you are leasing an empty shell space, a significant number of improvements are required compared to a previously occupied building that has already been built out. So, the costs involved in such a project can cover as little as fresh paintwork and go up to funding a full-scale makeover. Before receiving commercial build out estimates for your project, you need to have at least a basic and relevant financial standpoint for smarter negotiations – and in this article, we will share both numbers and factors to help you out.

Commercial build out estimates

Definition

A commercial build out refers to all the customized changes that are approved for a building in order to make it more optimized for a certain tenant. The process is also known as tenant improvements and fit out improvements for this reason. It is primarily geared toward helping a business create a unique brand identity. The build outs can be both small-scale and large-scale updates that add purpose, value, and personality to your leased space. Such a project allows commercial buildings like retail stores, offices, restaurants, gyms, and warehouses to undergo functional and aesthetic transformations. It focuses on both current and future requirements to ensure a smooth occupancy period, so this is a great time for you to plan ahead and add some futureproofing elements if you intend to stay for a longer time. Some examples of a commercial build out include:

  • Structural additions like custom walls, acoustic ceilings, flooring, carpeting, windows, etc.
  • Technical aspects for HVAC, plumbing, lighting, and other utilities.
  • Additions for new conference rooms, breakrooms, changing rooms, lobbies, parking spaces, and so on depending on your commercial setting.

Cost estimates

Commercial build out estimates can vary based on a number of applicable factors such as the level of customization, the condition of your building, and the type of business you will run – more factors to follow further below! Considering the average extremes, building out a commercial space can range between $50 – $300 per square foot. The range can shift up by an additional $10 to $20 on each end for a first-generation shell space that has never been built out before. On the other hand, you can expect the average costs to be a lot lower for a second-generation building with a long history of improvements left by the previous occupants. The greater your specialized needs for the building, the higher the estimates. Here are some insights into the estimates you might work with for different commercial buildings:

1. Office build out estimates

For an office build out, it is important to fully understand your corporate expectations for the leased property. Since your added improvements will shape your corporate image, they should be as tailored as possible in order to establish your commercial footprint – both in terms of functionality and aesthetics. Some examples of office build outs include:

  • Creating open and airy workspaces with skylights and tall windows.
  • Adding private offices and conference rooms.
  • Adding amenities like breakrooms, an office gym, and a lounge area.
  • Expanding the reception to include a bigger waiting area.
  • Installing glass fronts and custom millwork.
  • Adding acoustical treatments for better sound absorption.
  • Interior and exterior signage.

Basic office build outs can cost between $50 – $150 per square foot, whereas complex and high-end improvements extend to $200 – $300 per square foot. So, a mostly open office workspace with very few enclosed individual rooms will be on the low end of the range, and a mixed floor plan with more private offices and enclosed conference rooms will be on the high end. This is because cost estimates increase according to the amount of work that needs to be done, so the more labor-intensive your specifications are, the higher you will pay for the build out. For context, a 1000-square-foot office will cost around $55 per square foot to be built out, which totals an estimate of $55,000.

Seacoast Construction

Image credits: Seacoast Construction

2. Medical office build out estimates

Medical offices tend to have more technical requirements than a standard office, so this can add to the overall estimates accordingly. In general, commercial build out estimates for medical offices range from $50 – $150 per square foot. For a 1000-square-foot medical office, the average build out cost is $65 per square foot, giving a total of $65,000 for the whole project. The associated tenant improvements usually include:

  • Building a reception and a waiting area.
  • Adding the required number of clinics and examination rooms.
  • Installing voice and data cabling and security frameworks.
  • Building ADA-compliant restrooms.
  • Including sufficient lighting.
  • Adding signage and landscaped exteriors.
Perillo Construction

Image credits: Perillo Construction

3. Retail build out estimates

Retail properties can have varying build out estimates for grocery stores, malls, boutiques, etc. They tend to cost between $50 – $200 per square foot. Projects for retail tenant improvements are very brand-oriented because everything from the interior layout to the displays and signage highlights your retail ambition. This is also what makes your store a go-to place for happy customers. You can expect such a project to focus on:

  • Designing the right aisle layout.
  • Maximizing the foot traffic.
  • Building merchandising scopes through displays, stocking layouts, and custom décor.
  • Adding checkout terminals.
  • Adding custom storage spaces and changing rooms.
  • Customizing the façade and landscape aesthetics.
  • Adding a parking lot.
Construction Concepts

Image credits: Construction Concepts

4. Restaurant build out estimates

A restaurant is typically comprised of a commercial kitchen, a main interior dining area, an optional outdoor dining space, restrooms, and a parking lot. Build out estimates for restaurants can be anywhere between $200 – $300 per square foot depending on your level of customization and aesthetic focus. Here are some key build out aspects that are commonly used by restaurant tenants:

  • Custom lighting, décor, and signage for both interior and alfresco dining spaces.
  • A waiting area and private dining spaces.
  • Optimized foot traffic for dine-in and take-away customers.
  • HVAC and technical upgrades for specialty kitchens.
  • Exterior landscaping and design.
  • Health and safety upgrades.
Anazao

Image credits: Anazao

5. Fitness center build out estimates

A fitness center can cost around $200 per square foot to be built out based on your requirements for the available space. You might want to add improvements like:

  • Glass fronts and interior/exterior signage.
  • Custom lighting and HVAC.
  • Locker and shower rooms.
  • Optimized flooring to hold the fitness equipment.
  • A large main workout area.
  • A parking lot.
  • Acoustic treatments for better sound isolation within the space.
Jordy Construction

Image credits: Jordy Construction

6. Warehouse build out estimates

Commercial build outs also focus on areas of adaptive reuse that give an existing space a brand new purpose. Warehouse transformations are some of the most trending adaptive reuse projects, as they allow businesses to create their own commercial structure within an industrial warehouse. This mix of industrial and urban personalities really sets the tone for creative designs in commercial settings. In general, you could build out an old warehouse into a new one, or you could repurpose it for a completely different commercial activity. The vast warehouse main area is ideal for open office workspace layouts, art galleries, event halls, showrooms, and other businesses that are driven by the freedom of space and creativity. For a 1000-square-foot warehouse, the average commercial build out estimate will be between $40 – $60 per square foot, giving the total range of $40,000 – $60,000 as a whole.

Office Snapshots

Image credits: Cuningham Group Architecture via Office Snapshots

Commercial build out estimates calculator

Various online calculators can be used to receive quick initial estimates for your commercial build out project. Usually, contracting companies provide their own calculator tools on their websites, so this helps with working out accurate quotes that include updated material costs and labor fees. B7 Builders has one such quick-estimate calculator for different commercial buildings like offices, medical centers, and warehouses. It uses Southern California’s updated material and labor data for 2022 and can be used for getting a rough idea of project costs for other regions.

You just need to select your commercial building type and enter details like the total square footage, building condition (shell space or second generation), types of finishes, layout, flooring/ceiling/wall/lighting options, ADA restrooms, and so on. Once you enter the main build out specifications like these, the calculator will display both low and high estimates for commercial build out costs per square foot as well as the total value.

Costs per square foot

Cost-influencing factors

Commercial build out estimates can vary according to all the applicable factors that influence your specific project. Since each build out is different, it is important to get in touch with the right commercial contractors who can help you connect the dots better. Here are some of the main external factors that you need to consider while setting a budget in order to obtain a more realistic number.

Allowance scope

A tenant improvement (TI) allowance is mainly a project discount offered by the building owner to help you fund your build out – either partially or wholly. It is stated as a cost per square foot and is open to negotiation depending on the versatility and win-win potential of your project. Technically, it is the building owner who pays for the build out process, but if any improvements go over budget, the difference should be covered by you. Your building owner will be better motivated to offer a generous allowance if your added changes can be retained and reused for the next potential tenant – particularly someone who has a similar commercial scope as yours for an office space, a café setting, or a gym. Your final estimate will then be the initial budget minus the allowance, which effectively reduces your out-of-pocket expenses.

Building condition

The next crucial factor is the condition of your leased building. First-generation spaces or shell spaces will be made available to you in a very raw and unfinished condition, which increases the amount of build out work considerably and adds to the overall estimates. In comparison, a second-generation space might already include some of its previous improvements that you can reuse, so the costs for building out such a space will be a lot lower. If you want to add more custom finishes and utilities to a shell space, your final estimate will easily reach the top-tier range. However, if you find a suitable second-generation building with reusable amenities like lighting and HVAC, you can instead direct more money to other key areas like custom aesthetics and branding.

Previous use of space

Another building-related factor is its previous use of space – which refers to how the building was used by the previous tenant. If you want to lease a commercial property to open a gym or a fitness center, it will be much easier and quicker to move into a building that was already built out for this purpose. This is because most of the common amenities like locker rooms, shower rooms, main workout spaces, optimum lighting, and reinforced flooring are already there, so your project estimates will only have to cover custom additions like décor and signage.

Region, material, and labor

Regions can affect build out costs massively because materials and labor are both linked to where you live, so access to the required materials and labor totally depends on your regional and geographical advantage. It is important to plan local backups beforehand so that supply chain disruptions and labor unavailability do not impede your project’s flow.

Building codes and inspections

The applicable building codes for your leased space will also set your financial scope, especially if you are building out a commercial property for an entirely different use than its original setting – like warehouse-to-office conversions, office-to-restaurant conversions, and so on. The building type and condition should match your commercial purpose, so it is important to plan a code-compliant build out to prevent safety issues and legal setbacks down the road. Permits and approvals are an integral part of any commercial build out, and these will be handled by your contracting team.

In addition, regular inspections should be conducted to ensure code compliance and building compatibility. All of such permit, approval, and inspection fees fall under soft costs which make up around 25% of a typical build out project estimate. The more challenging the build out, the more the applicable codes, and the higher the soft costs.

Conclusion

Updating your leased building to make it more suitable for your brand is a crucial decision for a business owner – or a new tenant. Make sure to address calculator estimates and factors like those discussed in this article, as you want the contractor collaboration period to be as detailed as possible in order to clarify your improvement scope. Physical improvements add value to the commercial real estate and turn the basic brick-and-mortar into a brand-inspired setting, so it helps to keep an eye out for win-win scopes during lease negotiations. This will allow you to bridge several gaps between planned and actual estimates and launch your project from a stronger negotiation ground.

Warm Dark Shell

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MacRo Commercial Real Estate

Image credits: MacRo Commercial Real Estate

All commercial properties that are about to be leased to tenants have a certain initial condition in which they are handed over. It is common for building owners to lease their commercial spaces in a shell condition, and you will come across several variations of the term “shell” during your hunt for the right building type. In commercial real estate, a shell is the first stage of a leasable building’s life cycle, and it is exactly what the name suggests: an empty space with an outer cover. Shell-type buildings just have the basic exterior structure like a roof, floor slabs, and outer walls. Therefore, shell leases deliver your chosen building in its bare-minimum condition. There is a whole spectrum of different shell types as well, ranging from cold and warm to vanilla, grey and dark – which can be quite confusing to fully understand. To make things simple, here is an analysis of the two most basic types of building shells: a cold dark shell and a warm dark shell. Both of these are typically the origins of a building and are ready to receive their first-ever layer of improvements for tenant occupancy.

What exactly is a shell condition?

Definition

A building shell is simply a 4-walled empty structure that is about to be improved and occupied for the first time.

It refers to a building’s most basic appearance in which it can be presented to visiting tenants – because prior to the shell condition, there will be “Caution! Area Under Construction” safety signs barricading the site! Such a commercial building includes just the 4 main exterior walls, a roof, and a floor slab. There are no usable features inside, so you will not find any HVAC, lighting, finished ceilings, utilities, elevators, sprinklers, etc. It is an unfinished space available for tenants who want to customize the build-out process right from the start. Shell spaces normally exist as first-generation buildings that have never been improved, occupied, or updated before. To understand how move-in friendly they are, commercial experts refer to various shell types to distinguish between the different options, as discussed below.

Shell types

A building’s initial state decides your build-out budget, move-in time, and allowance scope to fund your project. In commercial real estate, building owners and tenants often have different views on what a shell condition entails, which is why it is important to clarify the building condition that will be delivered to you for leasing. This should be stated clearly in the lease to avoid disputes later on. In general, a building can be:

Dark shell spaces have no lights – hence the darkness! They also lack any functional elements like electricity, plumbing, HVAC, ductwork, painted walls, or tiles. In contrast, vanilla shells go a step above and include some basic interior lighting to illuminate the space. These are 2 major shell types from which different variations are derived. Since the shell hierarchy can extend depending on what you want, it will be easier to focus only on dark shells first as they are the main starting points of any commercial building. You might wonder why anyone would choose to lease a commercial property in its dark shell condition. The answer is that these dark shells provide maximum freedom to customize the interior space however you like, which is a huge incentive if you are planning to stay for a comfortably long time.

What is a cold dark shell?

Definition

Before discussing warm dark shells, it will help to first understand the preceding stage of cold dark shells. Within the shell spectrum, the word “cold” refers to a lack of heating within the space, making it cold to be in. This means that a cold dark shell has no HVAC framework, lighting, finished walls, proper flooring, elevators, and utilities – so it is literally cold and dark as the name suggests. It is the first official bare-minimum and leasable building condition available to tenants. The cold dark shell is what we like to call a building’s rock-bottom level, as it really is the lowest possible point and can only be improved from here onwards. For this reason, you will often hear commercial audiences use terms like “bare bones” and “building skeleton” to describe such an unfinished space.

Reasons to lease

Commercial tenants who want the complete freedom to build out their leased property with custom options will choose a cold dark shell condition. Since no tenant improvements have been made so far, you have the liberty to micromanage every small detail of your build-out project. You can choose exactly what type of HVAC installations and units will be used, which high-quality finishes will be added, how many custom lights will be installed, and so on. The shell space will first be brought to a livable standard by adding the main functionality frameworks like HVAC, electricity, plumbing, doors, windows, tiles, and other mechanical elements. You can then incorporate design aspects before installing the furniture and fixtures, after which the building will be ready for occupancy.

This transformation naturally demands more time and budget, so it is something you should only consider based on your current commercial standpoint. Investing in such a tenant-oriented build-out is best for long-term leases that can give all of this hard work the time it needs to be considered worthwhile. It does not make sense to lease a cold dark shell, add all the hefty improvements, and then leave the building within a year in search of a new place. So, the longer you intend to stay (say 5 years and above), the more your investment will pay off, and the more you can enjoy your detailed customizations.

Benefits

Cold dark shells come with a range of benefits for both tenants and building owners. For tenants, there is a maximum scope for build-out customization that makes such a building type ideal for long-term occupancy – as you get a space that is tailor-built just for your business. The higher improvement costs will also convert into lower monthly rents, so this is again very promising for longer leases. Cold dark shells have more chances of securing greater tenant improvement allowances from the building owner. This is because the changes you add will stay behind even after you leave at the end of your term, so the owner now has a finished space that is more likely to be rented by someone looking for a second-generation building to occupy soon. As a result, the owner will be more inclined to fund your build-out if this will ensure consecutive leases in the future.

For building owners, leasing their commercial property in a cold dark shell condition means that they will not suffer the risk of wasted construction in case the tenant does not like the improvements. This avoids the headache of incurring demolitions to tear down the added improvements and reverse the condition back to a cold dark shell. For example, if the owner stepped up the cold dark shell by adding finished floors and walls, a potential medical tenant might ask to open them up in order to accommodate specialized, technical frameworks for clinics, which will be a huge loss and extra work on the owner’s part. Since the building already exists at a bare-minimum level, the initial construction costs will be quite low for the owner, so this is also very financially convenient. In addition, the owner can target a wider pool of office, retail, medical, recreational, and hospitality tenants because the existing space can be customized by all kinds of commercial clients. This increases the chances of finding a suitable, long-term tenant, as only serious tenants aiming to stay for many years will choose to work so hard in building out a leased space – translation: regular rents for the owner!

Major drawbacks

Such a detailed level of improvements in a cold dark shell requires a strong commitment on the tenant’s part. If for any reason, you have to relocate earlier than expected, all of your hard work in optimizing the shell condition will be wasted. This also means that you will have to plan and finance these retrofits all over again in the next building you are about to lease.

Austin Tenant Advisors

Image credits: Austin Tenant Advisors

What is a warm dark shell?

Definition

As discussed above, cold dark shells are ideal for sheer customization purposes and tend to be quite expensive, so they might not work for everyone. Warm dark shells are the next stage after a cold dark shell condition. These buildings started out as cold dark shells and are now promoted to the warm dark shell level. They alleviate some of the build-out difficulty by giving you a space that can be “heated”. The interior is equipped with some HVAC elements and the basic utilities to operate them, which crosses off HVAC functions from your build-out list. A warm dark shell will usually have a connected HVAC unit and ductwork ready to go, so while it does have the required electrical connections, the space still lacks lighting and other amenities. You are basically one step closer to moving in at this point. The building is still unfinished and needs to undergo every other improvement apart from HVAC aspects. A warm dark shell build-out will result in a white box space, which is the first completely finished look before the furniture and final touch-ups fill the gaps.

Reasons to lease

If you are not too picky about the type of HVAC units and ductwork installed for your business, you can opt for warm dark shells, as they still offer ample customization options in the rest of the build-out. Another reason to lease such a space is that it saves more time in finishing out the interior, allowing you to move in that much quicker.

If you have a medium lease duration, you might want to choose a warm dark shell over a cold one because you will no longer have to worry about leaving behind an expensive HVAC infrastructure after just a couple of years.

Benefits

Warm dark shells also offer benefits to both parties. Commercial tenants can benefit from faster move-ins, lower budgets, and fewer build-out complexities. You still have enough freedom to personalize lighting and other technical features, so you can divert your HVAC savings towards top-quality lighting, smart controls, touchless fixtures, custom décor, and other high-end amenities. By providing just one major relief in terms of HVAC, the owner is still playing it safe because every commercial tenant will require a basic HVAC framework anyway. So, there is a reduced risk of wasted construction or repetitions on the owner’s part, as there are no finished walls and flooring that might need to be torn down.

Major drawbacks

The main downside to leasing a warm dark shell is that while you do incur lower build-out costs per square foot, you will have higher rents to pay compared to cold dark shell tenants. The installed HVAC reduces your build-out costs initially because you are not paying for the HVAC components anymore. However, building owners can charge higher rents either from the beginning or eventually down the road to cover their HVAC contributions. Another drawback is that since you cannot secure higher allowances for warm shells, any exceeding costs outside the total budget will go from your pocket. This is because the lease generally holds you responsible to cover extra costs – unless negotiated differently.

Austin Tenant Advisors

Image credits: Austin Tenant Advisors

Conclusion

Shell leases have their highs and lows within the commercial real estate. It is often very confusing to tell exactly what the given shell type is, as everyone assumes a different meaning for shell spaces. Make sure to always confirm the condition in which your leased building will be delivered to you for the build-out, and this should be mentioned clearly on the lease. Otherwise, you will miss potential benefits like higher allowance scopes, greater customization freedom, and quick move-in times. In the cold vs warm dark shell comparison above, we saw how stepping up one level from the bare minimum can make a world of difference. Just by including HVAC, a warm dark shell can turn the dynamics in unexpected ways like increasing your rent or adding top-notch lighting systems.

It helps to get in touch with professional and licensed commercial contractors who know how to make the best out of a given space. Carefully planned tenant improvements benefit both tenants and building owners, so it is important to find that win-win middle ground. Tenant improvements add value to the commercial property; therefore, it really is your commercial business that brings the building out of its shell!

Microsoft Project Construction Schedule

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Image credits: Microsoft

Microsoft Project is one of the most highly-used construction software applications. It makes a resourceful project management platform that construction experts rely on for budgeting, scheduling, and project tracking purposes. The platform helps you manage multiple projects with either built-in templates or custom schedules that you can create by yourself. A well-executed Microsoft Project construction schedule captures your entire project between rows and columns – allowing you to view the breakdown as a list, a Gantt chart, a timeline, and a visual roadmap. Here are some key insights into how MS Project benefits the construction teams – including a few schedule and template examples for construction projects.

Microsoft Project in the world of construction

Its purpose

MS Project is an ideal construction management tool used to create schedules, budgets, plans, resource lists, and other reports. It helps construction professionals like project managers, contractors, and architects monitor progress for each construction phase and keep an eye on important aspects like milestone deadlines. Apart from scheduling, the software also facilitates cost and resource management. So, it is a versatile platform that brings all your construction management areas under one roof. Using MS Project, you can create a schedule that expands from pre-construction stages all the way to the final close-out.

This lets you set durations for each stage, identify overlapping milestones, allocate stakeholders, and mark a finish line for the project.

Its features

You can create a Microsoft Project construction schedule using features like project calendars, built-in templates, visual Roadmaps, Gantt charts, and Kanban boards. The platform also supports SharePoint integrations for team collaborations. You can display schedules in different visual layouts such as Timeline View and Grid View to look at the details from a different perspective. The software helps you customize schedules, use filters, and update entries to streamline data access and progress tracking.

Its benefits

MS Project comes with a range of benefits that make it the top choice for construction scheduling, such as:

  • Interface familiarity. MS project’s interface matches other Microsoft apps like Word and Excel, so the initial learning curve flattens considerably for construction employees.
  • Collaborative potential. SharePoint integrations with MS Project enable a co-authoring environment in which team members can collaborate over a construction schedule and make changes to it in real-time. You can also connect to MS Teams to combine Project’s scheduling features with real-time communications by sharing files, reporting, and chatting.
  • Automation. You can automate your scheduling, reporting, budgeting, and tracking needs for each file.
  • Better features than MS Excel. As discussed above, MS Project offers a whole spectrum of schedule-ready features like automatic Gantt charts, construction-based templates, portfolio management, team collaborations, and timelines. While Excel is another popular scheduling tool under the Microsoft umbrella, it lacks most of these time-saving features offered by Project. The built-in capabilities of Project make it more suitable for construction scheduling, whereas Excel requires more guesswork and improvisation.

Image credits: Microsoft

Steps to create a Microsoft Project construction schedule

1. Launch a schedule project

To create a construction schedule, you can either pick an existing construction-based template or begin a blank project from scratch. You can also download readymade templates available online (from reliable sources), and open these files to customize your schedule. It saves time to work with templates instead of designing everything on your own, especially if you are not sure which technical MS Project tools you should use – or how to break down construction activities without missing any stage.

2. Add construction tasks and durations

If you are starting a blank schedule project, you can add construction tasks one by one. If you are using a template, you just have to update the given entries to match your construction project. You can then set durations for each stage in terms of its start and end dates.

The schedule should also include the required stakeholders for each task, so you can allocate contractors, subcontractors, inspectors, roofers, HVAC installers, and other experts accordingly. MS Project also enables Excel imports, which lets you conveniently import relevant data instead of typing everything one by one. After you have added all the tasks, you can choose to inactivate certain tasks instead of permanently deleting them so that you will still be able to access them if needed.

3. Organize your schedule

MS Project lets you organize your created schedule so that you can break down tasks more efficiently. For example, you can link related construction activities, split milestones, view task dependencies, mark completed tasks, and so on. The Timeline view allows you to simply drag task connectors/bars to indicate the start and end points. With the Kanban board view, you can organize your schedule as cards if you do not want a tabulated result. Finally, the Roadmap feature can be used to display connected projects in a portfolio, giving you a visual dashboard that indicates the current status for each project, as shown below.

Image credits: Microsoft

4. Create a construction calendar

With a mostly finished and organized Microsoft Project construction schedule by this point, you can go a step ahead and create calendars to mark important dates.

A calendar will simply give you a quick view of start and end dates, milestone deadlines, holidays, etc. depending on your specific construction project. You can also type key tasks to be performed on specific days. Instead of scanning through a detailed schedule, you can easily pick important dates from a calendar and refer back to the schedule for tracking – so both a schedule and a calendar go hand in hand.

5. Publish your construction schedule

Finally, you can now save all your changes before publishing the schedule for the first time. This can be done both as a native file like PDF and an online, cloud-based file that your teams can access and update.

Examples of Microsoft Project construction schedules

Construction schedules differ between project types, as the size and details of your specific project will decide how simple or comprehensive your schedule will be. The following schedules are good examples from different sources to represent what a construction schedule can look like.

According to Ten Six Consulting, MS Project makes it easy to add milestones to your construction schedule. Milestones are crucial elements for any schedule because they indicate major events along the timeline. They can be used to identify key dates and indicate progress and completion. On MS Project, each milestone event is located at the top of the schedule with a tiny black diamond indicator. You can only see this if your schedule is displayed in a Work Plan view. You can also filter the schedule to show only milestone tasks throughout your construction project. In the following image, End Construction and Project Complete are two milestone events.

Ten Six Consulting screenshot

Image credits: Ten Six Consulting

MS Project can be used to create full-scale construction schedules that include everything from project contracts, blueprints, and permits to material procurement, site preparation, construction, and client walkthrough. Each stage is accompanied by its respective subtasks so that you do not miss any important process from the final timeline. With an easy-to-use interface and maximum compatibilities, you can focus on building a construction schedule that is actually usable, shareable, and editable by all stakeholders. Apart from integrations like SharePoint and MS Teams, it is also possible to upgrade to the web solutions for MS Project. This will help you and your teams synchronize schedules more productively.

Microsoft CORE Construction screenshot

Image credits: Microsoft CORE Construction

According to EPM Partners, MS Project tools can be used to alter task durations without affecting the %Work Complete columns. You can also choose which stakeholders will work for each task duration – indicating how long each stakeholder will be expected to work on that specific task.

Image credits: EPM Partners

You can update your whole project to reschedule it based on new dates and durations. This is done by simply clicking on “Update Project” and entering the new reschedule date for incomplete tasks. So, all Microsoft Project construction schedules can be updated accordingly without disrupting the rest of the project tasks.

EPM Partners

Image credits: EPM Partners

Templates for Microsoft Project construction schedules

MS Project already has a library of built-in construction schedule templates that you can use. However, if you are looking for more optimized templates with integrated functionalities, you can download various templates available online from reliable websites. It can be difficult to find efficient and trade-specific templates for free, as most free templates are pretty basic and straightforward. So, you might need to purchase purpose-built construction schedule templates that have all the required features you need.

Construction Scheduling by BuildWare.net, LLC is one example. The company provides a host of construction-based scheduling templates for residential, commercial, industrial, contractor-specific, and general projects – all at different prices. You can save valuable scheduling time by removing guesswork using applicable templates that are already equipped with the right functions, chart settings, displays, task dependencies, automation, and so on. Most of the main schedule inputs are taken care of by anticipating the requirements of a construction expert, so each template is ready to use and update. If needed, you can also buy the given schedule companion guides to access step-by-step instructions on how to make the best out of your chosen templates.

Conclusion

For beginners, the MS interface might be the only thing they are familiar with, as the learning curve for the actual scheduling process can be tough to climb. This is where YouTube tutorials and custom templates come in handy. They will help you bridge some major gaps in the way you use the platform and work with more complex features. Quite often, construction companies offer Microsoft training to address platform difficulties among workers. Based on the construction schedule examples discussed in this article, it is clear that MS Project is a one-stop tool for scheduling and management tasks that apply to both jobsites and offices. So, make sure to first learn the ropes as best as you can to be able to connect your construction dots more confidently.

Interior Design Fit Out

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Image credits: The Fit Out Company

Fit out projects are carried out in new commercial buildings that are about to be leased by tenants. They transform a mostly unfinished building into an optimized, move-in-ready space that is configured just for your business. A good fit out plan takes your leased building from its shell condition – which is the standard starting point – to a high-functioning space that represents your brand. This includes both technical and interior design elements that add potential, value, and creativity to the existing area. It is the perfect opportunity to build a commercial environment that is ready to host your current operations AND is fluid enough to move with changes. In this article, we will talk about different aspects of interior design fit out projects that help businesses come out of their shells and meet the commercial world.

What is an interior design fit out?

The term “interior design” refers to all the creative and decorative elements that form the brand aesthetics for a commercial building and make it more inviting to employees and visitors. They set the tone for a building’s first impression on others, so this is all about how visually inspiring your space will be. A good interior design enhances the look and feel of any building such as an office space, a retail store, a café, or a library.

Environments have a lasting impact on people who inhabit them for most of the time. This is why interior designs are so important, as they influence motivation and creativity within individuals, apart from giving your brand a dynamic standpoint. The human-to-environment interaction forms the core of a well-executed interior design, focusing on vibrant color palettes, unique themes, and meaningful spaces.

Coming to fit outs, these projects add upon the building shell to combine functionality with interior design aspects and create a fully optimized space – ready for tenant occupancy. An interior design fit out is all about the interior improvements you want to make to your leased space. It is your best opportunity to define your brand image and finalize what your commercial space will look like. All fit out projects convert an empty interior into move-in-ready premises, so various structural, electrical, mechanical, and technological areas are covered before going to the décor stage. These projects allow businesses to focus on building a creative workplace AND an inspired workforce – so this is very thoughtful in terms of anticipating what kind of environment your employees will be happy to work in.

Lindner Group works

Image credits: Lindner Group

How does it work?

An interior design fit out does not just create a functional and welcoming atmosphere for your business. It also ensures the safety of people and your commercial structure with various considerations like energy-efficient lighting, anti-slip flooring, and code-compliant designs.

Such a project works in the following general order depending on your specifications as a tenant.

1. Project planning

Your interior design fit out team will include architects, engineers, contractors, inspectors, and of course, interior designers. The planning stage will be all about collaborations on layouts, budgets, schedules, code compliance, project durations, and customization scopes. Since interior designs are very tenant-specific, you need to brainstorm different, unique, and clever ways of making your brand stand out. Your hired team will evaluate the leased space and plan the fit out process in terms of material procurement, available labor, estimated timelines, and so on. The experts will then help you understand how the existing condition of the building can be improved, whether or not it is suitable for your business, and which of the proposed designs meet the codes.

2. Concept and design

With initial plans at hand, your fit out team can move to sketches, drawings, 3D renderings, and other illustrations for your project. This is when the initial ideas in your mind get a proper roadmap to follow, and you get to see how your commercial dream appears on paper and screen for the first time. During the concept and design stage, you will typically build your brand image by choosing corporate colors, design themes, and custom lighting. Brand aesthetics using these features will make your business recognizable to its customers and visitors. So, a good fit out project helps your business establish both commercial and social media footprints.

Your proposed plans will be refined with functionality aspects to check whether or not they are feasible for execution. This is also the perfect opportunity to create a concept that looks well into the future in terms of a growing business, allowing you to design an adaptive workplace. The final concepts will be approved at this point, which means that your interior design fit out gets an official thumbs-up and is ready to begin. All materials, finishes, lighting, paintwork, carpeting, flooring, etc. should always stick to these approved concepts to ensure safety compliance.

3. Documentation

Now that your interior design fit out has moved past the planning and design stages, it is time to tackle important paperwork. This includes all construction documents that will be used during your fit out project – such as site plans, permits, schedules, cost estimations, and project contracts.

Once approved, you will finally have all the legal and design documentation covered to back your fit out. This is a crucial stage because your interior design must pass safety checks for fire alarms, sprinklers, ventilation, employee safety, workplace security, and other aspects to prevent lawsuit setbacks down the road. By the end of the documentation stage, you will have printed evidence that recognizes and approves your project in terms of all the acceptable changes you can add.

4. Fit out

The fit out stage is when the main construction work will begin on your leased property, guided by all the paperwork gathered so far. This is also the perfect starting point for time-lapse photography if you want to document the process for before-and-after results. It will be something special to include on your “About Us” webpage and possibly add in a future Instagram story as a throwback-to moment while celebrating your success!

The actual fit out work depends on the building condition in which the space was delivered to you. So, if you are starting out with a shell-and-core building, the fit out will include bringing it to a usable level by adding electricity, plumbing, lighting, HVAC, etc. Ceiling installation is another important feature, as it supports both structural and design aspects like lighting fixtures, sprinklers, and acoustics. Shell-and-core leasing is more suitable for a business that requires maximum customization right from the beginning, so such a space lets you get down to various technical and functional details that will support your design elements.

From a shell-and-core condition, you will be planning a Category A (Cat A) fit out to improve the building from its bare-minimum level to a fully functional level with all the key amenities like lighting and HVAC. The next stage is a Category B (Cat B) fit out that takes care of interior design elements like finishes and aesthetics, after which your leased space will be ready to occupy following the results of a final inspection. While Cat A builds a blank canvas, Cat B paints your brand image.

5. Certificates of completion and occupancy

At the end of the fit out construction and building inspection, you will be allowed to bring in all furniture, fixtures, and equipment (FF&E). It is better to transfer your FF&E items only when the inspection is fully successful. Otherwise, you will have to remove them to let the fit out team perform revisions until they are approved.

With completed and successful inspections, you will receive various certificates or closing documents to confirm that the fit out has reached its finish line. The certificate of completion and the certificate of occupancy will be two of the last documents for your interior design fit out. A completion certificate verifies that your fit out is code-compliant and all the changes meet applicable building laws, whereas an occupancy certificate identifies you as the tenant who will occupy the building, so both mark the end of a long fit out journey. Once you obtain them, you can move into your improved premises and begin working.

Interior design fit out for offices

Office tenants will generally update the leased space to add meeting rooms, workstations, breakrooms/kitchenettes, and custom amenities like touchless fixtures. Office design trends are all about open and collaborative workspaces these days, so business owners come up with new ways to diversify their creative potential. As a tenant, you should aim for an office space that encourages teams to think outside the box rather than be trapped in one – which is why open layouts work so well! When planned with wall-length windows, open spaces also introduce more sunlight into the main work area. There is nothing like having corporate brainstorming soak up the sunshine vitamin for growth!

Formaspace project

Image credits: Formaspace

Interior design fit out for restaurants and cafes

For commercial buildings like restaurants and cafes, the interior design is the first key detail to be noticed by customers. An eye-catching décor is as important as the quality of food or beverage a restaurant serves, as this gives customers a comfortable dining experience that they will remember – and the food will bring them back for more visits! An interior design fit out project for both restaurants and cafes will focus on foot traffic, creative dining areas, design themes, energy-efficient lighting options, flooring, walls, ceiling types, window styles, etc. Restaurants should also plan their décor aspects based on the types of cuisines they offer to keep the vibe more authentic. With more scope for al fresco dining, the fit out process can be customized to extend key interior aesthetics like lighting and branding to the outer area. This will build an overall cohesive décor inspired by the main interior design, so the fit out should be tailored accordingly.

Nathan Kirkman via Architectural Digest

Image credits: Nathan Kirkman via Architectural Digest

Interior design fit out for retail stores

The retail landscape also has no room for excuses, and a good interior design is a top priority for business owners. Like restaurants and cafes, retail stores are customer-driven and rely on creative interiors for the business to thrive. A well-organized interior design fit out will help you ensure memorable in-store experiences for customers, and it is the best way to give your brand its retail spotlight.

The fit out should result in a space that appears to be handpicked just for your retail business, so this has everything to do with branding purposes. You might want to add suitable signage, ambient lighting, generous aisle layouts, creative displays, storage options, changing rooms, and so on. Foot traffic is important for any retail design, and space optimization plays a huge role in successful retail projects. Adequate lighting is crucial as well, as you require a well-lit interior for your store to showcase your products better. To bring some design variety into your store, you can have a mix of different lighting styles and color palettes for just the right visuals. In terms of growth, businesses often choose prefab modular structures for areas like store displays and changing rooms. This allows them to easily update specific areas of their stores to accommodate retail evolutions down the road – without paying for expensive store remodeling.

Humbert & Poyet lobby project

Image credits: Humbert & Poyet

From blueprint to blue ribbon

Offices, restaurants, cafes, and retail stores have immense potential and demand for imaginative and Instagram-worthy interiors. By anticipating employee and customer requirements, you can plan a fit out that is better equipped to meet their standards. For office fit outs, make sure to keep your employees’ needs at the frontline of your project because they are the ones who will spend the most time working in the improved space. Hiring an experienced interior design fit out team is important to build the right commercial space for your business. Fit out specialists will not just transform a building shell into an optimized, tenant-ready location.

They will also help you futureproof your building, which is a smart precaution if you have a long lease and intend to adapt your business up ahead. So, always consider project fluidity over permanence. A good fit out structure should make it easy to move from the planning stage through to the Grand Opening, keeping your project fluid enough to go with the commercial flow.