Understanding Corporate Interior Costs: Insights from the Kirksey Report
A key component of any lease negotiation is the tenant improvement allowance provided by the landlord to build out or retrofit an office space for the tenant’s specific use.
One of the first questions every tenant has when considering either new or refurbished office space revolves around how much the office build-out or tenant improvements (T.I.) will cost. The tenant’s cost exposure is a key factor in the decision-making process and an important component in determining your projected total occupancy cost.
Projecting build-out costs beyond general ranges is challenging without the benefit of the space planning process, and there are so many building type options and lease size parameters that affect this estimate. Our friends at Kirksey Architecture provide an annual Tenant Improvement Cost Guideline.
Trends
When it comes to corporate interior office buildout, the Kirksey report indicates a mixed bag of pricing trends. While elements like lighting, ceilings, doors, and countertops saw a modest uptick in cost—around $5 per square foot—fitness amenities experienced a decrease of about $10 per square foot. Meanwhile, furniture costs remained stable, as per the report.
The Cost of Corporate Interiors
All categories reference a 25,000-nrsf floor plate with 50% offices and 50% open-plan. Construction costs only; they do not include owner-provided AV and IT equipment.
BASIC OFFICE SPACE
$77 to $91/SF ($72 to $88/sf in 2022) The most basic applicable space with landlord standards but using all new components: basic 2×4 LED lighting, standard 2×2 ceiling, plastic laminate building standard doors with mortised hardware, 18” sidelight at office fronts, minimal millwork, all plastic laminate, $35/yd carpet tile, standard electrical, and HVAC. Add up to $11/sf for first-generation space.
MID-RANGE OFFICE SPACE
$98 to $125/SF ($95 to $120/sf in 2022) Upgraded with linear LED lighting, 2×2 fineline ceiling, wood veneer building standard doors with mortised hardware, full-height glass office fronts in aluminum framing system, more extensive plastic laminate millwork with solid surface countertops throughout, $42/yd carpet tiles, more extensive electrical service with 24/7 server room AC, and two supplemental fan-coil units for conference room zones. Add up to $14/sf for first-generation space.
EXECUTIVE OFFICE SPACE
$140 to $204/SF* ($135 to $189/sf in 2022) Upgraded with some drywall ceiling areas with indirect cove lighting, architectural woodwork doors, and frames, demountable glass office fronts; 30% of wall areas as premium-grade architectural woodwork, 40% with acoustical fabric wallcovering, 30% as painted drywall; extensive wood veneer millwork with premium countertops, $47/yd carpet tile, more extensive lighting and custom fixtures for artwork and accent areas. Add up to $17/sf for first-generation space.
FURNITURE
$30 to $75/SF ($30 to $75/sf in 2022)Basic office space: $30 to $40/sf ($30 to $37/sf in 2022) Mid-range office space: $40 to $50/sf ($35 to $50/sf in 2022) Executive office space: $55 to$75/sf ($50 to $75/sf in 2022)
FITNESS FACILITY
$201 to $275/SF ($212 to $282/sf in 2022) 10,000 sf with strength and cardio areas, including rubber flooring, an exposed painted structure ceiling in workout areas, frameless glass entry doors, pendant indirect lighting, and extensive wiring for AV and TV; men’s and women’s locker rooms to have ceramic tile wet areas (four showers and two toilets each); carpeted dressing areas with plastic laminate lockers.
CONFERENCE CENTER
$198 to $297/SF ($197 to $300/sf in 2022) Similar to the executive office space description except with a ceiling system and acoustical upgrades, as well as individual fan-coil units for each room, a VIP lounge area with millwork, coffee service, and receptionist millwork.
EMPLOYEE DINING FACILITY, KITCHEN & SERVERY
$260 to $350/SF ($267 to $360/sf in 2022) 5,000-sf kitchen to have 2×4 washable surface suspended ceiling, quarry tile flooring, FRP walls, all equipment by others; servery to have drywall ceiling with indirect cove lighting, ceramic tile flooring, painted drywall; custom millwork at servery and grab-and-go station; dining to have a mix of drywall and acoustical ceilings, linear LED lighting, indirect cove, and pendant accent lighting; some low walls with architectural woodwork paneling as room dividers, ceramic tile throughout.
Click here to download the Kirksey Construction Cost Guideline as a PDF
