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What Are Comparative Costs to Build Out Office Space Today?

Construction costs rose 3% through 2017 and are expected to follow suit heading into 2018 and beyond, predicts JLL in its 2018 Office Fit Out Guide. Office leasing fundamentals are pivoting as new construction deliveries begin to outpace leasing demand, according to research by the firm, which also showed tenant improvement allowances in new and existing assets spiked, in an effort to compete for occupiers.

Set against the backdrop of rising materials costs (up 3% y-o-y) and construction labor rates (up 3.4% y-o-y), JLL’s guide helps companies better understand and adjust to a dynamic workforce and shifting office needs. This research provides a comparison and transparency of buildout costs across U.S. and Canadian markets. JLL advises it is not for cost estimating or cost of occupancy purposes.

Researchers examined 2,800 project budgets across 59 local markets and 17 industries covering more than 100 clients. The resulting matrix compared three types of space quality and complexity (base, medium and high) as well as three levels of office style from progressive, moderate and traditional. The findings included:

– Progressive Base $120.18
– Progressive Medium: $152.23
– Progressive High: $186.28

– Moderate Base: $124.98
– Moderate Medium: $158.23
– Moderate High: $193.48

– Traditional Base: $140.05
– Traditional Medium: $177.06
– Traditional High: $216.07

Top markets by % premium over U.S. average were:
1. New York City (28.5%)
2. San Francisco (22.6%)
3. Chicago (16.3%)
4. New Jersey (12.9%)
5. Boston (12.1%)

Top markets by % premium under the U.S. average were:
1. West Palm Beach (-15.9%)
2. Austin (-15.3%)
3. Miami (-15.2%)
4. Jacksonville (-15.1%)
5. Fort Lauderdale (-15%)

Read more at JLL Research

Connect With Connect with JLL’s Todd Burns


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About Dennis Kaiser

Dennis Kaiser is Vice President of Content and Public Relations for Connect Commercial Real Estate. Dennis is a communications leader with more than 30 years of experience including as a journalist and in corporate and agency integrated marketing communications roles. He is responsible for Connect’s client content operations and public relations strategy. He is involved in a range of initiatives ranging from content strategy, message development, copywriting, Social Media and content marketing services. Dennis’s communications background in the real estate industry includes working with many of the top real estate firms – from brokerage companies, developers, homebuilders, investors, owners, lawyers, asset advisors, lenders, architects and property management firms. • Marketed more than 1 Billion Square Feet of Office Space • 70,000 Multifamily/Condo Units • 15,000 Single Family Homes • 30 Million Square Feet of Retail Space • Representing Roughly $100 Billion in Investment In his most recent corporate communications roles, he led a regional public relations effort across Southern California for CBRE, played a key marketing role on JLL’s national retail team, and was responsible for directing the global public relations effort at ValleyCrest, the nation’s largest commercial landscape services company. Dennis’s agency background on integrated communications teams at many reputable agencies and has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. He formerly was President of the Public Relations Society of America’s Los Angeles of public relations professional, and served on the Board of Directors. He also taught a public relations extension course at Loyola Marymount University. Dennis’s has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements.

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