Table of content:
- The average cost of renovating a 1200 square foot commercial space
- The average cost of a new commercial building
- Pros of Renovation
- Pros of New Construction
- Cons of Renovation
- Cons of New Construction
Deciding to expand or renovate your commercial space in Canada is a strategic choice that can impact your business’s future. Among the pivotal decisions you’ll face is whether to renovate your current property or embark on an entirely new construction project. This choice is laden with variables, including costs, benefits, and potential drawbacks. This detailed exploration will delve into the intricate considerations, advantages, and disadvantages of renovating versus constructing new commercial spaces in Canada.
Let’s begin with renovation costs. How much does it cost to renovate a typical commercial office space, and where can you find savings?
In any renovation project, you can follow a standard set of best practices that comes in the form of a commercial renovation checklist. If you follow a standardized checklist, the project will run more smoothly, quickly, and in a more cost-efficient manner.
Most office managers calculate the average cost per square foot by multiplying the length and width of the office space. Afterwards, they apply a standard cost per square foot. On average, the renovation cost per square foot falls in the range of $200. Therefore, for a 1,200 square foot office space at $200 per square foot, you can anticipate a renovation cost of approximately $240,000. Then, you need to take that number and multiply the number of offices that will be part of the renovation project to get your total cost to account for in your budget.
Now, let’s compare those renovation costs to the cost of developing a new commercial building from scratch. One of the first things you need to do is determine if you can make do with the amount of real estate you have at the existing location, or if you need more space to develop your new building.
Once you know how much space you have to work with, you can start to calculate the average construction cost per square foot to forecast the budget for the development. On average, the commercial construction costs can range from $20 to $40 per square foot.
That may seem low compared to the renovation costs you can anticipate. But remember that the renovation costs cited above are for one office space within an established building. These commercial construction costs are for the whole building. Therefore, the number will definitely add up into the high six figure. Alternatively, in all likelihood, the outcome will be a seven figure range.
1. Cost Savings
Renovations often have a more budget-friendly price tag than new construction. Utilizing the existing structure can significantly reduce foundation and core structural costs.
2. Time Efficiency
Renovation projects have shorter timelines than new construction, allowing you to resume business operations more swiftly.
3. Location Advantages
Older buildings often boast prime locations in established commercial areas, providing built-in visibility and accessibility.
Repurposing an existing building contributes to sustainability by minimizing new material usage and reducing construction waste.
With the anticipated costs on hand, you can start to analyze the other benefits of renovation vs. new construction. When it comes to renovations, they are typically less expensive than a full new development. That is, unless the building has fallen into such a sad state of disrepair that the renovation costs dwarf the cost of a brand new development.
Renovations are also much faster than new developments. Speed is a key factor, especially if the building is a commercial office space. The sooner the renovations are complete, the sooner that tenants can move in and start paying rent on the leased space.
There’s also the option to customize the look and feel of an office space with a creative renovation. You can play around with the layout or request an addition to the established space that will still be much cheaper and much faster to complete than a brand new development. Some tenants may even request a customized renovation to match their unique brand identities, which is a cost you can earn money back on through rent or using shared financing with the tenant to pay for the renovations.
Building from scratch allows you unparalleled customization. You can craft a space tailored precisely to your business needs.
2. Modern Features
New construction empowers you to incorporate cutting-edge energy-efficient technologies, contemporary amenities, and sustainable materials, potentially reducing long-term operational costs.
3. Design Flexibility
Without the limitations of pre-existing structures, you can realize innovative and distinctive designs that resonate with your brand identity.
4. Long-Term Investment
New constructions appreciate over time, providing potential returns if you sell or lease the property.
Suppose the state of an existing building has become dilapidated. So much so that construction of a new building is your best option. This actually grants you several freedoms that renovating on an existing site does not provide.
For one thing, you don’t have to remain in the same location. If environmentalism is important to you – as it has become very important in today’s world – and the site of your existing building has some toxicity issues, you could abandon the site and select a more eco-friendly environment to rebuild where you can also improve your brand reputation. You’ll have to conduct an environmental assessment of any new location you select, as well as secure the proper zoning requirements, but you can start completely fresh if you choose to do so.
Another huge benefit for starting a new building fresh is the ability to select a site that’s near public transit. This is especially valuable if your building exists in a major city where thousands of people regularly use transit. You can select a location for your building that’s transit convenient, attracting a higher quality of employee talent and also supporting the goal of being environmentally conscious. A building near transit lines means fewer people need to drive into work, thereby saving carbon emissions from flowing into the atmosphere.
1. Hidden Issues
Older structures might harbor concealed problems such as outdated electrical systems, plumbing issues, or structural deficiencies that can escalate costs during renovation.
2. Design Limitations
The constraints of existing layouts and structures can impose design limitations, making it challenging to achieve a revamped look.
3. Potential Delays
Unforeseen issues discovered during renovation can lead to delays and additional costs, disrupting your business timeline.
4. Aesthetic Constraints
While renovations can breathe fresh life into a space, certain architectural and design elements might need to be revised, constraining your creative choices.
1. Higher Costs
Constructing from scratch usually entails higher upfront costs, encompassing site preparation, foundation work, and infrastructure development.
2. Extended Timeline
New construction projects typically have more extended timelines due to the complexity of starting anew. This might impact your business’s launch schedule.
3. Site Challenges
New construction might necessitate navigating through zoning regulations, securing permits, and addressing potential environmental considerations, adding layers of complexity.
4. Location Limitations
Prime locations might be scarce for new construction projects, particularly in already saturated commercial areas.
Choosing between renovation and new construction for your Canadian commercial space ultimately hinges on your business objectives, budget constraints, and long-term vision. Renovations offer cost efficiency and quicker completion, ideal for businesses seeking a refresh. On the flip side, new construction delivers unmatched customization and contemporary features, a strong contender for those aiming for a unique identity.
Collaboration with experienced architects, contractors, and real estate professionals is indispensable for accurate cost estimates and navigating the intricacies of each option. By thoughtfully weighing the pros and cons, you can make an educated choice that sets the stage for a thriving commercial venture. Whether you choose to reimagine an old space or erect a brand-new landmark, the trajectory of your business lies within your grasp.
Looking for a commercial construction and renovation expert? We can handle it from start to finish so you can focus on the growth of the brand. Get in touch with the turnkey construction company at (905) 696-0486 or email [email protected] for more details.