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Cost Per Square Foot Formula:
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Cost Per Square Foot (CPSF) is a key metric used in commercial real estate and construction to evaluate the efficiency and cost-effectiveness of building projects. It represents the cost to build or purchase one square foot of commercial space.
The calculator uses the simple formula:
Where:
Explanation: This calculation divides the total project or purchase cost by the total square footage to determine the cost efficiency per unit area.
Details: CPSF is crucial for budgeting, comparing different commercial properties, evaluating construction bids, and making informed investment decisions in commercial real estate.
Tips: Enter total cost in your local currency and total square footage. Both values must be positive numbers greater than zero for accurate calculation.
Q1: What is a good CPSF for commercial buildings?
A: CPSF varies significantly by location, building type, and quality. Office buildings typically range from $150-400/ft², while retail spaces may range from $100-300/ft².
Q2: Does CPSF include land costs?
A: Typically, construction CPSF calculations exclude land costs. For purchase evaluations, CPSF usually includes both building and land value.
Q3: How does CPSF differ between new construction and renovation?
A: New construction generally has higher CPSF due to complete build-out costs, while renovations may have lower CPSF but can vary based on the extent of work required.
Q4: What factors affect CPSF in commercial buildings?
A: Location, building materials, finishes, mechanical systems, architectural complexity, and local labor costs all significantly impact CPSF.
Q5: How often should CPSF benchmarks be updated?
A: CPSF benchmarks should be reviewed quarterly as construction costs, material prices, and market conditions change frequently.