Office construction costs highest in New York City, San Francisco, says CBRE

A CBRE report found that New York’s construction costs are more than $500 per sf. San Francisco isn’t too far behind.

October 28, 2015 |

New office space core and shell construction costs are highest in the two coastal cities.

Many things—from a cup of coffee to tickets to a ballgame to a month’s rent—are expensive in New York City and San Francisco.

Add construction costs to the list. A report from the CBRE's Valuation & Advisory Services found that new office space core and shell construction costs are highest in the two coastal cities.

In New York, new office construction costs between $500 and $550 per sf, as of Q3 2015, the highest amount of the cities studied. San Francisco was second, with costs between $350 and $400 per sf.

Boston ($280 to $320 per sf), Seattle ($250-$300), Chicago ($240-$290), and Houston ($220-$270) finished the list.

“These numbers are for prices associated with the direct hard construction costs, and the ranges do not include acquisition costs or indirect soft costs,” said Robert Barone, of CBRE’s Valuation & Advisory Services, in a statement. “Indirect soft costs, which include costs for things such as architect/engineering fees, legal, administration, marketing, financing, FF&E and tenant improvements, can represent an additional 30% to 40% of the direct hard costs ranges.”

In addition, New York ($70.54 per sf, per annum, as of Q3) and San Francisco ($67.33) had the highest asking rents for offices, too.

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