The composition of office build-out costs

Hard construction costs account for roughly 68 percent of total project costs, with the primary cost drivers being mechanical and electrical systems, drywall, and ceilings. Understanding these drivers early in the planning process is critical for clients to make effective budget decisions.

A considerable amount of savings can be identified before design begins, through tactics such as aligning scope with lease provisions, negotiating turnover conditions, and evaluating infrastructure requirements upfront.

While overall cost escalation is expected to remain within historic norms, volatility in specialty trades and imported materials is likely to persist. Developers and occupiers should anticipate continued pressure on mechanical and electrical costs, driven by data center demand and tariff uncertainty. Early engagement with project management teams will be essential to mitigate risk and capture savings opportunities.