Cost drivers

Branch programing

Branches vary in their planned customer service capacity, which directly influences their spatial and operational requirements. Higher-capacity branches typically require more extensive facilities, including additional offices, teller counters, ATMs, and related infrastructure.

In parallel, the target customer base plays a critical role in defining branch programming. The location context—whether in a downtown urban center, industrial area, corporate district, university campus, or rural setting—significantly shapes the branch’s functional design, service mix, and overall layout.

Labor type

Union labor is generally more costly than open shop due to higher wages, benefits and strict work rules, especially in states with strong union presence.

The cost impact of labor type can vary by state, with some regions showing larger cost gap between union and open shop models.

Location factors

Project costs vary significantly across different geographic markets. These differences are captured through location factors. A location factor above 1 means that this portfolio is more costly to build than average and vise versa.

Design standards

Banks evolve their retail experience through a series of design generations, with each iteration introducing changes in layout, finishes, technology or branding. These design updates directly impact project scope, thus affect project costs.

Contract type

The type of contract can affect project costs through differences in risk distribution, pricing structure and management approach.

There are multiple contract types. The two main ones are lump sum contracts and GMP (Guaranteed Maximum Price) agreements.

Sustainability

Sustainability can affect project costs through the inclusion of systems such as VRF HVAC for enhanced HVAC efficiency and solar installations for renewable energy generation.

While these features increase upfront costs, they provide long-term operational savings and improved sustainability performance.

Unique scope

Unique project scope such as two-story designs, faux two-story layouts, and prior building use can significantly impact construction costs.

Two-story or faux two-story configurations often require additional structural support, circulation space, or façade treatments.

Prior use of a building can impact costs due to existing site conditions. For example, converting former restaurant or fast-food facilities often incurs higher costs compared to the conversions of former financial buildings, largely because of the presence of grease traps, kitchen infrastructure and specialized mechanical systems.

Construction technology

Emerging construction technologies such as modular construction are transforming how projects are delivered, impacting both schedule and cost.

Modular construction is a building method where sections of a structure called ‘modules’ are prefabricated offsite and transported onsite to assemble.

Modular construction generally results in a shorter project schedule, but projects costs vary by the level of modularization – whether it involves prefabricated components like façades (flat-stacked) or fully assembled building sections (volumetric).