{"success":true,"page":{"id":293,"slug":"commercial-real-estate-build-out-costs-by-industry-2026","title":"Commercial Build-Out Costs by Industry in 2026: Office, Retail, Restaurant & Medical","meta_description":"Commercial build-out costs by industry in 2026: tenant improvement costs per square foot for restaurant, medical office, retail, law firm, dental, and manufacturing — ranges, financing, and landlord TI allowances.","vertical_tags":["real-estate","construction","build-out","restaurant","medical","retail","dental","office","manufacturing"],"template_type":"comparison","status":"published","published_at":"2026-05-10T01:07:56.837Z","created_at":"2026-05-10T01:07:56.837Z","updated_at":"2026-07-09T08:30:24.470Z","content_data":{"faq":[{"answer":"Restaurant build-out costs in 2026 range from $180–$600 per square foot depending on concept and finish level. Full cost estimates by format: Fast casual / QSR (1,500 SF): $270,000–$420,000 all-in. Casual dining with full bar (3,000 SF): $660,000–$1,050,000. Fine dining (2,500 SF): $875,000–$1,500,000. Coffee shop (1,000 SF): $150,000–$250,000. The largest cost drivers are: (1) Commercial kitchen equipment — $40,000–$200,000 for equipment. (2) Hood and ventilation system — $25,000–$80,000. (3) Grease trap — $5,000–$25,000. (4) Plumbing (floor drains, 3-compartment sinks, dishwasher) — $15,000–$45,000. (5) HVAC for high-occupancy dining room — $25,000–$60,000. To reduce costs: Look for spaces with existing kitchen infrastructure (former restaurant locations). Negotiate maximum TI allowance — $40–$80/SF in most markets. Phase FF&E purchases — lease equipment where possible to preserve capital. The rule of thumb: Restaurant build-out should not exceed 30–40% of projected first-year sales. A restaurant projecting $1.2M in Year 1 sales should target a build-out at or below $360,000–$480,000.","question":"How much does it cost to build out a restaurant in 2026?"},{"answer":"Tenant improvement (TI) allowances for dental offices in 2026 range from $60–$150 per square foot depending on market, lease term, and landlord motivation. By market: Primary urban markets (NYC, LA, Chicago, San Francisco): $100–$150/SF TI is achievable for a 10-year lease. Secondary markets (Austin, Phoenix, Denver, Nashville): $70–$120/SF TI. Suburban strip center / medical office park: $60–$100/SF TI. Negotiation leverage points: Longer lease term = higher TI. 10-year initial term is the minimum threshold for $100+/SF TI at most landlords. Dentist credit and personal guarantee strength. A dentist with existing practice history and good personal financials commands better TI than a first-time practice owner. Market vacancy rate — in high-vacancy markets, landlords offer higher TI to fill space. Example calculation: 2,000 SF dental office at $100/SF TI = $200,000 TI allowance against a $400,000–$700,000 build-out. Gap financing options: Dental-specific lenders (Live Oak Bank, TD Bank Healthcare Practice Finance, Bank of America Practice Solutions) routinely finance the entire build-out + equipment + working capital — 100% financing for new practice de novo with no down payment is common for credentialed dentists with good personal credit.","question":"What is a typical TI allowance for a dental office in 2026?"},{"answer":"Medical office build-out budgets in 2026 depend on specialty and size: Primary care / family medicine (2,000 SF): $300,000–$500,000 for build-out. This includes 4–6 exam rooms with plumbing, waiting area, check-in, staff work area, private offices. Internal medicine / multi-specialty (4,000 SF): $700,000–$1,200,000. Additional procedure capabilities, larger nursing station, provider offices. Behavioral health / psychiatry (2,000 SF): $150,000–$280,000. No clinical plumbing needs; primarily offices, group therapy room, waiting room. Lower build-out cost is why behavioral health is among the most accessible healthcare practices to launch. Urgent care clinic (2,500–4,000 SF): $375,000–$1,000,000. X-ray room, minor procedure room, 8–12 exam rooms, high-capacity waiting. Important budget notes: (1) Medical equipment (exam tables, EKG, ultrasound, X-ray — if applicable) is typically budgeted separately from build-out: $50,000–$500,000 additional for equipment. (2) Signage, IT, and EHR setup: $20,000–$60,000 additional. (3) Contingency: Budget 15–20% contingency on top of hard construction costs — medical build-outs routinely encounter unforeseen plumbing or electrical conditions. (4) TI allowance: Negotiate $80–$150/SF TI from landlord before finalizing budget — this directly reduces your required capital outlay. For healthcare real estate intelligence, see Stack Healthcare.","question":"How much should I budget for a medical office build-out?"},{"answer":"A vanilla shell is a commercial space in base-ready condition — essentially a blank canvas for tenant build-out. Standard vanilla shell includes: Interior demising walls built and drywalled (but not finished). HVAC stubs delivered to the space (not connected to specific rooms). Electrical service delivered to the electrical panel (not distributed internally). Plumbing rough-in to restrooms (required by code). Sprinkler system installed (but not configured for space layout). Concrete slab floor (no flooring). Suspended ceiling grid installed or at minimum ceiling height adequate for build-out. What vanilla shell does NOT include: Interior walls beyond demising. Lighting beyond electrical panel. HVAC distribution (ducts, diffusers, thermostats). Plumbing beyond restrooms (any kitchen or clinical plumbing is tenant build-out). Flooring. Any finishes. The cost to build out from vanilla shell vs. \"cold dark shell\" (literally just the building structure): Cold dark shell adds $20–$60/SF in cost because basic utilities must be brought into the space from building systems — typically the landlord provides vanilla shell as the standard starting point in commercial leases. For build-out and real estate intelligence, see Stack Real Estate and Stack Construction.","question":"What is a vanilla shell in commercial real estate?"}],"intro":"Commercial build-out costs — the cost to convert raw or vanilla shell space into a functional business location — vary by a factor of 10× across industries. A law firm finishing a Class A office costs $80–$130/SF. A restaurant build-out with full commercial kitchen, ventilation, and grease traps runs $200–$450/SF. A medical office with procedure rooms, plumbing, and medical gas lines: $150–$350/SF. A dental office with operatories, cabinetry, and specialized infrastructure: $200–$450/SF. Knowing the realistic build-out cost for your industry before signing a lease is the single most important financial underwriting step in commercial real estate. Here are the 2026 benchmarks.","sections":[{"body":"Restaurant build-outs are the costliest commercial interior type on a per-square-foot basis — driven by commercial kitchen infrastructure, HVAC/ventilation requirements, grease management systems, and the high finish standards required for dining environments. 2026 restaurant build-out cost benchmarks (per square foot, fully built): Fast casual / QSR (1,200–2,500 SF): $180–$280/SF. Basic kitchen equipment, counter service layout, simple finishes. Total: $220,000–$700,000. Casual dining (2,500–4,500 SF): $220–$350/SF. Full-service kitchen, bar (if applicable), dining room finishes. Total: $550,000–$1,575,000. Fine dining (1,500–3,500 SF): $350–$600/SF. Custom millwork, premium materials, bar build-out, wine storage, chef's kitchen. Total: $525,000–$2,100,000. Coffee shop (800–1,500 SF): $150–$250/SF. Lower kitchen complexity; high counter and espresso bar cost. Total: $120,000–$375,000. The major cost drivers in restaurant build-outs: Commercial hood and ventilation system: $25,000–$80,000 (Type I hood for cooking equipment). This is often the single largest line item. Grease trap installation: $5,000–$25,000 depending on municipal requirements. Make-up air unit and HVAC: $30,000–$80,000 for a full-service restaurant HVAC system. Electrical (200–400 amp service, commercial equipment wiring): $20,000–$60,000. Plumbing (3-compartment sinks, hand sinks, floor drains, dishwasher connections): $15,000–$45,000. Walk-in cooler and freezer: $15,000–$40,000. FF&E (furniture, fixtures, equipment — ovens, fryers, reach-ins): $40,000–$200,000 (separate from construction, often treated separately). Landlord TI allowances for restaurants: $40–$80/SF is typical for well-located restaurant space in strong markets. In competitive urban markets (NYC, San Francisco, Chicago), TI allowances of $100–$150/SF for desirable restaurant concepts are available. For restaurant real estate intelligence, see Stack Restaurant.","level":2,"heading":"Restaurant Build-Out Costs: The Most Expensive Commercial Interior"}],"canonical_path":"/commercial-real-estate-build-out-costs-by-industry-2026","internal_links":{"tool_cta":{"desc":"Get industry-specific build-out cost estimates and real estate benchmarks for your business.","path":"/startup-costs","label":"Estimate Your Build-Out Costs →"},"network_sites":[{"name":"Stack Real Estate","label":"Commercial Real Estate & Build-Out Intelligence","domain":"stackrealestate.ai"},{"name":"Stack Construction","label":"Construction Cost Benchmarks & TI Intelligence","domain":"stackconstruction.ai"},{"name":"Stack Restaurant","label":"Restaurant Real Estate & Build-Out Benchmarks","domain":"stackrestaurant.ai"}],"related_pages":[{"slug":"startup-costs-by-industry-2026","title":"Startup Costs by Industry in 2026"},{"slug":"commercial-lease-costs-by-industry-2026","title":"Commercial Lease Costs by Industry in 2026"},{"slug":"insurance-costs-by-industry-2026","title":"Insurance Costs by Industry in 2026"}]}},"is_preview":true},"gated":true,"upgradeUrl":"/auth/signup.html","previewSections":1}