Commercial Build-Out Costs by Industry in 2026: Office, Retail, Restaurant & Medical

Q: How much does it cost to build out a restaurant in 2026?

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.

Q: What is a typical TI allowance for a dental office in 2026?

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.

Q: How much should I budget for a medical office build-out?

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.

Q: What is a vanilla shell in commercial real estate?

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.

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Commercial Build-Out Costs by Industry in 2026: Office, Retail, Restaurant & Medical

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.

Restaurant Build-Out Costs: The Most Expensive Commercial Interior

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.

Medical Office and Dental Build-Out Costs

Medical and dental build-outs are among the most infrastructure-intensive commercial interior types — requiring specialized plumbing, electrical, medical gas, and cabinetry that significantly exceed standard office build-out costs. Medical office build-out costs (2026 benchmarks per SF): General practice / primary care (1,500–3,000 SF): $150–$250/SF. Exam rooms with plumbing, nurses station, waiting room, staff area. Total: $225,000–$750,000. Multi-specialty medical group (3,000–8,000 SF): $175–$300/SF. Additional specialty room requirements, imaging alcoves, procedure rooms. Total: $525,000–$2,400,000. Surgery center / ASC (5,000–12,000 SF): $350–$600/SF. Operating rooms (positive pressure HVAC, sterile corridors, scrub areas), PACU, sterile processing. Total: $1,750,000–$7,200,000. Dental office build-out costs (2026 per SF): General dentistry (1,200–2,500 SF): $200–$350/SF. 4–6 operatories with dental plumbing (vacuum, air, water, spit sink drain), cabinetry, panoramic X-ray room. Total: $240,000–$875,000. Specialty dental (orthodontics, oral surgery): $250–$450/SF. More operatories, specialized equipment alcoves. Total: $300,000–$1,125,000. Dental-specific cost drivers: Dental unit plumbing per operatory: $8,000–$18,000 per chair (vacuum lines, water lines, drain, electrical). Custom operatory cabinetry: $12,000–$25,000 per operatory. Dental chair and unit (FF&E, separate from build): $15,000–$30,000 per chair. Digital X-ray and imaging infrastructure: $30,000–$80,000 for CBCT + digital sensors. Landlord TI allowances for medical/dental: Medical TI allowances are the most favorable of any commercial sector — landlords recognize the below-market turnover risk of medical tenants (average medical lease: 8–12 years; average tenant: 15–20 year occupancy). Typical medical TI: $80–$150/SF in primary markets. Some healthcare real estate specialists provide full build-outs with $0 TI in exchange for longer lease terms (10–15 year initial term). For medical real estate intelligence, see Stack Healthcare.

Office Build-Out Costs: Law Firm, Tech & Professional Services

Office build-out costs vary significantly by finish level and whether the space is existing tenant-ready or vanilla shell. Class A office build-out benchmarks (2026 per SF): Vanilla shell to law firm standard: $80–$130/SF. Private offices with glass fronts, conference rooms, reception area. Built-out Class A quality. Total for 5,000 SF: $400,000–$650,000. Vanilla shell to tech company standard: $60–$100/SF. Open plan, collaborative design, amenity areas, casual meeting spaces. Total for 5,000 SF: $300,000–$500,000. Executive suite / professional services: $100–$180/SF. High-quality finishes, private offices, formal conference rooms, reception. Management consulting firm standard: $120–$200/SF. Premium finishes, client-facing spaces, audio-visual. Law firm build-out specifics: Ceiling height: Higher ceiling preferred; most AmLaw 200 firms target 9–12 foot ceilings. Partner offices: 200–300 SF private offices (more space per attorney than technology). Conference rooms: 1 per 10 attorneys typically. IT and AV infrastructure: $15,000–$50,000 for conference room AV, partner office technology. Library/resource room: Less common in 2026 (digital research replacing physical books). Per-attorney build-out cost (law firm): $20,000–$40,000 per attorney for quality build-out. Technology company build-out specifics: Open plan density: 100–150 SF per employee (vs. 175–250 SF/employee for law firms). Server room / tech infrastructure: $20,000–$100,000 for networking, server room, UPS. Collaboration amenities: $50,000–$200,000 for café/kitchen, lounge, game room. Landlord TI allowances for office: Class A office in primary markets: $60–$100/SF TI. Secondary markets: $40–$70/SF TI. Legal and financial services tenants (longer leases, credit quality) typically receive the highest TI allowances. For real estate intelligence, see Stack Real Estate. For legal industry benchmarks, see Stack Legal.

Retail & Manufacturing Build-Out Costs

Retail build-out costs range from the minimal (a clothing boutique with light improvements) to the substantial (a luxury flagship with custom millwork and digital display infrastructure). Retail build-out cost benchmarks (2026 per SF): Clothing / apparel boutique (1,000–2,500 SF): $50–$120/SF. Fitting rooms, custom fixtures, lighting. Total: $50,000–$300,000. Specialty retail / gifts / home goods (1,500–4,000 SF): $60–$130/SF. Custom shelving, display tables, POS stations. Total: $90,000–$520,000. Jewelry or luxury goods (500–2,000 SF): $200–$500/SF. Custom display cases, security infrastructure, premium materials. Total: $100,000–$1,000,000. Fitness / gym / yoga studio (2,000–8,000 SF): $80–$180/SF. Rubber flooring, HVAC for high-occupancy, locker rooms, equipment storage. Total: $160,000–$1,440,000. Grocery / specialty food retail (3,000–10,000 SF): $150–$280/SF. Refrigeration systems, produce infrastructure, specialty meat/seafood. Total: $450,000–$2,800,000. Pet supply / specialty services (1,500–4,000 SF): $70–$140/SF. Total: $105,000–$560,000. Manufacturing and industrial build-out costs: Light manufacturing / assembly (5,000–20,000 SF): $30–$80/SF. Basic improvements to industrial shell: electrical upgrades, compressed air, restrooms, office area. Total: $150,000–$1,600,000. Food manufacturing / commercial kitchen (3,000–15,000 SF): $100–$250/SF. NSF/commercial kitchen requirements, HVAC, floor drains, 3-compartment sinks, walk-in storage. Total: $300,000–$3,750,000. Pharmaceutical manufacturing / cleanroom (2,000–10,000 SF): $500–$2,000+/SF. HVAC for ISO classification, HVAC redundancy, specialized flooring, sterile design. Total: $1,000,000–$20,000,000+. Landlord TI for retail: $25–$60/SF for standard retail. Anchor tenants and grocery users: $80–$150/SF. Landlords often provide higher TI to credit tenants on 10+ year leases. For real estate intelligence, see Stack Real Estate and Stack Construction.

Build-Out Cost Summary & Financing Strategies

Commercial build-out cost summary — 2026 benchmarks per square foot (fully built): Restaurant (full-service): $220–$350/SF. Fine dining: $350–$600/SF. Dental office (4–6 operatories): $200–$350/SF. Medical office (general): $150–$250/SF. Surgery center (ASC): $350–$600/SF. Office (law firm, Class A): $80–$130/SF. Office (technology, open plan): $60–$100/SF. Jewelry / luxury retail: $200–$500/SF. Grocery / specialty food: $150–$280/SF. Fitness / yoga studio: $80–$180/SF. Standard specialty retail: $50–$130/SF. Light manufacturing / assembly: $30–$80/SF. Food manufacturing: $100–$250/SF. Financing build-out costs: SBA 7(a) loans: Used for build-out + equipment + working capital up to $5M. 10-year terms for build-out. Best for businesses with less than 2 years of operating history. SBA 504 loans: 25-year fixed rate for real estate purchase and major build-outs (commercial condos). Down payment: 10% (25% if startup). SBA loans specifically for construction financed via 504 requires both project and operating company components. Equipment leasing (for FF&E separate from build): 60–84 month terms for restaurant and dental equipment. 80–100% advance rates. Healthcare specialty lenders: For medical and dental build-outs — healthcare-specific lenders (Live Oak Bank, TD Bank Healthcare, Bank of America Practice Solutions) offer 100% financing including build-out and equipment. Landlord TI as financing: Most valuable build-out capital available — TI allowances are effectively interest-free loans (repaid via lease rent). Maximizing TI negotiation is often more valuable than any other financing decision. Tenants with credit quality and long lease terms negotiate the best TI packages. For real estate and build-out financing intelligence, see Stack Real Estate and Stack Finance.

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Commercial Build-Out Costs by Industry in 2026: Office, Retail, Restaurant & Medical

Restaurant Build-Out Costs: The Most Expensive Commercial Interior

Medical Office and Dental Build-Out Costs

Office Build-Out Costs: Law Firm, Tech & Professional Services

Retail & Manufacturing Build-Out Costs

Build-Out Cost Summary & Financing Strategies

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