New Facility Build-Out Guide
New facility budgets combine construction cost per square foot, any tenant-improvement allowance, commissioning, and restoration of a prior lease.
Facility build-out cost drivers
- Build-out/construction: $100 – $400/sqft (region adjusted).
- Tenant-improvement allowance: $20 – $60/sqft (often offsets cost).
- Commissioning: 1–3% of build-out.
Don't forget
- Prior-lease restoration at the old site (a multiple of the old move cost).
- Equipment, machinery, and financing are separate from build-out.
- Commissioning verifies systems before occupancy — budget it as a percentage, not an afterthought.
Tax treatment
Ordinary and necessary business moving/relocation costs (office moves, employee relocation as a business expense, rigging) are generally deductible as business expenses. Relocation benefits provided to employees are taxable wages to them but deductible to the employer as compensation. Not tax advice.
Tangible personal property used in business — machinery, equipment, office furniture/fixtures, certain computer equipment — may be expensed under IRC §179 subject to annual limits; bonus depreciation may also apply. Not tax advice.
Build-out (construction, TI, commissioning) is distinct from the move itself and from equipment. Keep them as separate line items so a single overage doesn't mask the others.
whrg.com, www.crowell.com, www.kpmg.com, www.calt.iastate.edu, www.congress.gov, www.irs.gov, finance.yahoo.com, jilaniplace.com, www.vectorinstallations.com, www.vectorinstallations.com, ocnjdaily.com, agmoving.com, lincolnmoving.com, www.dir.ca.gov, sam.gov, www.fmcsa.dot.gov, www.bls.gov, www.worldwideerc.org, www.atlasvanlines.com, www.cbre.com, www.irs.gov. Figures are model benchmarks, not quotes. ReloFig never sells your information.