Commercial Construction Markup?

ibuildit

I have recently been given the opportunity to bid on a couple of strip mall building shells. I have done commercial tenant finishes, and built my own two story office building. I am bidding against some heavy hitters and I have know idea what the industry standard for the mark-up of these buildings should be. One of the buildings is about 10k sq ft and the other right next to it is about 8k sq ft. they are both rectangular in shape. I would be interested in hearing some of your opinions on what you charge for mark-up and for general conditions like overhead. Thanks!

Bob Kovacs

Well, in most commercial work, your bid goes together like this:

- Cost of direct work- self-performed and subs- $200,000
- General Conditions (Only you can figure what those cost)- $40,000
- General Liability Insurance- $ 5,000
- Contractor's Fee (Usually +/- 5% on a job that size)- $12,250
- Total Bid $257,250

So, you get a whopping 5% fee to cover office overhead and your profit, and you need to cover all of your supervision and other job-related expenses in your general conditions cost. On little 5-10,000 sf jobs, most companies that self-perform work will just use a carpenter foreman as their super, so they don't really have any "supervision" cost to speak of. If you're subbing 100%, you're going to be at a disadvantage since you'll need to have at least a part-time babysitter on the site.

mikesewell

See, if you are willing to work hard enough, you could end up making even more off of the job than your insurance agent does.

Cool...

Best regards,
Michael

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Commercial construction

Sewell Construction

RPortinga

it's cut-throat out there right now... we bid a building, just under 12000SF. There were 9 generals on the list, the top 5 were withing 1% of each other.

We went in with 4.9% markup and were in that top 5.

Six years ago, we could do 7-8% markup and be competitive, on tenant build outs as much as 12%.

It is getting to the point where you MUST self-perform a chunk of the work in order to make it.

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Rob Portinga - Bauer Bros. Construction, Inc.
Design/Build - General Contractor - Construction Management