According to a CBRE Valuation and Advisory services report New York and San Francisco have the highest construction costs in the U.S. In New York office construction costs range from $500 to $550 sf and in San Fran they average $350 to $400 sf. In Houston, Tx average costs were $220 to $270 sf.
What’s crazy is that these numbers only include the hard costs, and do not even include land acquisition costs or indirect soft costs (e.g. architectural, engineering, legal, marketing, financial, FF&E, tenant improvements, etc) which combined could add another 25% to 40%. Construction costs typically follow office space rents and both of those cities are on the top of the list of highest asking rental rates with the Big Apple averaging $70.54 sf and San Fran averaging $67.33