The construction industry comprises several sectors—residential, commercial, heavy civil, and industrial. Each is composed of a variety of skilled laborers and tradespeople, specific building codes, funding, project delivery methods, and building uses. Among the largest of these sectors is commercial construction.
In this article
What is commercial construction?
Commercial construction encompasses a wide range of buildings, from soaring high rises like One World Trade in New York to sporting arenas like Wembley Stadium in London. Projects can be privately or publicly funded or both. Compared with residential construction, which entails single- and multi-family residences, commercial construction covers a broader and more expensive range of projects that can take several months and even years to complete.
Types of commercial construction projects
Commercial construction is employed by many business sectors, including education, retail, government, finance, and technology. Yet because it’s so large and diverse, commercial construction professionals often work exclusively in a specialized area like hotel construction.
Common commercial construction projects include, but are not limited to:
- Office buildings
- Shopping malls and retail centers
- Stadiums and entertainment centers
- Religious facilities
- Government buildings
- Technology and data centers
How commercial construction projects are categorized
Generally, the scale, or size, of projects are determined by budget, schedule, workers, materials, and equipment. From there, commercial projects are grouped by three sizes: small, medium, and large. Here’s a closer look at each:
1. Small-scale projects
Small-scale projects often entail low-budget remodels—facilities undergoing conversions or structural upgrades and/or expansions. They’re typically financed by private entities, take several months to complete, and budget less than one million dollars. Common examples include a retail-to-restaurant conversion, an office space redesign, and an exterior facelift for a church.
2. Medium-scale projects
Medium-scale commercial projects, such as hotel upgrades, retail center expansions, and school remodels, usually cover one to two stories of new construction or redesign. These can be built from the ground-up, take several months to a year to complete, and have budgets of several million dollars. Public and private entities often work together when the project serves the public interest, as with schools or government buildings.
3. Large-scale projects
Large-scale commercial projects require ground-up, new construction. These typically take several years to complete and have budgets in the tens of millions of dollars. Projects range from large high-rises to new hospital wings, and because of their hefty budgets and public benefits often attract a combination of public and private financing.
Common roles and jobs in commercial construction
Commercial and large-scale projects require big budgets, long-term planning, equipment, hiring, and material needs, making project management essential. Without it, projects can go off-schedule and over budget. For this reason, project managers coordinate a project’s moving parts and keep everyone on the same page.
Commercial project management teams include estimators, schedulers, superintendents, field engineers, and project managers. Tradespeople like commercial contractors—i.e., general contractors with commercial experience and expertise—are indispensable, as are specialized contractors in trades like glass installation.
Since commercial construction is privately or publicly funded or both, there are several types of project delivery methods from which to choose. This is important when deciding how to structure a commercial project’s contract, team, and construction phases.
Project delivery methods include:
- Design build, in which the design-build team works with the owner throughout the construction process.
- Design-bid-build, in which the owner works with two teams—designers and builders—and various subcontractors bid on the project.
- The Agency Construction Management method, which contractually binds the owner and the CM Agency representing the owner during the project.
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