Embracing the hybrid workforce
Insight
28 May 2024
2024 U.S. and Canada Design Trends and Cost Guide
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A shift towards human-led design is revolutionizing workplaces, placing a strong emphasis on the creation of spaces that facilitate seamless remote and on-site collaboration while promoting focused work. However, the transition to hybrid work environments introduces new design and cost factors that continually evolve as best practices develop.
JLL's Design Trends and Cost Guide provides essential benchmark costs for office fit-outs in major markets across the U.S. and Canada. Our data is derived from a comprehensive analysis of thousands of construction projects supervised by JLL's Project and Development Services (PDS) teams throughout North America and cutting-edge creations from JLL Design Solutions.
How are changing design trends shaping costs this year?
1. What exactly is an office fit-out?
An office fit-out includes designing, constructing and furnishing the physical workplace. Office fit-outs can range widely in scope based on tenant needs and geography. For this guide, we assume a baseline of a second-generation space that is provided by the landlord as a warm lit shell that is in a condition ready for tenant improvements. An office fit-out can also be called a fit-up, build-out or tenant improvement.
2. Do these benchmark costs apply to any type of office space and office building?
The cost benchmarks in this report are designed to apply to office fit-outs in Class A buildings in each market. The specific quality of buildings varies by market, as a Class A building will be different in a gateway market compared to a secondary market. The costs provided here are based on a 20,000-square-foot office and will generally apply for an office in that range, acknowledging that economies of scale may be gained or lost as size increases or decreases, respectively. However, for in large HQ offices, note that our benchmarks do not include the type of features commonly found therein, like auditoriums, large cafeterias, etc. All national averages listed in this report are based on the medium quality and complexity and moderate style definitions.
3. I know of example fit-out projects that were either considerably cheaper or considerably more expensive than the costs listed in this guide. What gives?
This report is designed to represent average costs in each of the categories listed. It is very possible to build an office for much more or much less than any of the costs listed here, especially within the extremely variable FF&E and Tenant Factor categories. These cost benchmarks should not be viewed as the lowest or highest achievable numbers.
4. Can I compare the costs in this guide to previous versions of the report from past years?
No, the cost benchmarks in this report should not be used for comparison to previous versions to determine construction cost inflation. The benchmarked fit-out in this report changes each year to cover a project that reflects the design trends at that time in addition to construction conditions. Comparing to previous versions captures changes beyond what should be considered as part of inflation. The JLL Construction Outlook report includes construction cost inflation data and is suited to this purpose.
5. What kinds of costs go into the fit-out benchmarks in this report?
The fit-out costs for each market depict the average cost of building comparable office space across the country. While many aspects of an office fit-out can affect the final budget, including materials selection, existing space conditions and layout design, these costs represent a midpoint scope and factor.
6. How are the costs for FF&E and tenant factors determined, and why are they the same across all the markets in this report?
Due to the varying nature of tenant needs for FF&E and tenant factors (A/V, technology, security, moving), midpoints were determined from an analysis of the raw data. Average values were selected for each of the three categories of space quality and complexity. Those same benchmark values are kept equal across all cities and office styles. For example, all cost benchmarks for medium quality and complexity will have the same FF&E and tenant factor cost, regardless of geography and office style. If you know your standard FF&E and tenant factor costs, you are encouraged to use the data found in the appendixes and substitute your specific costs into those categories to create a more precise number for your needs.
7. Are these costs based on union or non-union labor?
The costs in this guide are not union or non-union specific. Instead, the costs represent the average cost of construction in each given market. If union labor is more common in one city, the resulting cost increase is included in the market cost numbers published in this guide. In other words, the project mix that was used to create the averages in this guide is reflective of the typical union versus non-union labor mix found in each market. If a project will require union labor in a market where union work is not the norm, or vice versa, the benchmark costs in this guide would likely need to be adjusted up or down to reflect that requirement.
8. This report includes markets in both the United States and Canada. How do you adjust for currency differences?
The benchmark costs shown throughout this report are all shown in USD, except for the Canadian appendix. The cost benchmarks in this report are based on local project data in each market, so any changes in the exchange rate would not directly change the cost benchmark in local currency in each market. However, it would change the relative affordability of Canadian cities from the perspective of U.S.-based companies and vice versa. For clarity and to avoid any discrepancies as exchange rates change, the national average benchmark costs and analysis in this report reflect U.S. markets only.
9. Are these cost benchmarks based on usable square footage (u.s.f.) or rentable square footage (r.s.f.)?
All benchmark costs in this report are listed on a cost-per-rentable-square-foot basis. This guide is intended to be most useful from the perspective of a company looking to lease and occupy their own space. When considering options of space to lease, offices sizes are generally advertised and listed in r.s.f., so this guide is designed to be easy to use without needing any conversions.