Two of the main elements in your office build-out budget will be the hard costs and soft costs. But what exactly does that mean? What’s the difference between the two? And how much can you expect to budget for each type?

Read Now: Cost to Build Out Office Space: How to Plan and Budget

AQUILA’s project managers have created budgets for hundreds of office build-outs and tenant improvement projects, and want to help you understand the ins and outs of the process, starting with the basics.

In this article, we will cover:

  • What a hard cost is
  • What a soft cost is
  • What you can expect to budget for both


What Are Hard Costs

Hard costs are the costs that go into the physical construction of a space, such as building walls, electrical, and plumbing. They also cover the labor that goes into the construction. Hard costs will likely make up the majority of your project costs – about 75% to 85%. These are also the most difficult to estimate without looking at the specific details of a project.

What Is Included in Hard Costs?

  • Paint and Carpet
  • Electrical
  • Mechanical
  • Plumbing
  • Drywall, Framing, and Acoustical Ceilings
  • Doors, Frames, and Hardware
  • Glazing
  • Millwork
  • Fire Alarms and Sprinklers
Hard Cost vs. Soft Cost | Construction Materials and Labor

Hard costs not only include the physical construction of a space, but also the labor that goes into it.

Hard costs can vary widely, depending on the quality of the finishes you choose and the extent of the renovations you plan to make to a space.

Read Next: 3 Tips to Keep Your Commercial Build-Out Costs on Budget


What Are Soft Costs

Unlike hard costs, soft costs are not directly related to the physical building materials and labor. Soft costs are any of the expenses and fees related to the services required to design and implement a project that are not direct construction costs. These generally account for 8% to 12% of the total project cost.

What Is Included in Soft Costs?

  • Architectural Designs
  • Engineering
  • Hiring a Permit Expeditor
  • TAS/ADA Inspections if required
  • Reimbursables (such as the cost to produce drawings, courier fees, travel, etc.)
Soft Cost vs. Hard Cost | Design Plans

Soft costs include things like architectural designs and engineering as well as any fees from permitting, inspection and reimbursables.

Soft costs can sometimes vary depending on the type of project and its complexity but, in general, these costs will be easier to estimate than hard costs.


Now that you know the difference between hard and soft costs, find out what else you should plan for in your office build-out budget. Read our blog post Cost to Build Out Office Space: How to Plan and Budget.

To learn more about building out your office space read our Ultimate Guide to Building Out Office Space.

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To start budgeting for your office build-out, download our handy, interactive Office Build-Out Budget Template.

Get your free Office Build-Out Budget Template here.

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Dustin Hogzett | Commercial Project Management in Austin, Texas | AQUILA Commercial

Dustin Hogzett

As a project manager with AQUILA, Dustin leads and manages fast-track and task-critical design and construction projects.

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