Commercial construction budgeting involves more than just crunching numbers. Strategic planning is about making sure your project stays on schedule, within scope, and aligned with long-term goals.

Understanding every aspect of your construction budget is essential in Texas, where costs, regulations, and timelines vary greatly by region. This guide walks you through the steps, cost categories, and best practices for creating a realistic, execution-ready budget for your next commercial construction project.

Construction Cost Per Square Foot in Texas

Before anything else, you need an estimate of the construction cost per square foot. In Texas, this varies depending on location, building type, and materials. Therefore, setting a realistic range early helps define your project scope.

Current Cost Ranges in Texas

– Basic Retail or Warehouse Shell: $85 to $130 per square foot.

– Office or Medical Buildings: $160 to $250 per square foot.

– High-End Buildouts: $250 per square foot and up.

These ranges are influenced by supply chain volatility, labor availability, and region-specific trends. A contractor like NC Sturgeon can help tailor your budget to the West Texas market and your building type.

How to Budget for Commercial Construction Projects Around Midland, TX

Midland, Texas, is one of the fastest-growing commercial hubs in West Texas. From industrial parks to medical facilities, the cost variables in Midland differ from those in larger metros. Developers in the area should pay close attention to labor rates, site access, and material delivery windows, which can impact construction cost per square foot and project timelines.

Commercial Construction Budgeting Process

A comprehensive commercial construction budgeting process should include fixed and variable costs across preconstruction, construction, and closeout phases.

Core Budgeting Phases

1. Preliminary Budget: Developed during conceptual design and based on historical data and cost per square foot benchmarks.

2. Design Development Budget: Includes input from engineers, architects, and preconstruction teams.

3. Construction Budget: Finalized after permitting and includes hard bids and subcontractor pricing.

NC Sturgeon’s design-build approach guarantees that budgets are accurately updated at every phase, reducing guesswork and preventing costly delays.

Prioritize Pre-Construction Planning to Set Your Budget Up for Success

Substantial budgets start with solid plans. Pre-construction planning lays the groundwork for everything from site analysis to scheduling and scope development. It is where decisions made on paper save you thousands during construction.

This early phase often includes:

– Site feasibility analysis to assess soil, topography, and utility access.

– Preliminary programming to define building use, size, and layout.

– Conceptual design coordination between architects, engineers, and builders.

– Early cost modeling is based on project goals and known constraints.

In Texas, pre-construction planning can also help you through the local permitting processes, utility coordination, and AHJ (Authority Having Jurisdiction) reviews that vary by city or county.

Engaging a design-build contractor like NC Sturgeon that provides preconstruction insights is fully integrated into your budgeting process. This alignment between design, cost, and constructability helps prevent costly surprises later.

Understand Hard Costs vs Soft Costs in Construction

Both cost categories are essential to plan for, yet many developers overlook how quickly soft costs can accumulate.

Hard Costs (Physical Construction Costs)

These include all the materials and labor necessary to build your facility:

– Sitework and excavation.

– Building materials.

– Labor and equipment.

– MEP systems (mechanical, electrical, plumbing).

Soft Costs (Permits and Administrative Fees)

Soft costs can make up 15 to 30 percent of a budget, depending on the project:

– Architectural and engineering fees

– Permits and inspection fees.

– Legal, insurance, and financing costs.

– Marketing and lease-up costs for commercial tenants.

A solid hard costs vs soft costs ratio in Texas typically falls around 80 to 20. However, this can vary based on the complexity of the project and the delivery method used.

Include Contingency Planning in Every Budget

Unexpected costs are a reality in any construction project, especially in dynamic regions like West Texas. A substantial budget includes contingency funds to help you absorb cost increases without pausing progress.

Plan for Long-Term Value, Not Just Initial Costs

A strong construction budget should address up-front costs, operational efficiency, lifecycle costs, and the facility’s long-term performance.

Ready to Budget Smarter for Your Texas Construction Project?

At NC Sturgeon, we have earned a trusted reputation across West Texas by helping developers, franchise owners, and commercial investors build accurate, transparent, and aligned budgets with project realities.

From planning a retail center, warehouse, or build-to-lease development, our team provides the preconstruction guidance and financial modeling support to keep your project moving forward.

Whether in the early feasibility stage or ready to lock in numbers for construction, NC Sturgeon is ready to support your commercial goals with insight and precision.

– Explore our full range of construction services

– View completed projects in Midland and West Texas

– Contact us for a preconstruction or budgeting consultation