What Is Commercial Construction?

December 7, 2020

Learn What Commercial Construction Is and Why It’s an Essential Sector of the Construction Industry

The construction industry tends to fall into two significant divisions: residential and commercial construction. Residential, of course, refers to building homes, while commercial, which has seen 8% growth from 2014-2019, deals with constructing virtually everything else. In fact, it's growing so solidly that 96% of US construction contractors are confident of the commercial sector's growth. Because of the size of the projects, they often have a much more narrow profit margin, making accurate estimates vital to the project's success. But what exactly is commercial construction? How did it come about? Keep reading to learn more.

What is commercial construction?

Commercial construction is construction in the private sector. This type of construction project produces buildings and areas such as office parks, industrial spaces, and warehouses.

The history of commercial construction

Since the first stones were placed in the first foundation millennia ago, construction has been a big part of our world that separates our living spaces from the great outdoors. This advancement offered protection from the elements and wild animals. However, we can solidly trace the first commercial structures, specifically the Gobekli Temple in Turkey, back to 9000 BCE, six and a half millennia before the Great Pyramids in Egypt, 8,000 years before the Mesoamerican pyramids were built, 8,800 years before the Great Wall of China and 6,000 years before Stonehenge.

Commercial construction involving factories, offices, and centralized business formed during the Industrial Revolution, as large factories, mills, and trade centers brought together people by the hundreds. As electrical power became popular around the 1890s, a new wave of industrialization increased commercial construction significantly, along with the advent of mass-produced high-quality steel. This trend continues today, even as digital transformation again creates a revolution in how we do business.

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What are the types of projects in commercial construction?

There are eight common types of commercial construction projects we can divide the sector into, which make up the vast majority, but not all, of the involved work in the sector. These include:

  1. Retail establishments: These can include your neighborhood grocery store, restaurants, chain stores, shopping malls, shipping centers, ports, and similar locations where trade takes place.
  2. Medical facilities: Hospitals, doctor's offices, rehabilitation centers, chiropractors, dentists, eyecare professionals, and massage therapists are all part of keeping people healthy and functioning.
  3. Office structures: Often centered in city centers or areas of trade, office buildings provide a center point for companies to do business, whether that includes managing finance, making deals, or managing extra-office activities.
  4. Hotels and lodging: Because people aren't satisfied to stay in one place, hotels, cruise ships and other forms of lodging provide places to stay when one travels for business or pleasure.
  5. Institutions: Typically focused around institutions of learning, these structures can include primary and secondary schools, colleges, universities, and research institutions that focus on advanced learning.
  6. Industrial facilities: Factories, assembly plants, and processing plants all fall under this category, developing products for sale to an end-user, manufacturing these products, and packaging them for sale.
  7. Sports structures: Whether this is individual recreation in the form of parks with their related structures or huge professional sports stadiums, these structures all have unique features to consider.
  8. Infrastructure: To get between all of these different types of construction and to keep our society functional, infrastructure in the form of roads, utilities, airports, and train stations keep us going.

How are commercial construction estimates developed?

Unlike residential construction, commercial construction estimates can require a much more significant level of expertise. For example, there are formulas to include travel time when working on a multi-story structure more than a certain number of stories from the ground floor. Will cranes and special permits be required to complete a structure in a crowded downtown area? Are the project specs required or flexible?

These issues all impact the development of commercial construction estimates and require a high level of expertise to bid without errors. Further, because of the high level of competition for these high-figure jobs, a narrower profit margin is required. Developing cost estimates for commercial construction projects can be difficult, but it doesn't have to be! When you work with 1build, you can simply focus on the construction side of your business rather than estimating. Sign up for our estimating service today!

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