What Is Commercial Construction? A Complete Guide

Published Categorized as Construction
Commercial Construction Contractors at Site

In construction, we deal with different kinds of clients, from homeowners to multinational corporations. All of them require different types of structures that are suited for various endeavors. But there is one type of project that is a bit more complicated than the rest – commercial construction.

Commercial construction refers to the process needed to build grocery stores, restaurants, lodging facilities, offices, industrial buildings, and other structures. It requires various building codes, permits, materials, and heavy equipment. Most of these aren’t needed when building a house or apartment.

Structures for commercial use require a lot more than what residential construction does, but we’ll cover all of them in great detail. After this guide, you’ll never look at structures the same way. It’ll also give you a better idea of what works better for your next construction project.

Residential vs. Commercial

Most people are only aware of residential construction because it’s the most common type that we see. We build millions of structures every year, but only a fraction of these fall under commercial construction. It’s crucial to establish the difference between the two because the development, design, and construction aren’t the same.

Commercial structures require more complicated processes, but it’s streamlined, making it possible for business owners to have their establishments faster. Aside from the difference in speed and skills needed for both types, here are other things that we believe create the most significant differences between residential and commercial construction:

Uses for Residential and Commercial Construction

Residential construction is pretty straightforward: it’s a process that aims to construct a structure where people will live. It’s the most common project that we see because anyone can build houses or apartments wherever people stay. Whether it’s close to their workplace or the suburbs, residential construction can occur.

Although location is also a factor we consider when building houses, it’s not as crucial as commercial buildings.

On the other hand, commercial construction is solely for business purposes, either for a small firm or to house multiple businesses in one structure. This type also includes groceries, restaurants, medical centers, or industrial buildings. Since these structures depend more on the location, we only see most of them in commercial areas.These are prime establishments that can affect the status of one place. Building a house barely affects the price of land in an area. However, if a massive company starts constructing a commercial establishment, it can change the landscape and affect real estate prices within that area or nearby places.

Codes and Permits Needed for Construction

Whenever you construct something—residential or commercial—you need to follow a specific building code that adheres to the municipal’s guidelines. You also have to acquire different permits to start your construction. Regardless of the scale of construction, these are two things that you need to have before you can even proceed to the design stage.

Residential buildings are straightforward, and most municipalities have the same code and permits. It means that the process for building one house may apply to another house. In fact, land developers only need to acquire one permit and adhere to the same code if they’re constructing multiple residential structures.

In contrast, commercial structures depend on the nature of the business. It’s a bit more complicated because it needs to follow different codes and acquire the necessary permit, depending on how the owner will use the structure. It means that the code and permits required for one building may not apply to another, even if they’re only a block away from each other.

Materials and Equipment for the Construction

The residential market relies on wood, while commercial establishments use steel frames. It may be a small difference, but it requires different equipment. Since you’ll need additional equipment to work on steel frames, you also need different levels of expertise.Many people, even with basic training, can start building their houses. As long as it follows the building code and has the municipality’s permit, they can complete their construction.

Commercial construction requires more sophisticated equipment, requiring the worker to undergo extensive training. Having the skill to build a house doesn’t necessarily mean that they’re qualified to work on commercial construction. People who are working on these projects are professionals trained to handle different tasks needed for the project.

Aside from the materials, the scale of construction also varies. The most prominent residential buildings are only comparable to the small scale commercial structures. The bigger the project gets, the more complicated it becomes. From development to finishing, commercial establishments need to be streamlined for the workers to be more efficient.

The Speed of Completion or Work Pace

When you start building a house or an apartment, the construction can take a year, and it won’t be an issue for the owner. Although they want the project to be complete as soon as possible, there’s no pressure to increase the work pace. In fact, there are even some residential construction projects that take more than a year to complete.Commercial landlords need the structure as soon as possible because they need to move faster. Unlike homeowners, businesses expand more quickly. They also need to recoup their investment quicker. Aside from this, they also have multiple personnel working on the construction, so the longer it takes, the more expensive it gets.

Even if you work with a subcontractor, they will also do their best to complete the construction faster than a house. Time is a crucial factor, and time is money in commercial construction. That’s why we often see these buildings be complete in a couple of months, regardless of the project’s scale.

Common Types of Commercial Construction

Another factor that makes commercial construction even more complicated is the different types of structures that fall under this category. If we talk about residential construction, it only refers to the ones where people live. Commercial buildings aren’t as simple because some are office buildings, while others are warehouses. Both are very different structures that still fall under commercial construction.

To help you better understand the buildings that fall under commercial construction, we’ve created a shortlist for you. Below are the most common types of structures that belong to this category.

Grocery and Retail Stores

Groceries may seem simple at first because some say that it’s only a glorified warehouse. However, there are many things that you have to consider when building a grocery, including having enough space that focuses on a fluid movement of people. Aside from designing the area, it also needs to be more appealing than an average warehouse.

People visit groceries regularly, so aside from a favorable location, they also need to have enough space for people to move around. The same is true with retail stores. Although these are smaller construction projects, it shouldn’t constrain the movement of customers.

Proper construction for groceries and retail stores needs to consider the inside and outside of the structure to ensure that it’s suitable for accommodating more people.


Restaurants have peak hours. People go there to have lunch and dinner, but they don’t get the same number of people throughout the day. That’s why it’s crucial to maximize its capacity to accommodate more people without affecting the staff’s versatility and efficiency. It’s also a commercial construction that requires the place to have a unique and innovative approach.

Aside from the design, restaurants also need to go through strict codes and permits on health and food safety. The kitchen area also needs to pass the municipality’s safety protocols before it can operate. Any construction team needs to consider all of these things before starting the project’s development stage.

Hotels and Motels

There are two types of lodging facilities: basic and high-end. When you’re only working on a basic hotel or motel, ease of access, comfort, and privacy are the only things you need to focus on. These are the bare essential of a lodging facility that you need to consider during the development stage. Once you have this in place, you’ll need to make some adjustments to adhere to the municipality’s building code.

High-end hotels require more complicated processes, including the finishing touches of each section and room. Aside from this, the business owner may also need sound-proofing for each room to improve the experience that customers can get. Remember, hotels depend on repeat business, so their focus is to provide their clients with the best experience that they can have.

Office Buildings

An office building may vary from a small one that only intends to house a small firm to a skyscraper that multinational corporations need. Developing office buildings depend on the scope of the businesses that it plans to house and the number of employees that will use the facility. Regardless of the project’s scale, accessibility and fluid movement are essentials that you need to consider.

If the building intends to house hundreds of businesses and thousands of employees, elevators and stairways will be a significant concern. You don’t want them to spend several minutes just to move from one floor to another.

Bathrooms and fire escapes are also two facets that require careful planning. Aside from all of these, it also needs stricter building codes because people will spend most of their time in this structure.

Industrial Buildings

Businesses need an office to operate and manage their day-to-day activities. Still, most of them require a warehouse or other similar industrial buildings to build and store their products. Besides having enough space to store raw materials and finished products, you also need to consider the building’s workflow. The design should maximize the efficiency in every stage of product development and manufacturing.

Since this is where businesses get their products, the structure should be accessible for delivery vehicles. The ceiling should be higher than usual because the personnel will use equipment while inside the building. There will be different sections within an industrial structure, so you need to adjust the ceiling according to the workflow.

Despite being an open space for storage and operation, it still needs an intricate design to ensure that the workers become more efficient.

Medical Centers

From small pet clinics to state-of-the-art hospitals, all of them fall under medical facilities with a different building requirement. Unlike office buildings, medical facilities require wider corridors to make room for moving patients and life-saving equipment.

Elevators need to be bigger to allow faster transport of various medical equipment. Ramps are also crucial because they enable any person to move freely, even during emergencies.

Aside from the design, it should also have enough space for emergency vehicles suitable for the structure. You can’t have an emergency room away from emergency vehicles. It requires careful planning because hospitals deal with different situations. Life-saving equipment should be very accessible while having enough space for non-emergency machines that doctors may need to treat a patient.

Athletic Structures

When talking about athletic structures, we often think about large scale stadiums that can accommodate thousands of spectators. However, smaller buildings also fall under this category, such as fitness centers, high school gyms, auditoriums, and other playing areas. All of these intend to host sports activities, whether outdoor or indoor.

Regardless of the scale of construction, there’s one thing that remains constant in these structures: they all need bleachers for the spectators. Fluid movement is a crucial factor that you need to consider because people watching may come and go.On top of all these, structural integrity should be a top priority to ensure all visitors’ safety. Construction of a stadium that can accommodate 30,000 people will be complicated, requiring careful planning and design.

Different Scales of Commercial Construction

As you may have noticed, commercial construction covers a wide range of projects on different scales. Regardless of the type of structure, it will always be any of the three: small, medium, or large scale. All of these have various requirements when it comes to materials, equipment, building code, and permits.

To be successful and more efficient with any project, you need to be aware of the different construction scales. It’ll make it easier for you to determine the materials and equipment you need. Whenever you work on commercial construction, it’ll always be any of the following:

Small-Scale Commercial Construction

Small-scale construction can be an office redesign, workflow redistribution, and building repairs. Anything that requires professionals to improve or repair a commercial structure falls under this category.

These projects don’t need as many personnel as you would on medium and large construction projects. In fact, you can complete most small-scale projects even without someone overseeing the day-to-day activity of the workers.

Aside from that, it won’t require careful development because it’s only a facelift for the building. However, the new design still needs to adhere to the building code, and some municipalities may require a building permit even for small scale construction.

These projects’ work pace is often expedited because there are already people who are using the facility. We don’t want the project to take long because it obstructs their workflow.

In many cases, small-scale construction won’t require the use of heavy equipment. It also reduces the number of personnel you need, and you don’t have to go through extensive training to ensure their efficiency. A small-scale commercial construction is the most straightforward project that you can take because clients already know what they want to do with the facility.

Medium-Scale Commercial Construction

The average lifespan of a commercial building is 50 to 60 years. During its early stages, the facility won’t require any maintenance. However, it’ll require renovation, repairs, and rehabilitation as it gets older. The general rule for commercial buildings is to undergo asset renewal projects after 30 years to retain its condition. When you start projects like this, it’ll fall under medium-scale construction.

Another example would be an existing building that requires expansion, additional structures, or remodeling of their current design. It can also be the basic construction of small commercial types such as clinics, playing areas, small retail stores, and single offices. These construction projects require equipment and some level of expertise, but it’s not as extensive as building a structure from the ground up.

In most cases, medium-scale commercial construction only includes the improvement of the current structure. Since it already has everything needed for the project, it won’t require as much development as you would when working on a large-scale construction. You’ll need equipment to complete the building, but most of them won’t require extensive personnel training.

Large-Scale Commercial Construction

When you’re building a commercial structure from the ground up, it’ll always fall under large-scale. As long there’s no existing structure that requires a repair or rehabilitation, we consider it a large scale commercial construction. It starts with the purchase of land and acquisition of zoning codes for the building you’ll construct.

Once these two are in place, the owner will work with an architect to create the building’s plan based on his vision. All of these should pass the building code and acquire the building permit before proceeding to the construction. The engineer will be responsible for putting everything together to make the design happen.

These construction projects will take several months from development to the finishing touches. Each process requires a professional to oversee every activity. It also requires heavy equipment that you usually see in construction sites: cranes, bulldozers, backhoe, etc. You may need additional equipment based on the type of land that you’re trying to develop.

Since these construction types require multiple sophisticated heavy machines, the team also needs several highly-skilled workers to operate them. All of these only work with one goal in mind—to make everyone as efficient as possible, and complete the structure in the shortest time possible.

Processes Involved in Commercial Construction

Just like houses and apartments, commercial construction needs to go through different stages of the project. However, since residential structures don’t require several workers on the site, communication isn’t as crucial as it is when working on commercial buildings. The key to the efficiency of workers and the success of a commercial construction depends on exceptional communication.Every process involved in commercial construction requires good communication. Even if a project doesn’t need all stages, it will still speed up the scheduled completion. It’s also worth noting that the development stage may not be applicable in some small and medium-scale projects.


Before the team can have a plan, the business owner has a vision. He will then look for a team that can make his vision a reality. It’s where the development stage starts, which is, perhaps, the most complicated of all processes. Most business owners aren’t construction savvy, so their vision will only be for everything they want. The development stage’s goal is to ensure that the client’s wants are suitable for what they need.

The construction team will develop a plan intended to get as close to the owner’s vision, but make some adjustments based on what they need. It may include some replanning to meet the building code and acquire the necessary permits to proceed with the construction. After this stage, the next part of the development is estimating the project’s cost.

Many things can affect the cost of building an establishment, and most of them happen during the construction stage. So, it’s impossible to have an accurate estimate of how much it would cost. What’s vital in the development stage is to have the wants and needs in place, together with a rough estimate of how much the project would cost.

An initial estimate would suffice to secure a budget, but the owner should know that the actual cost may be higher or lower.


If development focuses on securing the budget and ensuring that the project meets the client’s wants and needs, the design focuses on creating the plan. This stage will include drawings or 3D renders to give the owner an idea of how the structure looks once the construction is complete.

During this stage, there will be several changes to the plan. It’s sporadic for owners to approve the first plan, and they’ll want to make a few adjustments before proceeding to the construction. It’s the reason why communication is vital when working on commercial buildings. Without proper communication and approval from the owner, you can’t move on to the next stage.

Design is essential for commercial construction because it’ll be easy to go over budget without it. Aside from that, the engineer won’t have anything to follow to put everything together and complete the building. Before you start working on anything, you need to have a design in place, which follows the agreement you did during the development stage.


After the client approves the design, the team will proceed with the construction. It’s where we put everything in place and have the equipment ready for the building. The engineer will handle everything at this stage, including the workers, scheduling work, and ensuring that the project gets completed as quickly as possible.

Despite having a design approved, many clients will still make adjustments and revisions with the plan. These changes, big or small, can affect the budget and schedule of the project. Before proceeding with these adjustments, you need to ensure that the client is aware of the project’s budget and schedule changes.

The construction is the stage that takes most of the time in any structure. Depending on the building’s size, it can take anywhere from a couple of months to a few years. The goal is to replicate the plan and have everything in place for businesses to function.


You’ll schedule an on-site tour when the structure is close to completion, or after it is complete. At this stage, the owner may still require some minor adjustments with the design. Although close to the 3D renders and drawings, the finished product may not be what the client expects. That’s why it would be best to conduct on-site tours before the completion.

In many cases, an on-site tour is only for formality and an assurance that they have what they want. This stage may take a few days to a couple of weeks, depending on the building’s size. Once the client confirms everything looks the way he envisioned the structure, you can officially call it a completed project.

However, it doesn’t mean that you’ve done everything you need because you still need to handle the logistics. The excess materials and equipment used for the project still need to move out of the site. It’s the final stage of commercial construction, and the client can already use the building as soon as you move out.


Commercial construction is the pillar of any community. A fledgling community will always need a commercial establishment, from retail stores to physical fitness centers and medical facilities to secure workplaces. It can be challenging to have an active community without services coming from commercial buildings.

Gaining a deeper understanding of commercial construction is crucial to land development. After all, it’s the most complicated construction type because it covers various buildings at different scales. Building a commercial structure isn’t easy, and it’ll require exceptional communication to be successful. From the development stage to the finishing stage, you need to keep open communication between various teams and clients.


By Giovanni Valle

Giovanni Valle is a licensed architect and LEED-accredited professional and is certified by the National Council of Architectural Registration Boards (NCARB). He is the author and managing editor of various digital publications, including BuilderSpace, Your Own Architect, and Interiors Place.

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