As the office sector works to regain its central role in the commercial real estate market, fit-out costs have increased over the past year, according to JLL’s 2025 guide. The increase is being driven by inflation, material costs and currency volatility.
In fact, prices in North America are among the highest in the world, with a significant premium for office fit-out costs. The average is $3,070 per square meter in the continent, compared with $1,830 per square meter in other parts of the world. U.S. cities dominate the top 20 by office fit-out cost worldwide. The top five cities for those costs in the United States are New York City, San Francisco, Boston, Chicago and Los Angeles.
Office fit outs are increasingly seen as a factor in helping employers attract workers back to the office. With limited supply of grade A office space in prime locations, there has been and will continue to be an increasing focus on lease renewals and existing office buildings, said JLL.
Recommended For You
The CRE firm's guide also noted that demand for healthier, energy-efficient workspaces with 60% of market surveyed reporting an increase in client inquiries for more sustainable fit outs in the past year. One area that has received less attention is the opportunity to consider whole-life sustainability and the impact of reinstatement on embodied carbon.
“With increasing costs for materials, furniture and finishes, forward-looking organizations will be considering how alternative reinstatement models could create both cost and carbon savings,” said JLL. “Central to the success of these will be collaborative partnerships between landlords and tenants, to identify opportunities for re-use and enhancement of existing fixtures and fittings.”
Challenges in the office fit-out space continue to revolve around labor shortages, talent acquisition, material availability and liquidity, said the guide. Trade and tariff uncertainty are also weighing on the sector.
The most expensive component of office fit-outs in North America is Builders Works, which includes partitions, flooring, finishings and joinery. These costs account for about 38% of the segment's budgets in North America. The second most expensive category is mechanical and electrical services, which can account for about 29% of costs. Furniture accounts for about 14% of total costs. IT and AV works make up 10% of the continent's office fit-out costs, with professional services at about 9%.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
