Commercial Tenant Build-Out Electrical Cost

When a business leases commercial space, the electrical work is one of the larger and less predictable line items in the build-out. A bare shell that needs a full fit-out costs far more than a space where the previous tenant left usable infrastructure. And a restaurant or a medical suite costs multiples of what an open office does, because the power density is completely different.

Here is how commercial tenant build-out electrical is priced in 2026, what moves the number, and how to use a tenant improvement allowance so you are not paying for the landlord’s asset out of your own pocket.

What Tenant Build-Out Electrical Covers

Tenant build-out electrical (also called tenant improvement, or TI, electrical) is everything from the point where the building’s power reaches your suite to the last device on your wall. On a typical fit-out that includes:

• Distribution: a tenant panel, sub-panels, and feeders sized to your load.
• Branch wiring: outlets, dedicated equipment circuits, and any special-purpose circuits.
• Lighting and lighting controls, including the occupancy sensors and daylighting controls that energy codes now require.
• Power and disconnects for HVAC equipment installed as part of the build-out.
• Rough-in for low-voltage and data, often coordinated with a separate cabling contractor.
• Permits, inspections, and final connection.

It does not normally include the building’s base service or the utility’s equipment, which are the landlord’s responsibility, though a heavy tenant load can force a service or panel upgrade that becomes a negotiation point in the lease.

Cost by Space Type

Electrical is best estimated per square foot, because it scales with the space and its use far more than with any single piece of equipment. The ranges below are for the electrical scope only, not the entire build-out.

Space type	Electrical cost per sq ft	What drives it
Open office / co-working	$4–$10	Low power density, mostly lighting and convenience outlets
Standard office (private rooms)	$8–$15	More circuits, more lighting zones, conference and IT power
Retail	$6–$14	Display lighting, signage, point-of-sale circuits
Restaurant / commercial kitchen	$15–$30+	Three-phase kitchen equipment, exhaust, refrigeration, high circuit count
Medical / dental	$20–$40+	High power density, dedicated and isolated circuits, imaging equipment
Warehouse / light industrial	$3–$8	Sparse lighting and power, high-bay fixtures, occasional equipment drops

A 3,000 sq ft standard office at $10/sq ft lands around $30,000 in electrical. The same footprint as a dental practice can exceed $90,000. The space type is the first thing any contractor will ask about, because it sets the entire order of magnitude.

What Drives the Cost

Power density. Offices draw a few watts per square foot. Kitchens, labs, and medical suites draw many times that, with banks of dedicated circuits for individual pieces of equipment. Higher density means a bigger panel, heavier feeders, and far more branch circuits.

Lighting and controls. Modern energy codes (the IECC and California’s Title 24) mandate occupancy sensors, daylight-responsive dimming, and in many cases automatic shutoff. These controls are a real cost, but they are not optional. A commercial LED lighting layout designed to code is part of every compliant build-out.

HVAC tie-in. Rooftop units, split systems, and exhaust fans installed during the build-out need disconnects, whips, and circuits. The more mechanical equipment, the more electrical coordination.

Panel capacity and three-phase need. If the existing tenant panel cannot carry your load, you are adding capacity. Equipment-heavy tenants often need three-phase power that the prior tenant did not, which is one of the larger swing items in a quote.

Condition of the existing space. Second-generation space that was previously fit out for a similar use can reuse panels, conduit, and even some circuits. A cold dark shell with nothing but a meter is a ground-up install. The same square footage can differ by 2x on this factor alone.

Code and occupancy classification. Changing the use of a space, say from retail to assembly or to a medical occupancy, can trigger stricter requirements: emergency egress lighting, more frequent inspections, and higher-rated equipment.

Who Pays: Tenant Improvement Allowances

Most commercial leases include a tenant improvement allowance, a dollar amount per square foot the landlord contributes toward the build-out. Electrical is one of the line items that allowance is meant to cover. A few practical points:

• The allowance is negotiated, and it is real money. A larger allowance is often worth more than a slightly lower base rent over a multi-year lease.
• Anything that becomes part of the building (service upgrades, base distribution, code-required life-safety work) is a strong candidate to push onto the landlord, because the landlord keeps the asset after you leave.
• Tenant-specific work (your equipment circuits, specialty lighting) typically comes out of your pocket if it exceeds the allowance.
• Get the electrical scope itemized so you can see exactly what the allowance covers and what you are funding directly.

Treat the allowance negotiation and the electrical scope as one conversation. The cleanest outcome is a clear split where the landlord funds the building-grade infrastructure and you fund the tenant-specific fit-out.

The Build-Out Electrical Process and Timeline

Design and permit. Your electrician (or the project’s design-build team) produces drawings and pulls the commercial electrical permit. Permit timelines vary widely by municipality.

Rough-in. Conduit, boxes, and wire are installed before walls and ceilings close. This is the phase to get right, because changes after drywall are expensive.

Trim and devices. Outlets, switches, fixtures, and panels are installed and terminated once finishes are in.

Inspection and connection. The local inspector signs off at rough-in and final, and the system is energized.

Typical timeline for a straightforward office fit-out is two to five weeks of electrical work, sequenced inside the larger construction schedule. Restaurants and medical spaces take longer because of the equipment coordination and the additional inspections.

How to Get Accurate Quotes

Provide drawings or a detailed scope. A floor plan with intended use, equipment list, and any landlord-provided base building information lets a contractor bid the actual job instead of padding for unknowns.

Ask for a per-item breakdown. Lighting, power, HVAC connections, panel work, and low-voltage rough-in should be separate lines. A single lump sum hides where the money goes and makes change orders harder to evaluate.

Confirm what is excluded. Common exclusions are data cabling, fire alarm, the landlord’s base service, patching and painting after wire runs, and utility coordination fees.

Get at least three quotes. As with all commercial electrician work, the same scope can vary 30–50% between contractors. The spread reflects real differences in overhead and experience with your type of space, so weigh the bidder’s relevant build-out history, not just the bottom line.

Codes and Standards Worth Knowing

Every tenant build-out is scoped against the National Electrical Code (NFPA 70), which governs how the wiring is installed, and against the energy code your jurisdiction has adopted under the IECC or a state equivalent like Title 24, which governs lighting power and controls. Worker safety during the build-out itself falls under OSHA’s electrical standards. A contractor bidding commercial TI work should be fluent in all three, because a build-out that passes the wiring inspection can still fail the energy-code review if the lighting controls were value-engineered out.

FAQ

How much is electrical for an office build-out per square foot?

For a standard office with private rooms, budget $8–$15 per square foot for electrical alone. Open or co-working layouts run lower, around $4–$10, because of the lower circuit count and simpler lighting.

Why is restaurant or medical build-out electrical so much more expensive?

Both have very high power density. Commercial kitchens need three-phase circuits for ranges, ovens, refrigeration, and exhaust. Medical and dental suites need many dedicated and sometimes isolated circuits for equipment. The branch-circuit count and panel size are several times those of an office.

Does the landlord pay for the electrical work?

Partly, through the tenant improvement allowance negotiated in your lease. Building-grade infrastructure and code-required life-safety work are good candidates to push to the landlord. Tenant-specific equipment circuits usually come out of your budget if they exceed the allowance.

Can I reuse the previous tenant’s electrical?

Often, yes, if the prior use was similar. Second-generation space with usable panels, conduit, and circuits can cut the electrical cost substantially compared with a bare shell. An electrician should evaluate the existing infrastructure before you assume it is either reusable or worthless.

What is not included in a typical electrical build-out quote?

Commonly excluded items are data and low-voltage cabling, fire alarm systems, the landlord’s base building service, drywall patching after wire runs, and utility coordination fees. Always confirm the exclusion list in writing.