Office build-out costs across the U.S. and Canada are climbing in 2026 as companies invest in more technology-intensive workplaces built for hybrid work, AI infrastructure, and flexible collaboration, according to JLL’s new U.S. and Canada Office Fit-Out Costs Guide.
New fit-out data from 50 North American markets shows the average medium-quality office build now costs about $295 per square foot, though pricing varies widely depending on region, office layout, and technology requirements.
Companies renewing leases or renovating offices are prioritizing spaces with stronger AV systems, upgraded connectivity, smart-building technology, and higher power and cooling capacity. Those systems are becoming standard rather than premium features.
Technology Costs Become a Bigger Part of Office Projects
Mechanical, electrical, IT, and audiovisual systems now account for up to 12% of total fit-out costs in some markets, with technology-related expenses rising faster than many traditional construction categories.
Industry data shows security, AV, and IT costs increased about 8% year over year as demand grows for smarter workplaces that support video collaboration, flexible work patterns, and AI-enabled systems.
At the same time, employers are continuing to upgrade office space even as new office construction remains limited. With office availability declining for seven straight quarters and little new inventory entering the market, many companies are focusing on renovations instead of relocations.
Regional Gaps Continue to Widen
Costs remain highly uneven across markets.
Sun Belt cities continue to benefit from relatively lower subcontractor pricing, while major coastal markets face tighter labor conditions and rising specialty trade wages. Canadian markets also remain more expensive overall due to labor costs, regulations, and trade uncertainty tied to the upcoming USMCA renegotiation.
Open and flexible office layouts remain the least expensive format on average, while traditional office configurations with more enclosed spaces and infrastructure requirements cost significantly more.
Labor and Trade Pressures Add More Uncertainty
Construction labor shortages are also driving up costs, particularly for skilled electrical, HVAC, and technology trades. Industry analysts say demand for specialized workers is growing faster than the labor pipeline can replace retiring workers.
Trade policy and global supply chain disruption are adding additional pressure. Tariffs and geopolitical instability continue affecting material pricing, especially for electrical and HVAC systems heavily tied to imports and energy-intensive manufacturing.
The report suggests many early-stage office projects may still underestimate future costs as those pressures continue moving through supply chains.
Office Investment Shifts Toward Quality Over Expansion
Rather than expanding footprints, many occupiers are investing in higher-quality environments designed to support collaboration, flexibility, and employee experience.
Employers may be leasing less space overall, but the space they do keep is becoming more expensive to design, power, and operate.
