The real estate sector has three major categories: residential construction, industrial construction, and commercial construction. Many of us think of industrial and commercial buildings as one of the same things, which is untrue. Having been serving the construction industry in San Francisco for more than a decade now, we have experienced significant differences between the two, which might not be obvious to someone outside the industry.
Through this blog, let us explain to you the key points of commercial vs industrial comparison.
Simply put, industrial constructions aim to harmonize the manufacturing and distribution of products to commercial establishments and mainly cover the outskirts of a town away from residential areas. Common examples of industrial buildings include factories, power plants, refineries, solar wind farms, large production houses, and assembly units. The construction spending of new industrial buildings in the United States peaked in 2022 at over $115.09 billion.
Read in detail about different types of industrial buildings and their characteristics here.
Whereas commercial constructions focus on service-oriented businesses that aim to provide service to the public. These buildings have an aesthetic design to attract people and are located at locations with good connectivity and footfall. Some examples of commercial buildings are retail stores, malls, supermarkets, restaurants, hotels, hospitals, gyms, and other fitness facilities.
Currently, there are more than 67,991 commercial building construction businesses operating nationwide, with California having the highest number of businesses.
Industrial and commercial buildings have many more notable differences, and the process of building varies widely between the two. Both have their own set of specific objectives and challenges.
The intended use of the construction determines the following crucial factors :
Let’s jump right in and understand what marks the line between industrial and commercial construction.
The main difference between industrial and commercial construction is the construction location and planned structure.
For industrial construction, the primary purpose of these buildings is to produce and dispatch products to commercial establishments to sell them. These facilities are built-in stations with easy logistics access. Hence, industrial constructions are built on the city’s outskirts where they can easily transport bulk materials from and to the industrial building.
As industrial activities take place on large machinery throughout the day, it is usual for the industrial constructions to lie away from the residential and thickly populated areas.
Commercial construction focuses on serving people, it surfaces at a place easily accessible by all. Hence, commercial buildings are usually built inside the city areas, centrally located for easy access.
Another characteristic feature of commercial construction is that they must be located and designed for maximum foot traffic. So, commercial buildings are constructed where many people can access the building on foot and lie close to the market they want to serve.
In short, the key difference between commercial and industrial construction in choosing the location is:- the access to more people for commercial construction. In contrast, it is easy logistics to move large amounts of materials and machinery for industrial construction.
Usually, municipalities establish land-use regulations to designate areas for specific businesses or activities. This is known as zoning. There are major commercial vs. industrial zoning differences regarding traffic, accessibility, noise, parking space, and environmental impacts.
Industrial facilities need bigger lot sizes for accommodating industrial operations and the scale of the building. They also have wider setbacks (distance between the property line and the structure) to allow heavy machinery, truck traffic, utility lines, or any other infrastructure.
Because of their high noise levels coming from machinery or manufacturing processes, industrial properties are ideally zoned in seclusion, away from residential areas. Moreover, industrial zoning requires parking space per 1,000 square feet, depending on the intended use of the building.
Opposite to the specific nature of industrial zoning, commercial zoning makes room for different types of businesses that interact with the public. For example, offices, retail shops, restaurants, hotels, or fitness centers. It can also include apartment complexes. Zoning for commercial buildings is affected by the availability of parking space, proximity to other businesses, and distance between religious establishments or schools.
Commercial zoning also has environmental restrictions but is less stringent than industrial ones. Setbacks for commercial properties are much closer to the roads.
The difference in site planning of commercial and industrial facilities is because of their varying locations. Every construction project starts with selecting the location, the size of the site, lot boundaries, and traffic patterns. All these considerations are assessed through a detailed site analysis.
Site planners of commercial environments like retail centers and office complexes take into account local pedestrian behaviors, ease of consumer access, and proximity to similar businesses. They also ensure that the site has ample parking space and pedestrian-friendly amenities.
Industrial site planning needs to comply with strict environmental and safety guidelines as these factories produce hazardous waste. Since industrial buildings require vast areas of operational space, they are mostly planned close to highways, airports, and railway stations so that 24/7 shipping and receiving of goods is possible.
The design of any building is aimed to serve its purpose and the people who interact with it.
As commercial structures are service-oriented, their building designs are focused to accommodate heavy foot traffic and facilitate smooth internal movement. The external design of commercial facilities like shopping malls, restaurants, fitness centers, and offices, includes parking lots and landscaping to visually attract potential customers or tenants. Sometimes, commercial buildings may have different design requirements, for example, a hospital or university may require special floor plans.
While the design of an industrial facility is purely based on functionality. Its internal design will center around the coordination of manufacturing and distribution lines as well as the navigation of load-bearing trucks. Here, maintenance of logistics and industry safety standards are a priority, hence, aesthetics always takes a backseat.
By now, you know that as commercial and industrial constructions serve different purposes, they must have different facilities attached to them for their optimum utility.
Since industrial constructions mainly focus on production and transportation, they have space for accommodating heavy machinery and the technical components necessary for manufacturing the products. They also have enough space to allow bigger trucks to move in with raw materials and go out with finished goods without any difficulty.
Due to the necessity for large plots of land required for industrial construction, they are situated at places away from crowded areas, with all the external infrastructures necessary for the smooth flow of the manufacturing process and transport of goods.
On the other hand, commercial construction has to be accessed by many people. It should have enough space for the movement of those who come onto the building, complete their work and go out of it without any problem.
For this, these constructions must have all the facilities like providing enough parking space, arrangements for the orderly flow of traffic, structures for helping people reach their destination, easy access to roads, and transportation services.
The type of work to be conducted in the buildings determines the type of construction. It is also one of the main differentiating factors for industrial and commercial buildings.
An industrial building is used for the installation and operation of heavy machinery. These are built taller, larger, and stronger to accommodate heavy equipment and machinery required for manufacturing goods. They have more oversized doors, wide corridors, high ceilings, and large shelves.
The commercial construction attracts more people to it, and so they accommodate lots and lots of foot traffic. They allow many people to go into and out of the building simultaneously without much hassle.
Commercial businesses rely on returning customers, and they strive to give them the best experience while inside the building by building infrastructures where such customers can quickly get where they want to.
Such vital points are the building blocks of designing the interior of a commercial building. These are the reasons why the interior of these buildings depends on the type of services they provide.
The types of electrical, plumbing, and mechanical systems inside the building also differentiate the type of construction.
The electrical, plumbing, and HVAC systems are more robust in industrial construction with higher capacities. They are more oriented towards the machinery used in the production process than offering comfort to the persons working in these buildings.
In a commercial building, central electrical, plumbing, and HVAC systems are installed to handle the supply and distribution of water, air, and electricity throughout the building. It is necessary for the convenience and comfort of those who use the facility.
As people will be the ones for whom these are provided, these systems are centrally controlled and are of lower capacity to cater to the needs of the people who use the buildings.
The scale of construction also varies widely with industrial and commercial buildings.
In industrial construction, vast areas are developed for logistics and related requirements, hence built-in regions are not easily accessible to the people. That is why these industrial constructions are developed in a way that they are ideal for people to live around them while still making them efficient in manufacturing, logistics, and production of goods.
Commercial construction, however, can be a skyscraper to accommodate many offices, shops, and other places of work where thousands of people can come and work. Due to their central location and easy accessibility, any number of people can come and go.
These types of construction focus more on the main construction, as most of the related facilities are already available due to their central location.
The type of project management required differs a lot for industrial and commercial constructions based on their specific needs.
Industrial construction varies in type, size, construction methods, and the manufacturing process conducted in the building. Due to this, you need to use different kinds of project management while constructing an industrial structure.
The materials used in the building also vary in specifications, types, and techniques used in the construction.
As such, industrial construction needs specialized skills in on-site equipment assembly, custom fabrication of complex structures, and large-scale integration of different types of installations.
Usually, industrial construction is more extensive and takes more time to complete than commercial construction.
Commercial constructions are more streamlined with the use of the same materials, construction processes, and techniques. These can be built with materials you find in your neighborhood hardware stores.
Though both industrial and commercial constructions need permission from governmental bodies before, during, and after the completion of the project, there are some vital differences between these two.
For commercial construction, the builder must comply with all the occupancy requirements, and permits from the local planning and zoning boards, and municipal authorities. Some commercial constructions must receive a license from health departments. But it is comparatively a much faster process than the former.
Here are the necessary permits and licenses a commercial building has to obtain:
In industrial construction, permissions from the local authorities, additional inspections, and approvals become necessary depending on the scale of operation. Some industrial structures may also need permission from the city, state, and federal governments.
In addition to regular building permits and contractor licenses, an industrial building has special document requirements like:
Industrial and commercial constructions form a significant part of the construction in modern times. A business may need both of these types of buildings. The design, type of building, internal structures, and amenities vary with the kind of construction. A business may need both of these types of buildings. The location, building design, zoning regulations, permits, and amenities vary with the kind of construction. To sum up, it’s essential that you understand these differences between industrial and commercial construction and plan, design, execute and complete the projects accordingly.
Understand the nature of your business, location requirements, operational costs, skill sets, work preferences, a team of professionals, etc. before deciding the right construction type. You can also consult an independent real estate advisor who will set the criteria for selection.
Here are 4 tips to recognize appropriate construction firms:
On average, the cost of industrial construction in San Francisco is $1,600 per square meter. On the other hand, average construction costs for a commercial office building (single-storey) in San Francisco range between $238 and $286 per square foot.
Relevant Resources:
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This post was last modified on July 23, 2024 10:55 am
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