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How Do I Budget a Commissary or Shared Kitchen Buildout?

📖 2,078 words🗓️ Published Jun 23, 2026

Direct Answer

Budget a commissary the way a smart operator does: find a second-generation restaurant or food space and inherit the expensive bones — the grease trap, hoods, gas service, and floor drains are the budget killers, and a building that already has them saves you $100–$200 per square foot. A commissary or shared/ghost kitchen buildout runs $150–$450 per square foot in raw space, but a second-gen restaurant conversion can drop to $75–$200 per square foot. The two systems that dominate cost: the exhaust hood with make-up air ($1,000–$2,500 per linear foot installed, often $40,000–$120,000 total) and the utility upgrades — a busy kitchen needs 400–1,200 amps, gas service sized for ranges and ovens, and a water heater and grease interception system the building probably doesn't have. The single biggest money move: never sign a raw-shell lease for a kitchen if a second-generation food space is available, because retrofitting hoods, gas, and drainage into a cold shell is where budgets double. The second move: make the landlord deliver the hood, grease trap, gas service, and floor drains as base building or fund them through a TI allowance ($50–$150 per square foot) — these are permanent improvements that increase the property's value and outlast your tenancy. And get the health department and building plan-check requirements in hand before you design, because a layout that fails plan review costs you weeks and tens of thousands in redesign.

Inherit The Expensive Bones (Second-Gen Wins)

The cheapest commercial kitchen is one that's already most of a kitchen. A second-generation restaurant space typically comes with the four most expensive elements already installed: the Type I exhaust hood and make-up air, the grease interceptor (sized 750–2,000+ gallons for a commissary), floor drains and a mop sink, and adequate gas and electrical service. Inheriting these can cut a buildout from $300 per square foot to $120. When you tour a space, value it by what's already there: a working hood alone is worth $40,000–$120,000; a properly sized grease trap is $10,000–$40,000 with excavation; gas service and a meter upgrade can be $15,000–$60,000. Even if the layout is wrong, keeping the hood and gas infrastructure where they are and designing the kitchen around them saves enormous money. The opposite mistake — falling in love with a pretty raw shell in a good location — means you pay full freight for every system. Walk the space with a kitchen designer or MEP engineer before you sign so you know exactly what you're inheriting versus building.

The Real Cost Stack: Hood, Gas, Power, Drainage

Price a commissary by its systems, not its finishes. The big line items: exhaust hood + make-up air + fire suppression (Ansul) — $40,000–$120,000+; grease interceptor — $10,000–$40,000; electrical service and distribution — $30,000–$120,000 (kitchens draw 400–1,200 amps, and shared kitchens with multiple tenants cooking simultaneously need more); gas service and piping — $15,000–$60,000; plumbing, floor drains, and water heating — $40,000–$100,000 (commissaries need lots of hot water and three-compartment sinks, hand sinks, mop sinks, and prep sinks); HVAC for kitchen heat and ventilation balance — $20,000–$80,000; walk-in coolers/freezers — $15,000–$60,000 each; NSF-rated equipment — $50,000–$250,000+ depending on stations. For a shared/ghost kitchen with multiple cook stations, multiply hoods, gas drops, and electrical sub-metering, but you also amortize one grease trap, one set of drains, and one ventilation system across many tenants — which is exactly why the shared model pencils. Don't skimp on make-up air: an undersized make-up air unit starves the hood, backdrafts the building, and fails inspection.

How Not To Get Screwed By The Landlord Or Contractor

Food-space tenants get burned in specific ways. Trap one: the raw-shell lease dressed up as turnkey. A landlord offers "restaurant-ready" space that's actually a cold shell with no hood, gas, or grease trap — and a stingy TI allowance that won't cover them. Itemize what's actually delivered in the lease, and push the hood, grease interceptor, gas service, and floor drains into base-building work or the TI allowance, because these are permanent property improvements. Trap two: the TI allowance that excludes the kitchen's guts. Landlords offer a fat per-square-foot number, then exclude "specialty systems" — exactly the systems that cost the most. Define in writing that the TI covers hood, gas, grease, and drainage. Trap three: signing before plan check. Health and building departments have hard rules on hood coverage, sink counts, grease-trap sizing, and finishes; design without a pre-submittal plan-check meeting and you'll eat redesigns. Make rent commencement contingent on permit issuance. Trap four: the contractor without restaurant experience. Kitchen MEP and code are specialized — a generic GC will miss requirements and rack up change orders. Hire a restaurant-experienced GC and an owner's rep at 3–5% of cost; use a GMP contract with written change orders. Trap five: no free rent through the build. A kitchen buildout plus inspections takes 3–8 months; negotiate free rent for the entire construction-and-permitting window so you're not paying for a kitchen you can't legally cook in.

Permitting, Code, And The Shared-Kitchen Angle

Commercial kitchens live or die by health and building code. You'll deal with plan check, health department approval, grease-trap sizing rules, ventilation code, fire-suppression certification, and ADA. Build the layout around mandatory elements: a three-compartment sink, separate hand sinks at each station, a mop sink, proper floor finishes (quarry tile or sealed concrete with coved bases), and washable wall surfaces (FRP). The shared/commissary model has a real financial edge: by renting time slots or dedicated stations to multiple food businesses, you spread the $300,000–$1.5 million capital cost across many tenants and turn a fixed buildout into recurring revenue at $15–$35 per hour or $1,000–$3,000 per month per station. If that's your model, design for sub-metering, secure dry/cold storage per tenant, and access control, and confirm your jurisdiction's rules for shared food facilities. Carry a 10–15% contingency — kitchens uncover plumbing, gas, and code surprises behind every wall — and budget commissioning and health inspections as real line items, not afterthoughts.

flowchart TD A[Need a commissary] --> B{Second-gen food spaceunder br/over available?} B -->|Yes| C["Inherit hood, grease trap,under br/over gas, drains - $75-200/sqft"] B -->|No| D["Raw shell = full systemunder br/over retrofit $150-450/sqft"] C --> E["Design layout aroundunder br/over existing hood + gas"] D --> F["Push hood, grease trap,under br/over gas, drains onto landlord"] E --> G["Health dept plan checkunder br/over BEFORE final design"] F --> G G --> H[Build to NSF + code] H --> I[Inspections + open]

flowchart LR A["Landlord: restaurant-ready"] --> B["Itemize what's deliveredunder br/over in the lease"] B --> C["Hood, grease, gas, drainsunder br/at least base building or TI"] C --> D["Rent starts at permitunder br/over issuance, not signing"] D --> E["Restaurant GC + owner's repunder br/over 3-5%, GMP, written COs"] E --> F["Free rent throughunder br/over build + inspections"] F --> G[Open on budget, in code]

Related on PULSE

[How does the 2027 trend of vendor consolidation force RevOps to rewrite commission plans based on shared data lakes?](/knowledge/q16615)
[How do you document POC stage duration when Palantir Foundry is the buyer-mandated platform in multi-agency shared services deals using Salesforce?](/knowledge/q10529)
[How do you qualify territory overlap when Palantir Foundry is the buyer-mandated platform in multi-agency shared services deals using Salesforce?](/knowledge/q10528)
[How do you prevent loss reason capture when Palantir Foundry is the buyer-mandated platform in multi-agency shared services deals using Salesforce?](/knowledge/q10527)
[What's the right approach to running deal-room collaboration with buyers — Slack Connect, shared Notion, or stay on email?](/knowledge/q220)
[What Does a Commercial Kitchen Hood and Grease Trap Really Cost in a Buildout?](/knowledge/q13768)

Equipment & Smallwares Budgeting

Beyond the big-ticket hood and grease trap, budget $30,000–$80,000 for essential kitchen equipment in a shared kitchen: a commercial range ($2,000–$6,000), a double-stack convection oven ($4,000–$10,000), a walk-in cooler ($8,000–$20,000), and prep tables ($500–$1,500 each). Don’t forget smallwares—pots, pans, utensils, and storage containers—which add $5,000–$15,000 for a modest setup. Used equipment from restaurant liquidations can cut these costs by 40–60%, but factor in $500–$2,000 for reconditioning and delivery. Plan for a 10–15% contingency on all equipment to cover unexpected replacements or upgrades.

Permitting & Inspection Costs

Permitting for a shared kitchen buildout typically runs $5,000–$25,000, depending on your local health department and fire marshal requirements. Expect separate fees for plumbing ($1,000–$5,000), electrical ($1,000–$4,000), and mechanical permits ($500–$2,000). Health department plan review fees add $500–$2,500. Factor in $2,000–$8,000 for professional plan stamps from an architect or engineer. Inspections often require multiple visits, so budget $500–$1,500 for reinspection fees. In cities with strict codes (like New York or San Francisco), permitting can take 3–6 months and cost 50% more than the national average.

FAQ

What is the typical cost range for a commissary kitchen buildout? Buildout costs vary wildly based on existing infrastructure. A second-generation restaurant space with hoods, grease traps, and drains already in place might run $50,000 to $150,000 for cosmetic upgrades and equipment. A raw shell buildout from scratch can easily hit $200,000 to $500,000 or more, depending on local code and utility hookups.

How much should I set aside for permits and inspections? Permit fees and inspection costs typically range from $2,000 to $15,000, depending on your city’s health department, fire marshal, and building code requirements. Plan for at least 5–10% of your total buildout budget to cover these, plus potential delays that can add soft costs.

What are the biggest hidden costs I should expect? The biggest budget busters are often hood system installation ($15,000–$40,000), grease trap and plumbing work ($5,000–$20,000), and upgrading electrical service for commercial equipment ($10,000–$30,000). Floor drains and waterproofing can add another $5,000–$15,000 if not already present.

How much does commercial kitchen equipment typically cost? A basic equipment package for a shared kitchen — including a range, oven, fryer, refrigeration, prep tables, and shelving — usually falls between $30,000 and $80,000. High-volume or specialized equipment (like combi ovens or blast chillers) can push that to $100,000 or more.

Should I budget for professional design and engineering help? Yes, and it’s often money well spent. Architectural and MEP (mechanical, electrical, plumbing) design fees typically run 8–15% of the total buildout cost, or roughly $5,000–$30,000 for a small to mid-sized kitchen. Skipping this can lead to costly change orders later.

How long does a commissary buildout usually take, and what are the soft costs? A straightforward buildout in an existing restaurant space might take 8–16 weeks, while a raw shell can take 4–8 months. During that time, soft costs like rent, insurance, loan interest, and lost revenue can add 10–20% to your total budget. Always pad your timeline and budget by at least 20% for unexpected delays.

Sources

CBRE, *Retail & Food Service Real Estate Insights* — restaurant and commissary buildout benchmarks
JLL, *Ghost Kitchen & Food Hall Market Report* — shared-kitchen economics and fit-out costs
Cushman & Wakefield, *Retail Sector and Restaurant Real Estate* — second-gen space value and TI norms
RSMeans Building Construction Cost Data — kitchen MEP, hood, grease-trap, and plumbing costs
NSF International / ANSI standards — commercial food equipment and sanitation requirements
NAIOP, *Retail and Specialty Tenant Improvement* — landlord capital and TI allowance practices
BOMA International — operating-expense passthrough and CAM standards
FDA Food Code / local health department plan-review guidelines — kitchen code and inspection requirements

Download:

![How Do I Budget a Commissary or Shared Kitchen Buildout?](https://www.thefoodcorridor.com/wp-content/uploads/2020/08/FC-Article-Image-Back-View-with-Text.jpg)

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# How Do I Budget a Commissary or Shared Kitchen Buildout?

## Direct Answer

Budget a commissary the way a smart operator does: **find a second-generation restaurant or food space and inherit the expensive bones** — the grease trap, hoods, gas service, and floor drains are the budget killers, and a building that already has them saves you **$100–$200 per square foot**. A commissary or shared/ghost kitchen buildout runs **$150–$450 per square foot** in raw space, but a second-gen restaurant conversion can drop to **$75–$200 per square foot**. The two systems that dominate cost: **the exhaust hood with make-up air ($1,000–$2,500 per linear foot installed, often $40,000–$120,000 total)** and the **utility upgrades** — a busy kitchen needs **400–1,200 amps**, gas service sized for ranges and ovens, and a **water heater and grease interception system** the building probably doesn't have. The single biggest money move: **never sign a raw-shell lease for a kitchen if a second-generation food space is available**, because retrofitting hoods, gas, and drainage into a cold shell is where budgets double. The second move: **make the landlord deliver the hood, grease trap, gas service, and floor drains as base building** or fund them through a **TI allowance ($50–$150 per square foot)** — these are permanent improvements that increase the property's value and outlast your tenancy. And get the **health department and building plan-check requirements in hand before you design**, because a layout that fails plan review costs you weeks and tens of thousands in redesign.

## Inherit The Expensive Bones (Second-Gen Wins)

![How Do I Budget a Commissary or Shared Kitchen Buildout? — Inherit The Expensive Bones (Second-Gen Wins)](https://image.pollinations.ai/prompt/high%20quality%20editorial%20business%20professional%20office%20photograph%20illustrating%20Inherit%20The%20Expensive%20Bones%20(Second-Gen%20Wins)%20How%20Do%20I%20Budget%20a%20Commissary%20or%20Sh%2C%20realistic%20magazine%20style%2C%20warm%20light%2C%20no%20text%2C%20no%20watermark?width=1200&height=675&nologo=true&model=flux&seed=19307)


The cheapest commercial kitchen is one that's already most of a kitchen. A **second-generation restaurant space** typically comes with the four most expensive elements already installed: the **Type I exhaust hood and make-up air**, the **grease interceptor** (sized **750–2,000+ gallons** for a commissary), **floor drains and a mop sink**, and **adequate gas and electrical service**. Inheriting these can cut a buildout from **$300 per square foot to $120**. When you tour a space, value it by what's already there: a working hood alone is worth **$40,000–$120,000**; a properly sized grease trap is **$10,000–$40,000** with excavation; gas service and a meter upgrade can be **$15,000–$60,000**. Even if the layout is wrong, keeping the hood and gas infrastructure where they are and designing the kitchen around them saves enormous money. The opposite mistake — falling in love with a pretty raw shell in a good location — means you pay full freight for every system. Walk the space with a **kitchen designer or MEP engineer** before you sign so you know exactly what you're inheriting versus building.

## The Real Cost Stack: Hood, Gas, Power, Drainage

![How Do I Budget a Commissary or Shared Kitchen Buildout? — The Real Cost Stack: Hood, Gas, Power, Drainage](https://image.pollinations.ai/prompt/high%20quality%20editorial%20business%20professional%20office%20photograph%20illustrating%20The%20Real%20Cost%20Stack%3A%20Hood%2C%20Gas%2C%20Power%2C%20Drainage%20How%20Do%20I%20Budget%20a%20Commissary%20or%20%2C%20realistic%20magazine%20style%2C%20warm%20light%2C%20no%20text%2C%20no%20watermark?width=1200&height=675&nologo=true&model=flux&seed=89445)


Price a commissary by its systems, not its finishes. The big line items: **exhaust hood + make-up air + fire suppression (Ansul) — $40,000–$120,000+**; **grease interceptor — $10,000–$40,000**; **electrical service and distribution — $30,000–$120,000** (kitchens draw **400–1,200 amps**, and shared kitchens with multiple tenants cooking simultaneously need more); **gas service and piping — $15,000–$60,000**; **plumbing, floor drains, and water heating — $40,000–$100,000** (commissaries need lots of hot water and **three-compartment sinks, hand sinks, mop sinks, and prep sinks**); **HVAC for kitchen heat and ventilation balance — $20,000–$80,000**; **walk-in coolers/freezers — $15,000–$60,000 each**; **NSF-rated equipment — $50,000–$250,000+** depending on stations. For a **shared/ghost kitchen** with multiple cook stations, multiply hoods, gas drops, and electrical sub-metering, but you also amortize one grease trap, one set of drains, and one ventilation system across many tenants — which is exactly why the shared model pencils. Don't skimp on **make-up air**: an undersized make-up air unit starves the hood, backdrafts the building, and fails inspection.

```mermaid
flowchart TD
    A[Need a commissary] --> B{Second-gen food spaceunder br/over available?}
    B -->|Yes| C[Inherit hood, grease trap,under br/over gas, drains - $75-200/sqft]
    B -->|No| D[Raw shell = full systemunder br/over retrofit $150-450/sqft]
    C --> E[Design layout aroundunder br/over existing hood + gas]
    D --> F[Push hood, grease trap,under br/over gas, drains onto landlord]
    E --> G[Health dept plan checkunder br/over BEFORE final design]
    F --> G
    G --> H[Build to NSF + code]
    H --> I[Inspections + open]
```

## How Not To Get Screwed By The Landlord Or Contractor

![How Do I Budget a Commissary or Shared Kitchen Buildout? — How Not To Get Screwed By The Landlord Or Contractor](https://image.pollinations.ai/prompt/high%20quality%20editorial%20business%20professional%20office%20photograph%20illustrating%20How%20Not%20To%20Get%20Screwed%20By%20The%20Landlord%20Or%20Contractor%20How%20Do%20I%20Budget%20a%20Commissar%2C%20realistic%20magazine%20style%2C%20warm%20light%2C%20no%20text%2C%20no%20watermark?width=1200&height=675&nologo=true&model=flux&seed=70359)


Food-space tenants get burned in specific ways. **Trap one: the raw-shell lease dressed up as turnkey.** A landlord offers "restaurant-ready" space that's actually a cold shell with no hood, gas, or grease trap — and a stingy TI allowance that won't cover them. Itemize what's actually delivered in the lease, and push the **hood, grease interceptor, gas service, and floor drains into base-building work or the TI allowance**, because these are permanent property improvements. **Trap two: the TI allowance that excludes the kitchen's guts.** Landlords offer a fat per-square-foot number, then exclude "specialty systems" — exactly the systems that cost the most. Define in writing that the TI covers hood, gas, grease, and drainage. **Trap three: signing before plan check.** Health and building departments have hard rules on hood coverage, sink counts, grease-trap sizing, and finishes; design without a **pre-submittal plan-check meeting** and you'll eat redesigns. Make rent commencement contingent on **permit issuance**. **Trap four: the contractor without restaurant experience.** Kitchen MEP and code are specialized — a generic GC will miss requirements and rack up change orders. Hire a **restaurant-experienced GC** and an owner's rep at **3–5%** of cost; use a **GMP contract** with written change orders. **Trap five: no free rent through the build.** A kitchen buildout plus inspections takes **3–8 months**; negotiate **free rent for the entire construction-and-permitting window** so you're not paying for a kitchen you can't legally cook in.

```mermaid
flowchart LR
    A[Landlord: restaurant-ready] --> B[Itemize what's deliveredunder br/over in the lease]
    B --> C[Hood, grease, gas, drainsunder br/at least base building or TI]
    C --> D[Rent starts at permitunder br/over issuance, not signing]
    D --> E[Restaurant GC + owner's repunder br/over 3-5%, GMP, written COs]
    E --> F[Free rent throughunder br/over build + inspections]
    F --> G[Open on budget, in code]
```

## Permitting, Code, And The Shared-Kitchen Angle

Commercial kitchens live or die by **health and building code**. You'll deal with **plan check, health department approval, grease-trap sizing rules, ventilation code, fire-suppression certification, and ADA**. Build the layout around mandatory elements: a **three-compartment sink**, separate **hand sinks** at each station, a **mop sink**, proper **floor finishes (quarry tile or sealed concrete with coved bases)**, and **washable wall surfaces (FRP)**. The **shared/commissary model** has a real financial edge: by renting time slots or dedicated stations to multiple food businesses, you spread the **$300,000–$1.5 million** capital cost across many tenants and turn a fixed buildout into recurring revenue at **$15–$35 per hour** or **$1,000–$3,000 per month** per station. If that's your model, design for **sub-metering, secure dry/cold storage per tenant, and access control**, and confirm your jurisdiction's rules for shared food facilities. Carry a **10–15% contingency** — kitchens uncover plumbing, gas, and code surprises behind every wall — and budget **commissioning and health inspections** as real line items, not afterthoughts.

<!--pillar-weave-->
## Related on PULSE

- [How does the 2027 trend of vendor consolidation force RevOps to rewrite commission plans based on shared data lakes?](/knowledge/q16615)
- [How do you document POC stage duration when Palantir Foundry is the buyer-mandated platform in multi-agency shared services deals using Salesforce?](/knowledge/q10529)
- [How do you qualify territory overlap when Palantir Foundry is the buyer-mandated platform in multi-agency shared services deals using Salesforce?](/knowledge/q10528)
- [How do you prevent loss reason capture when Palantir Foundry is the buyer-mandated platform in multi-agency shared services deals using Salesforce?](/knowledge/q10527)
- [What's the right approach to running deal-room collaboration with buyers — Slack Connect, shared Notion, or stay on email?](/knowledge/q220)
- [What Does a Commercial Kitchen Hood and Grease Trap Really Cost in a Buildout?](/knowledge/q13768)

## Equipment & Smallwares Budgeting

Beyond the big-ticket hood and grease trap, budget **$30,000–$80,000** for essential kitchen equipment in a shared kitchen: a commercial range ($2,000–$6,000), a double-stack convection oven ($4,000–$10,000), a walk-in cooler ($8,000–$20,000), and prep tables ($500–$1,500 each). Don’t forget smallwares—pots, pans, utensils, and storage containers—which add **$5,000–$15,000** for a modest setup. Used equipment from restaurant liquidations can cut these costs by 40–60%, but factor in $500–$2,000 for reconditioning and delivery. Plan for a **10–15% contingency** on all equipment to cover unexpected replacements or upgrades.

## Permitting & Inspection Costs

Permitting for a shared kitchen buildout typically runs **$5,000–$25,000**, depending on your local health department and fire marshal requirements. Expect separate fees for plumbing ($1,000–$5,000), electrical ($1,000–$4,000), and mechanical permits ($500–$2,000). Health department plan review fees add **$500–$2,500**. Factor in **$2,000–$8,000** for professional plan stamps from an architect or engineer. Inspections often require multiple visits, so budget **$500–$1,500** for reinspection fees. In cities with strict codes (like New York or San Francisco), permitting can take 3–6 months and cost 50% more than the national average.

## FAQ

**What is the typical cost range for a commissary kitchen buildout?**  
Buildout costs vary wildly based on existing infrastructure. A second-generation restaurant space with hoods, grease traps, and drains already in place might run $50,000 to $150,000 for cosmetic upgrades and equipment. A raw shell buildout from scratch can easily hit $200,000 to $500,000 or more, depending on local code and utility hookups.

**How much should I set aside for permits and inspections?**  
Permit fees and inspection costs typically range from $2,000 to $15,000, depending on your city’s health department, fire marshal, and building code requirements. Plan for at least 5–10% of your total buildout budget to cover these, plus potential delays that can add soft costs.

**What are the biggest hidden costs I should expect?**  
The biggest budget busters are often hood system installation ($15,000–$40,000), grease trap and plumbing work ($5,000–$20,000), and upgrading electrical service for commercial equipment ($10,000–$30,000). Floor drains and waterproofing can add another $5,000–$15,000 if not already present.

**How much does commercial kitchen equipment typically cost?**  
A basic equipment package for a shared kitchen — including a range, oven, fryer, refrigeration, prep tables, and shelving — usually falls between $30,000 and $80,000. High-volume or specialized equipment (like combi ovens or blast chillers) can push that to $100,000 or more.

**Should I budget for professional design and engineering help?**  
Yes, and it’s often money well spent. Architectural and MEP (mechanical, electrical, plumbing) design fees typically run 8–15% of the total buildout cost, or roughly $5,000–$30,000 for a small to mid-sized kitchen. Skipping this can lead to costly change orders later.

**How long does a commissary buildout usually take, and what are the soft costs?**  
A straightforward buildout in an existing restaurant space might take 8–16 weeks, while a raw shell can take 4–8 months. During that time, soft costs like rent, insurance, loan interest, and lost revenue can add 10–20% to your total budget. Always pad your timeline and budget by at least 20% for unexpected delays.

## Sources

- CBRE, *Retail & Food Service Real Estate Insights* — restaurant and commissary buildout benchmarks
- JLL, *Ghost Kitchen & Food Hall Market Report* — shared-kitchen economics and fit-out costs
- Cushman & Wakefield, *Retail Sector and Restaurant Real Estate* — second-gen space value and TI norms
- RSMeans Building Construction Cost Data — kitchen MEP, hood, grease-trap, and plumbing costs
- NSF International / ANSI standards — commercial food equipment and sanitation requirements
- NAIOP, *Retail and Specialty Tenant Improvement* — landlord capital and TI allowance practices
- BOMA International — operating-expense passthrough and CAM standards
- FDA Food Code / local health department plan-review guidelines — kitchen code and inspection requirements

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