How Do I Budget a Commissary or Shared Kitchen Buildout?

Curated by Kory White · Fractional CRO, CRO Syndicate

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📅 Published Jun 21, 2026

Don’t get screwed.</text><text x="58" y="258" font-family="Arial,Helvetica,sans-serif" font-size="30" font-weight="600" fill="#6b5b4d">Leases, TI, NNN & buildouts — negotiated in your favor</text><g transform="translate(1010,86)" fill="none" stroke="#C0531F" stroke-width="9" stroke-linejoin="round"><rect x="20" y="40" width="150" height="130"/><line x1="20" y1="40" x2="95" y2="6"/><line x1="170" y1="40" x2="95" y2="6"/><rect x="50" y="80" width="36" height="36"/><rect x="104" y="80" width="36" height="36"/><rect x="74" y="128" width="42" height="42"/></g></svg>

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)

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.

flowchart TD A[Need a commissary] --> B{Second-gen food space available?} B -->|Yes| C[Inherit hood, grease trap, gas, drains - $75-200/sqft] B -->|No| D[Raw shell = full system retrofit $150-450/sqft] C --> E[Design layout around existing hood + gas] D --> F[Push hood, grease trap, gas, drains onto landlord] E --> G[Health dept plan check 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

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.

flowchart LR A[Landlord: restaurant-ready] --> B[Itemize what's delivered in the lease] B --> C[Hood, grease, gas, drains = base building or TI] C --> D[Rent starts at permit issuance, not signing] D --> E[Restaurant GC + owner's rep 3-5%, GMP, written COs] E --> F[Free rent through 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.

FAQ

How much does a commissary or shared kitchen cost to build? Roughly $150–$450 per square foot in raw space, but a second-generation restaurant conversion drops to $75–$200 per square foot because you inherit the hood, grease trap, gas, and drains. Those four systems, not the finishes, drive the budget.

Why does a second-generation space save so much? Because the most expensive systems are already installed: a working Type I hood ($40,000–$120,000), a sized grease interceptor ($10,000–$40,000), floor drains, and adequate gas and electrical service. Designing your kitchen around existing infrastructure routinely cuts cost by $100–$200 per square foot.

Who should pay for the hood, grease trap, and gas? The landlord, because hoods, grease interceptors, gas service, and floor drains are permanent improvements that raise the building's value and outlast your lease. Push them into base building or a real TI allowance ($50–$150 per square foot), and itemize exactly what's delivered.

What's the biggest permitting mistake? Designing and signing before a health-department and building plan-check meeting. Code dictates hood coverage, sink counts, grease-trap sizing, and finishes; skipping pre-submittal review means costly redesigns. Tie rent commencement to permit issuance.

Does the shared-kitchen model actually pencil? Yes — you spread a $300,000–$1.5 million buildout across many tenants paying $15–$35 per hour or $1,000–$3,000 per month per station, turning fixed cost into recurring revenue. Design for sub-metering, per-tenant storage, and access control, and confirm your jurisdiction's shared-facility rules.

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

Keep reading

<svg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 1200 340" role="img" aria-label="How Do I Budget a Commissary or Shared Kitchen Buildout? — PULSE Buildouts"><rect width="1200" height="340" fill="#EBE9DE"/><rect width="14" height="340" fill="#C0531F"/><text x="58" y="116" font-family="Arial,Helvetica,sans-serif" font-size="32" font-weight="800" letter-spacing="3" fill="#C0531F">PULSE BUILDOUTS · COMMERCIAL REAL ESTATE</text><text x="56" y="198" font-family="Arial,Helvetica,sans-serif" font-size="60" font-weight="800" fill="#2b2b2b">Save money. Don&#8217;t get screwed.</text><text x="58" y="258" font-family="Arial,Helvetica,sans-serif" font-size="30" font-weight="600" fill="#6b5b4d">Leases, TI, NNN &amp; buildouts &#8212; negotiated in your favor</text><g transform="translate(1010,86)" fill="none" stroke="#C0531F" stroke-width="9" stroke-linejoin="round"><rect x="20" y="40" width="150" height="130"/><line x1="20" y1="40" x2="95" y2="6"/><line x1="170" y1="40" x2="95" y2="6"/><rect x="50" y="80" width="36" height="36"/><rect x="104" y="80" width="36" height="36"/><rect x="74" y="128" width="42" height="42"/></g></svg>

# 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)

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.

```mermaid
flowchart TD
    A[Need a commissary] --> B{Second-gen food space<br/>available?}
    B -->|Yes| C[Inherit hood, grease trap,<br/>gas, drains - $75-200/sqft]
    B -->|No| D[Raw shell = full system<br/>retrofit $150-450/sqft]
    C --> E[Design layout around<br/>existing hood + gas]
    D --> F[Push hood, grease trap,<br/>gas, drains onto landlord]
    E --> G[Health dept plan check<br/>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

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 delivered<br/>in the lease]
    B --> C[Hood, grease, gas, drains<br/>= base building or TI]
    C --> D[Rent starts at permit<br/>issuance, not signing]
    D --> E[Restaurant GC + owner's rep<br/>3-5%, GMP, written COs]
    E --> F[Free rent through<br/>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.

## FAQ

**How much does a commissary or shared kitchen cost to build?**
Roughly **$150–$450 per square foot** in raw space, but a **second-generation restaurant conversion** drops to **$75–$200 per square foot** because you inherit the hood, grease trap, gas, and drains. Those four systems, not the finishes, drive the budget.

**Why does a second-generation space save so much?**
Because the most expensive systems are already installed: a working **Type I hood ($40,000–$120,000)**, a sized **grease interceptor ($10,000–$40,000)**, **floor drains**, and adequate **gas and electrical service**. Designing your kitchen around existing infrastructure routinely cuts cost by **$100–$200 per square foot**.

**Who should pay for the hood, grease trap, and gas?**
The landlord, because hoods, grease interceptors, gas service, and floor drains are permanent improvements that raise the building's value and outlast your lease. Push them into **base building** or a real **TI allowance ($50–$150 per square foot)**, and itemize exactly what's delivered.

**What's the biggest permitting mistake?**
Designing and signing before a **health-department and building plan-check meeting**. Code dictates hood coverage, sink counts, grease-trap sizing, and finishes; skipping pre-submittal review means costly redesigns. Tie rent commencement to **permit issuance**.

**Does the shared-kitchen model actually pencil?**
Yes — you spread a **$300,000–$1.5 million** buildout across many tenants paying **$15–$35 per hour** or **$1,000–$3,000 per month** per station, turning fixed cost into recurring revenue. Design for sub-metering, per-tenant storage, and access control, and confirm your jurisdiction's shared-facility rules.

## 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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Related in the library

How Do I Budget a Commissary or Shared Kitchen Buildout?

How Do I Budget a Commissary or Shared Kitchen Buildout?

Direct Answer

Inherit The Expensive Bones (Second-Gen Wins)

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

How Not To Get Screwed By The Landlord Or Contractor

Permitting, Code, And The Shared-Kitchen Angle

FAQ

Sources

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