Coffee Shop Buildout Guide: From Lease to Opening Day (2026)
A coffee shop buildout typically costs between $150,000 and $500,000 or more, depending on whether you are renovating an existing cafe space or starting from a raw shell. Construction alone runs $150 to $300 per square foot, with equipment adding another $30,000 to $100,000 on top. The full process, from signing your lease to pouring your first cup, takes six to twelve months when you account for design, permitting, construction, and inspections. Lease negotiation is where your budget begins. Tenant improvement (TI) allowances from landlords typically range from $10 to $60 per square foot for food and beverage spaces, and a strong negotiation can save you tens of thousands of dollars before you spend a dime on construction. The permit phase is the most common source of delays: building permits, health department plan review, fire marshal approval, and ADA compliance must all be coordinated in sequence. Equipment lead times for commercial espresso machines, refrigeration, and dishwashers add another layer of scheduling complexity. The most expensive mistakes happen when owners skip professional design, underestimate mechanical requirements (plumbing, electrical, HVAC, ventilation), or begin construction before permits are fully approved. Working with an experienced commercial buildout contractor who understands food and beverage code requirements is the single best way to protect your timeline and your budget.
How much does a coffee shop buildout cost?
A coffee shop buildout costs between $150,000 and $500,000 or more in 2026. Construction runs $150 to $300 per square foot depending on space condition and finish level. Equipment adds $30,000 to $100,000. Lease negotiation, permits, design, and pre-opening expenses bring total startup costs to $200,000 to $600,000 or higher for a full-service cafe with seating.
What a Coffee Shop Buildout Actually Involves
Opening a coffee shop is one of the most popular small business ventures in the Bay Area. The vision is appealing: a welcoming space, great coffee, a loyal neighborhood following. But between signing your lease and serving your first latte, there is a complex construction and permitting process that catches many first-time owners off guard.
A coffee shop buildout is the process of transforming a commercial lease space into a fully operational cafe. It includes interior construction, mechanical systems (plumbing, electrical, HVAC, ventilation), equipment installation, health department compliance, and finish work. Whether you are converting a former retail shop into a cafe or renovating an existing coffee space, the buildout phase is where your business plan meets physical reality.
This guide walks through every stage of the process, from lease negotiation to opening day, with current cost data and practical advice for Bay Area cafe owners.
Step 1: Lease Negotiation and Tenant Improvement Allowances
Your buildout budget starts at the lease table, not the construction site. The terms you negotiate before signing directly impact how much you will spend on construction.
Choosing the Right Space
The condition of your space determines the scope (and cost) of your buildout. There are three common starting points:
- Raw shell: Bare walls, concrete floor, no plumbing or HVAC. You build everything from scratch. This is the most expensive option but gives you complete control over layout and design.
- Second-generation restaurant/cafe space: Previously used for food service. Plumbing, grease traps, ventilation hoods, and electrical capacity may already exist. This can save $50,000 to $150,000 compared to a raw shell.
- Retail conversion: A former retail or office space. Basic utilities exist, but you will need to add food-service-grade plumbing, ventilation, grease interceptors, and upgraded electrical. Costs fall between a raw shell and second-gen space.
Negotiating Your TI Allowance
A tenant improvement (TI) allowance is money the landlord provides to help cover your buildout costs. For food and beverage spaces, TI allowances typically range from $10 to $60 per square foot.
Key factors that affect your TI negotiation:
- Lease length: Landlords offer more for longer leases (7 to 10 years) because they amortize the cost over the full term.
- Space condition: Raw shells often come with higher TI allowances because landlords know the buildout cost is substantial.
- Market conditions: High vacancy rates give tenants more negotiating power. In 2026, more than 265 million square feet of commercial space faces lease expirations nationally, creating favorable conditions for tenants.
- Your creditworthiness: Strong financials and business experience increase the landlord’s confidence in your ability to succeed.
For a 1,200 square foot cafe, a $40/sqft TI allowance provides $48,000 toward your buildout. That is a significant offset against total construction costs. Always negotiate the TI allowance, free rent period, and landlord work letter before signing.
Step 2: Design and Space Planning
Professional design is not optional for a coffee shop. Your layout must satisfy three competing demands: customer flow, operational efficiency, and code compliance.
Layout Priorities
A well-designed coffee shop floor plan addresses:
- Customer flow: Guests should be able to enter, queue, order, pick up, and find a seat without crossing paths with staff or other customers.
- Bar workflow: The barista station should follow a logical sequence: grinder, espresso machine, milk station, drink finishing area, handoff point.
- Back of house: Storage, prep area, dishwashing, and employee space need adequate square footage. Most owners underestimate how much room back-of-house operations require.
- ADA compliance: Accessible pathways, counter heights, restroom dimensions, and seating layouts must meet current ADA standards.
Technical Design Specifications
Coffee shop buildouts have specific technical requirements that general retail spaces do not:
- Electrical capacity: A small cafe may get by with 200-amp service, but most shops need 400 amps to support espresso machines, dishwashers, ovens, HVAC, and lighting. Upgrading electrical panels is one of the most expensive and time-consuming infrastructure changes.
- Plumbing: Commercial espresso machines, dishwashers, and sinks require dedicated water lines, drains, and often a grease interceptor.
- Ventilation: Even if you are not cooking food, you may need a Type I or Type II hood depending on your menu. Health codes in most Bay Area jurisdictions require mechanical ventilation for any food preparation area.
- Counter dimensions: Commercial countertops should be a minimum of 36 inches high. Under-counter refrigeration requires 33-inch-deep cabinets.
Investing in professional design before construction saves money. Changes on a screen cost nothing. Changes on a construction site cost thousands.
Step 3: Permits and Approvals
The permit phase is where most coffee shop timelines go off the rails. Multiple agencies must review and approve your plans before construction can begin, and each one operates on its own schedule.
Required Permits and Approvals
- Building permit: Covers structural work, electrical, plumbing, and mechanical systems. Plan review takes two to six weeks in most Bay Area cities, though some jurisdictions run longer.
- Health department plan review: The health department must review and approve your plans before construction starts. This process takes 30 to 90 days depending on your jurisdiction. You cannot begin building until this review is complete.
- Fire department clearance: Fire marshal review covers occupancy limits, exit pathways, fire suppression systems, and hood extinguishing systems.
- Conditional use permit (CUP): Some zoning districts require a CUP for food service operations. This can add weeks or months to your timeline.
- Business license: Required by your city before you can operate.
- Seller’s permit: Required by the California Department of Tax and Fee Administration for retail sales.
- ABC license: Required if you plan to serve beer, wine, or spirits. ABC licensing in California can take three to six months.
Permit Strategy
The most effective approach is to run permit applications in parallel wherever possible, rather than in sequence. Start your health department plan review and building permit application at the same time. Begin your ABC license application as early as allowed.
Budget $2,000 to $10,000 for permits, licenses, and insurance. Major Bay Area cities tend toward the higher end of that range.
Step 4: Equipment Selection and Procurement
Equipment is the second largest cost category in a coffee shop buildout, after construction. More importantly, equipment lead times directly affect your construction schedule.
Core Equipment and Costs
| Equipment | Cost Range |
|---|---|
| Commercial espresso machine | $5,000 to $30,000 |
| Espresso grinder(s) | $1,500 to $4,000 each |
| Batch/drip coffee brewer | $500 to $2,500 |
| Commercial refrigeration | $2,000 to $5,000 |
| Commercial dishwasher | $3,000 to $8,000 |
| Blenders | $300 to $2,000 |
| Ice machine | $1,500 to $4,000 |
| Water filtration system | $500 to $2,000 |
| POS system | $1,000 to $5,000 |
| Furniture and fixtures | $5,000 to $25,000 |
Total equipment budget: $30,000 to $100,000 for a modest shop. Larger operations with food prep capabilities can reach $150,000 or more.
Lead Time Warning
Commercial espresso machines from premium manufacturers can take six to twelve weeks to ship after ordering. Commercial refrigeration and dishwashers have similar lead times. Order your major equipment as soon as your floor plan is finalized. Do not wait until construction is nearly complete.
Coordinate with your contractor on equipment placement, utility rough-in locations, and delivery scheduling. Your espresso machine needs specific water line placements, drain locations, and electrical connections that must be built into the walls and floors during construction.
Step 5: Construction
With permits approved, equipment ordered, and a finalized design in hand, construction begins. The construction phase for a coffee shop buildout typically runs three to six months.
Construction Phases
- Demolition and site prep (1 to 2 weeks): Remove existing finishes, walls, and fixtures that do not align with your new design.
- Rough-in mechanical (2 to 4 weeks): Plumbing, electrical, HVAC ductwork, and gas lines are installed behind walls and under floors. This is the most critical phase for food service buildouts.
- Framing and drywall (1 to 3 weeks): Interior walls, soffits, and ceiling treatments are built.
- Finishes (2 to 4 weeks): Flooring, tile, paint, countertops, cabinetry, and lighting are installed.
- Equipment installation (1 to 2 weeks): Espresso machines, refrigeration, dishwashers, POS systems, and furniture are placed and connected.
- Final inspections (1 to 2 weeks): Building, health, and fire inspections are scheduled. Any corrections must be addressed before you receive your certificate of occupancy.
Construction Costs
Construction costs for a coffee shop buildout range from $150 to $300 per square foot, depending on scope and finish level.
| Space Type | Cost Per Sqft | 1,000 Sqft Total | 1,500 Sqft Total |
|---|---|---|---|
| Second-gen cafe (light renovation) | $100 to $175 | $100K to $175K | $150K to $263K |
| Retail conversion (moderate buildout) | $175 to $250 | $175K to $250K | $263K to $375K |
| Raw shell (full buildout) | $225 to $300+ | $225K to $300K+ | $338K to $450K+ |
These figures cover construction only. Add equipment, permits, design fees, and pre-opening costs for your total budget.
Total Cost Summary: $150,000 to $500,000+
Here is the full cost picture for a Bay Area coffee shop buildout:
| Category | Cost Range |
|---|---|
| Design and architecture | $8,000 to $25,000 |
| Permits and licenses | $2,000 to $10,000 |
| Construction | $100,000 to $350,000 |
| Equipment | $30,000 to $100,000 |
| Furniture and fixtures | $5,000 to $25,000 |
| Signage | $2,000 to $10,000 |
| Pre-opening (inventory, marketing, training) | $5,000 to $15,000 |
| Total | $152,000 to $535,000 |
Costs scale with square footage, finish level, menu complexity, and whether you are starting from a raw shell or second-generation space. Bay Area costs trend toward the upper range due to higher labor rates and stricter code requirements.
Common Mistakes That Blow Your Budget and Timeline
1. Skipping Professional Design
Owners who go straight to construction without professional space planning end up paying for changes mid-build. Moving a drain line after concrete is poured costs ten times more than placing it correctly on the plans.
2. Underestimating Electrical Requirements
Many first-time cafe owners do not realize their space needs 400-amp electrical service. Discovering this after the lease is signed means an expensive panel upgrade and potentially delays while the utility company schedules the work.
3. Ignoring Equipment Lead Times
Ordering your espresso machine after construction starts is a recipe for a delayed opening. Equipment should be ordered as soon as your floor plan is locked in.
4. Starting Construction Before Permits Are Approved
Beginning demolition or rough-in work before all permits are in hand can result in stop-work orders, fines, and forced rework. The health department, in particular, requires plan approval before any construction begins.
5. Choosing a Contractor Without Food and Beverage Experience
General commercial contractors may not understand health code requirements, grease trap sizing, hood ventilation standards, or the specific inspection sequences that food service spaces require. Hiring a contractor experienced in restaurant and cafe buildouts prevents the code compliance failures that cause failed inspections and costly rework.
Your Complete Coffee Shop Buildout Timeline
| Phase | Duration |
|---|---|
| Lease negotiation and signing | 2 to 6 weeks |
| Design and space planning | 4 to 8 weeks |
| Permit applications and review | 4 to 12 weeks |
| Equipment ordering | Concurrent with permits (6 to 12 week lead times) |
| Construction | 12 to 24 weeks |
| Final inspections and corrections | 1 to 3 weeks |
| Soft opening and staff training | 1 to 2 weeks |
| Total | 6 to 12 months |
Running design, permits, and equipment ordering in parallel is the key to compressing this timeline. A contractor who manages all three tracks simultaneously can save you months compared to handling each phase sequentially.
Why the Right Buildout Partner Matters
A coffee shop buildout is a commercial construction project with food-service-specific code requirements layered on top. Health department compliance, fire marshal review, ADA accessibility, mechanical ventilation, and grease management all demand specialized knowledge.
Custom Home brings design-build expertise to commercial buildouts in the Bay Area. Our process starts with full 3D visualization of your space so you can see the layout, finishes, and customer flow before construction begins. We handle all permitting, coordinate equipment installation, and manage your project on a timeline that respects your lease clock.
If you are planning a coffee shop buildout in the Bay Area, contact our team to discuss your space, budget, and timeline. We will help you get from lease to latte as efficiently as possible.
Frequently Asked Questions
How long does it take to build out a coffee shop?
A coffee shop buildout takes six to twelve months from lease signing to opening day. The breakdown is roughly one to two months for design, one to three months for permits, three to six months for construction, and two to four weeks for final inspections and soft opening. Second-generation spaces (previously a cafe or restaurant) can move faster because plumbing, electrical, and ventilation infrastructure may already be in place. Raw shell buildouts take longer due to the need to install all mechanical systems from scratch.
What permits do I need to open a coffee shop?
You will need a building permit for construction, a health department food facility permit, a fire department clearance, a business license, a seller's permit from the state, and potentially a conditional use permit depending on your zoning. If you serve alcohol, you will also need an ABC (Alcoholic Beverage Control) license. In the Bay Area, plan review for health department approval alone takes 30 to 90 days, so starting this process early is critical.
What is a tenant improvement allowance and how much should I negotiate?
A tenant improvement (TI) allowance is money the landlord contributes toward your buildout costs. For food and beverage spaces, TI allowances typically range from $10 to $60 per square foot, though amounts vary based on lease length, your creditworthiness, market conditions, and the landlord's desire to fill the space. A 1,200 square foot cafe with a $40/sqft TI allowance means $48,000 toward your buildout. Negotiate the TI allowance before signing the lease, as it is much harder to increase after the agreement is executed.
What are the biggest mistakes people make during a coffee shop buildout?
The most common and costly mistakes include underestimating electrical requirements (most cafes need 200 to 400 amp service), skipping professional design and going straight to construction, not verifying that the space has adequate plumbing and grease trap capacity, starting demolition before permits are approved, and failing to account for equipment lead times. Espresso machines and commercial refrigeration units can take six to twelve weeks to arrive after ordering. Building a schedule that ignores these lead times will push your opening date back.