How much do these things cost to build?

I am not a contractor or construction veteran but I can comment high-level on what I've seen/been through.

Most recently: Here is a "soft quote" budget I got for a 4-story, ~85k gross SF (would be ~64k rentable SF) facility with an EIFS (fake stucco) exterior and underground detention...

This is pretty expensive for a suburban project in the sunbelt, but at 85k gross SF, a contractor might tell you that you could still save a little by going bigger (yes, for a lot of guys that is not a big project). And not to do underground detention or go 4 stories! That extra 4th floor adds cost PSF that you don't get with 2 or 3.

Here is a budget for one in the same metro that is fully designed and properly bid out, i.e. this budget is not a “swag.” Same as above, i.e. 4-story with underground detention and EIFS exterior. Only difference? Much bigger, so instead of $90/GSF, you’re at 88:

All this is much higher than what I built for a few years ago.

The good news is, some of these costs have softened a bit. I got an estimate for that same project above, from the same contractor, in 2023 and it came in at $94/GSF, or 7% higher. Granted, that 2023 estimate was based only on civil drawings (horizontal design), not architectural drawings (vertical), but we had enough information that I considered it a serious budget. Another contractor estimated $97/GSF!

Here is what I actually spent on a 3-story, 66k gross SF (49k RSF) with an EIFS exterior.  

Two things worked against us.  There was a pretty substantial concrete retaining wall out front, and 66k GSF is “small” for a multistory project.

Ok, enough multi-story. Here is a basic SINGLE-story metal building. Cheap metal exterior. Climate-controlled. Started 2022. Guess how much PSF?

The answer horrified me:

Massively higher than the GC himself expected/quoted before it was fully designed. And roughly 48% more PSF than this beauty we finished just a couple years before with the same GC in the same MSA:

A few possible reasons the single-story project cost so much. That area was a small metro in the deep South that had experienced explosive growth and had a “limited subcontractor base” to quote the project manager I used down there. The area was bursting at the seams, e.g. cheap apartments had gotten crazy expensive, but the class of working people to support this growth wasn’t very big.

Perhaps more importantly, the single-story project was inefficient. It was an expansion of an existing single-story facility and because of the way the parcels were laid out, it was really 3 different projects with an average of 19k SF, where each project had its own substantial detention pond. A ton of sitework for not much square footage, so I learned that single-story can cost just as much as multi.

Also, every building had to be sprinklered.

Takeaway:
If a multistory building is 75% “efficient” and a single-story building is 78% “efficient,” then the $90/sf building is actually $120 per rentable SF, and the $89/sf single-story building is actually $114 per rentable SF. Obviously that excludes significant money spent on land, soft costs, carry costs during lease-up, etc.

Before you know it, your basis is in the high 100s/sf. For various reasons, this is not workable in most places today.

As of right now I’m in predevelopment on a couple projects that will be much cheaper, partly because I lucked into more “workable” sites. One is a single-story 76k gross SF building in a jurisdiction where they aren’t requiring us to adhere to the expensive federal energy codes that have to do with insulation etc. And, the GC, whom I fell ass-backwards into, is based 30 minutes from the site, has his own sitework crew, and has other tricks up his sleeve.

That one is just about fully designed.

The other has some slope to it, but is big enough and cheap enough that I’m planning to do single-story buildings “stepping” down the hill (note: try to avoid retaining walls!). It is also big enough to do a bunch of cheap non-climate buildings, which take up a bunch of space because of the drive aisles.

We’ll see how that goes 🤞