How Much Does It Cost to Build a Warehouse?

How Much Does It Cost to Build a Warehouse?

The average cost to turnkey a warehouse is $55-$70 per square foot, which does not include land or grading. That means, for example, a 10,000 sq ft warehouse will cost $550,000-$700,000 plus land and grading.

Find out how steel buildings can be complete 30% faster than traditional construction.

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Your company has finally outgrown its current space and you need a warehouse.

A new warehouse is an investment in your company, but how big of an investment is it?

We decided to give you a comprehensive guide to estimating your own warehouse project for budgeting.

Warehouse Cost by Size and Square Feet

For the purposes of this chart, we split the average cost to build a turnkey warehouse of $55-$70 per square foot down the middle, or $62.50 per square foot.

The chart below assumes all the trappings of building a warehouse, like warehouse lighting, parking lot, etc.

A basic storage building–which is a fairly simple metal box with concrete, steel building kit, building assembly, and little else–will cost closer to $19-$25 per square foot.

This price does not include land or grading and is only an estimate.

DIMENSIONS SQUARE FEET TURNKEY ESTIMATE
40x60
2,400 SF
$150,000
50x60
3,000 SF
$187,500
50x80
4,000 SF
$52,800
50x100
5,000 SF
$312,500
60x100
6,000 SF
$375,000
80x80
6,400 SF
$400,000
80x100
8,000 SF
$500,000
100x100
10,000 SF
$625,000
100x150
15,000 SF
$937,500
100x200
20,000 SF
$1,250,000
100x300
30,000 SF
$1,875,000
100x400
40,000 SF
$2,500,000
100x500
50,000 SF
$3,125,000
100x1,000
100,000 SF
$6,250,000

*Disclaimer: Prices provided for informational purposes only, and they do not constitute a quote. The design of your building, location specifics, local building codes, and building loads may affect your final price.

Warehouse Cost per Square Foot

Here’s a breakdown on the warehouse cost per square foot for estimating costs. 

The larger the building is, the lower the dollar per square foot cost tends to be.

  • Metal Building – $3.50-$15 a square foot
  • Shell (building, concrete, and assembly) – $19-$25 a square foot
  • Turnkey – $55-$70 a square foot
metal shop

How Much Does a Small Warehouse Cost?

A small warehouse is generally considered anything smaller than 5,000 square feet. 

The average cost per square foot is higher for smaller buildings due to the amount of steel versus space.

Conversely, the larger the building the lower the cost per square foot is lower because the amount of steel versus space is lower. 

Warehouses under 5,000 SF usually cost close to the shell (building, concrete, and assembly) price of $19-$25 per square foot because they tend not to include things like industrial lighting, up-scale ventilation, industrial HVAC, and office build-outs. If all of those things are included, it will cost $55-$70 a square foot on average.

5,000 Square Foot Warehouse Cost

A turnkey 50×100, or 5,000 sq ft, warehouse will cost around $312,500 plus land and grading, but a number of factors affect the cost.

The shell (building, concrete slab, and erection) will cost approximately $100,000 or $20 per square foot.

The steel building will usually run you between $7-$12 per square foot, or $35,000-$72,000.

A 5,000 square foot building is a decent size for a small to lower-medium sized business.

Cost to Build 10,000 Square Foot Warehouse

A turnkey 10,000 square foot or 100×100 warehouse will cost about $625,000 plus land and grading.

A 10,000 sq ft warehouse shell will run close to $200,000.

The steel building is generally $6-$10 a square foot, or $60,000-$100,000.

SPECIAL NOTE

The concrete and erection prices tend to go up from the typical $5.50/SF erection and $6.50/SF concrete in 10,000+ square feet warehouses because the crews will need to order larger equipment (ex. Upgrading from a 6,000-pound shooting boom forklift to a 10,000-pound) and have a larger crew than the standard 5-man band.

This tends to balance out with the falling square foot price of the steel building kit to around $20 per square foot.

Cost to Build 20,000 Sq Ft Warehouse

A turnkey 100×200, or 20,000 square foot, warehouse is around $1,250,000, plus land and grading.

Building the shell (building, concrete, and erection) will hit you for right close to $400,000.

The pre-engineered steel building will ballpark $5-$9 per sq ft, or $100,000-$180,000.

Cost to Build 50,000 Sq Ft Warehouse

60x100 concrete slab cost

The turnkey price for a 50,000 Sq Ft Warehouse runs right at $3,125,000, plus land and grading.

A warehouse shell of a 50,000 square foot warehouse is $1,000,000 on average.

The metal building by itself costs $4-$8 a square ft, or $200,000-$400,000.

How Much Does It Cost to Build a 100,000 Sq Ft Warehouse?

You’re looking at $6,250,000 on average to turnkey a 100,000 square foot warehouse, plus land plot and grading.

Building, concrete, and assembly together for a 100,000 square foot warehouse is around $2,000,000.

The steel building kit averages $3.50-$8 a square foot, or $350,000-$800,000.

Different Kinds of Costs to Consider

There are four types of costs associated with warehouse construction; hard costs, soft, costs, long-term costs, and financing costs

There are four types of costs associated with warehouse construction; hard costs, soft, costs, long-term costs, and financing costs.

If your building is going to require plumbing, electrical, HVAC, etc. that is not included in this average cost and would constitute an extra expense.

Hard Costs

Hard costs include the “brick-and-mortar” costs of building a warehouse. 

For example, materials, labor, electrical, plumbing, sewer, grading (aka leveling), HVAC, parking lots, and LEED certifications.

This is usually what businesses mean when they ask, “How much does it cost to build a warehouse?”

It is, however, only one of 4 categories of costs.

SPECIAL NOTE

The “turnkey”, “shell”, and “steel building kit” estimates on this page only account for hard and soft costs.

Soft Costs

Soft costs are the purchases like permits, insurance, legal fees, architectural drawings, engineering, taxes, non-permanent furniture (chairs, desks, etc.), movable equipment (ex. forklift), and any other costs not related to hard costs.

Long-Term Costs

complicated assembly cost

The long-term cost of warehouse construction includes your utility bills, ongoing maintenance, and upkeep. 

The lifetime cost of a warehouse will swing wildly based on these factors. Your electric bill in particular can be severely reduced by upgrading the insulation of your warehouse.

It costs more upfront but reduces your monthly bill. 

It’s worth doing the math to find the breakeven point of upgraded insulation versus the reduced monthly bill. 

If it’s less than 10 years, it is probably worth doing. 

Here is a calculator to see where your break-even point is.

Financing Costs

Financing costs are how much you pay the bank in borrowing expenses associated with your construction loan.

The lower your interest rate and fees, the lower your financing charges.

How Big is an Average Warehouse?

The size of your warehouse has a direct impact on the final price you pay for your project.

According to data from the Energy Information Administration, the average square foot size of a warehouse in the United States is 16,400 square feet.

Warehouse and Storage Sizes Chart

SQUARE FEET NUMBER (IN THOUSANDS) PERCENT
1,001 to 5,000
380
49.41%
5,001 to 10,000
180
23.41%
10,001 to 25,000
142
18.47%
25,001 to 50,000
49
6.37%
50,001 to 100,000
24
3.12%
100,001 to 200,000
13
1.69%
200,001 to 500,000
7
0.91%
Over 500,000
1
0.13%

However, that includes ALL the nearly 800,000 “warehouse and storage” buildings that have been built in the last 100 years, which is not especially helpful.

It also includes “storage” which is a catch-all term including vehicle parking, small shops, and attic-like storage buildings that we would not normally call a “warehouse”.  

So, here is something a little closer.

According to a study done by CBRE, the average size of warehouses built from 2012-2017 was 184,693 square feet, and that number is going up every year.

Warehouse Concrete Foundation Cost

All warehouses require a concrete foundation to anchor the building.

It is not a uniform concrete slab, like one a house would have.

It has concrete footers that are specially engineered with rebar to support the wind, snow, and seismic activity in the local area.

It typically costs $6-$7 per square foot for the 4-inch concrete foundation of a warehouse which includes the concrete, forming, pouring, and finishing.

As we noted above, this can go up when a warehouse is larger than 10,000 ft.², because of the additional manpower and equipment necessary.

Also, if you need thicker concrete, it will cost more.

Warehouse Erection Cost

Steel building assembly is also called “erection”, “construction”, and “assembling”.

They all mean the same thing.

On average, it costs $5-$6 per square foot for construction by a 5-man erection crew with a 6,000-pound boom forklift.

For most steel buildings, the assembly takes only a few days. Larger buildings may take 2 to 3 weeks depending on the design.

Other Costs to Consider

Some other costs to consider are the charges for shelving, racking, equipment, security, forklifts, and specialized systems you may want in your warehouse.

You may also want to think about warehouse automation. This can include robots, software, and automated package retrieval systems.

Most of these things fall outside of the construction cost considerations and would kick up the cost of your entire warehouse construction project.

How Are Warehouses Built?

This question could have many answers. Here are 2 answers for the most likely reason to ask such a question.

In 4 Phases

4 phases of construction: intiation, pre-construction, construction, post-construction

Building a warehouse is an enormous project. Construction projects broadly break down into 4 distinct phases. 

  1. Initiation – This entails a feasibility study. It basically asks if the timeline, budget, and work scope all make sense together. For example, it would make no sense to expect to build a 1M square foot warehouse in 1 week, but it would make sense to expect to build an 8×8 garden shed in a week.
  2. Pre-Construction – This includes permits, design, hiring a General Contractor, and procurement (aka. getting the stuff).
  3. Construction – You finally break ground and start physically building your warehouse here.
  4. Post-Construction – This includes demobilization, punch lists, and documentation closeouts. 

With Steel

According to the Metal Building Manufacturer’s Association, 95% of new industrial construction uses metal framing. 

It dominates the industrial warehouse market.

The steel is a pre-engineered red iron steel building with I-beam columns and rafters, metal girts and purlins, and metal cladding (roof and wall panels). 

Here is a picture with labels of the various elements of a pre-engineered metal building used for warehouses.

anatomy of a steel building kit, warehouses

How Long Does It Take to Build a Warehouse?

How long it takes to build a warehouse matters, because it directly influences how expensive your building project is. 

According to data from the World Bank, it took an average of 81 days to build a warehouse in the United States in 2019 (data still being aggregated for 2020)

They define the “building time” as, “the number of calendar days needed to complete the required procedures for building a warehouse.

Your actual mileage may vary based on design, rezoning, grading, weather, size, interior build-out requirements, and changes to design made by you or by your local government. 

Knowing nothing about your particular project, 81 days seems like a fair average of the time. 

Your building size will be a key determining factor for the timeline. A small warehouse will take less than 81, and a large warehouse will take more. 

The complete project from initiation to final post-construction items can take 4 months to 3 years depending on a wide range of factors.

How the Government Affects Build Time (and Your Budget)

the goverment is slow
Credit: GoComics

One of the major reasons it’s hard to give a full project timeline is because of how often you’ll need to interact with local, state, and sometimes federal government entities.

73-Word Story Time

For example, we had a job for a client.

The inspector had been on site 5 times already and reported no problems.

Then, inspection #6 failed inspection because there wasn’t a port-a-potty on site.

There was no indication in the prior 5 visits nor in any publication that specified a port-a-potty was required.

Doesn’t matter.

The job site was shut down until a port-a-potty got there and the inspector verified it was there.

Government Communication Problems

There can be miscommunication from government employees in the same office.

One can tell your plumber it needs to be black and the next guy says white.

This confusion can hit you in the pocket book.

It Can Get Political

The larger your project, the more true this becomes.

Industrial warehouses affect a town’s aesthetic, demographics, tax revenues, infrastructure, and a thousand other things.

Those things affect the people that vote.

The people in office–or with aspirations to be in office–care about what voters think.

This can bend in your favor or against it. 

Ultimately, local politics can mean the difference between preventing you from building at all or rolling out the red carpet, both of which have a powerful influence on your final cost.

You Can Fail an Inspection

Not to mention, you’ll need permits and inspections that usually move at government speeds (which, in case our tone isn’t clear, means frustratingly slow).

Also, which inspector you get, when they come out, and even how well you get along with them might affect whether your warehouse gets a passing or failing inspection. 

A failing inspection can set your project back a few hours, a few weeks, or a few months depending on why you failed.

These delays can have tiny or major impacts on your project price.

How to Make Things Go Faster

how to make things go faster for your warehouse project with the government and inspectors

You can reduce a lot of these problems with: 

  1. A good feasibility study 
  2. Good lines of communication with the people inspecting and approving your building.

Types of Warehouses (and Their Cost)

This is a caveat to all the pricing on this page because the type of warehouse you are building affects the price per square foot

Here are a few of the most common types of warehouses and any adjustments you need to make in your back-of-the-napkin budgeting.

  1. Storage Warehouse – This post assumes this type of warehouse, all numbers apply.
  2. Office Warehouse – Office buildout costs $100-$200 per square foot on average. Since warehouses don’t tend to need high-end offices, the lower end of that scale is probably accurate.
  3. Cold Storage Warehouse – $150-$170 per square foot, on average.
  4. Data Warehouse – $170-$300 per square foot, on average. Though, there were rumblings that Google spent as much as $3,000 a square foot for a data warehouse.

Real Estate Costs for Building a Warehouse

It is annoying to be looking for pricing and only getting 75% of the picture.

The reason we don’t include “land and grading” in the prices above is because of how region-specific land is and how location-specific grading is.

For example, if you are looking for industrial property in Los Angeles it will be monumentally more expensive than the same plot in Commerce, GA.

The only way to know how much land will be in your area is to look at prices on sites like Loopnet.com.

Also note, that you may need to get the land rezoned.

How Much Does Grading Cost for a Warehouse?

how much does it cost to do the grading for warehouses
Grading for a warehouse in Georgia.

The reason it’s next to impossible to give even an average number is because the cost to grade your plot is 100% location-specific. 

But, here are some numbers.

It can cost anywhere from a few thousand to millions to grade (level) your lot, and here are some questions to ask to begin calculating the cost to level your land.

  • Is there a creek or a swamp? 
  • Do you need a retention pond? 
  • Do you need a retaining wall? If so, how big?
  • How many acres are being leveled?
  • Is it on a hill?
  • Is it rocks, hard clay, soft sand, or something else?
  • How many trees need to be cleared (and stumps ground)?

How to Reduce the Cost of Grading for Your Warehouse

We don’t want to leave you out there in no-man’s-land wondering about pricing. 

So, here is a description of the least expensive land to grade.

  • Already flat, or mostly flat
  • In a field with no trees
  • Has a natural water drainage path
  • The dirt is hard clay or something similar
cost to build a warehouse including cold storage, dry storage, and much more
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cost to build a warehouse including cold storage, dry storage, and much more
...so is this.

Conclusion

We hope this in-depth guide gives you all the information you needed to get started on your warehouse.

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