How Much Does it Cost to Build a Warehouse

If you want to help your business grow and expand to different markets, you may decide that building a warehouse is the way to go. Your own company may also need more storage, or you may wish to replace your current facilities. Whatever the reason, building a warehouse facility is a serious undertaking. It is both financially and logistically demanding. Therefore, creating a thorough plan that involves a realistic budget and timeline is crucial. You also have to consider the type of equipment the facility will have and the technology you wish to implement. All of that needs to be factored into your calculations. So, to help you begin planning this massive project, we will attempt to tell you how much it costs to build a warehouse. 

What does the cost of building a warehouse depend on?

The cost of warehouse construction depends on several factors. These include:

• Materials
• Size
• Building specification
• The intricacy of the design
• Location

As you can conclude, there are many variables. Thus, the precise cost can be pretty challenging to predict. You would have to know the concrete details to know how much you will pay to build a warehouse.

Materials used for warehouse construction

The type of materials you use is the first determinant of the construction cost. There are a few options you can use, but the ones mostly considered are steel and concrete. If you decide to use steel to build a warehouse facility, you are looking at an affordable material that is highly durable. Insulated concrete can practically last forever, and it comes with the benefit of insulation.

Consider the following average costs per square foot of some of the most common options you can choose:

• Stud frames – $20-$40
• Tilt-up construction – $25-$40
• Steel frames – $10-$20

Steel frames are an affordable solution, but an added bonus is the speed of construction if you go with this option. Moreover, if you decide to move your facility, you can do so easily. In addition, if your warehousing needs change, you can easily expand them.

As for tilt-up concrete, it will make your warehouse insulated, so you won’t have to consider other insulation options. However, you won’t be able to move your facilities to another location or expand them. The only option for making your concrete warehouse bigger would be an extensive and costly construction project.

Single-story or multi-story warehouse

If you have a vast piece of land at your disposal, you can go with a single-story facility without compromising the available warehouse space. In this case, the costs of materials mentioned above will be accurate.

However, if the piece of land you plan to build a warehouse on is on the smaller side, you may need to go with a multi-story warehouse. In this case, the prices mentioned above don’t apply because the structure will be completely different. Nevertheless, you shouldn’t completely disregard this option because of the cost of construction. The fact that you have twice as much space to use or rent on a much smaller piece of land will quickly prove beneficial in terms of the cost-return ratio.

Size considerations

The size and use of the facility can significantly affect the construction cost. So, you will have to think carefully about how big a warehouse you need in terms of square footage, what the facilities will be used for, and what functions it will have to perform.

Consider the following to determine the best size of your warehouse:

• The current volume of goods that comes in and out of your facility
• The projected volume of goods that will move in and out of the warehouse
• Warehouse scaling needs and possibilities
• Your company’s distribution needs
• Design and location accessibility to staff members 

Building specifications

Besides the location, size, and design of the warehouse, you also have to consider what other requirements the structure must meet. Determining what the warehouse will be used for and which functions it needs to perform will help you decide whether it needs insulation and if it should be climate-controlled. Also, regular cooling and heating systems will suffice in some cases, but in others, you may need a more intricate approach to keep the warehouse climate-controlled.

For instance, if you need cold storage or humidity control, you will need to communicate it to your contractors and determine how much it will cost. This will dictate the type of materials necessary, which will affect the cost of building a warehouse.

Associated costs

Unfortunately, materials and contractors’ fees are not the only expenses you will have to cover. There are some more costs that come with warehouse construction. 

For example, a concrete foundation is necessary, and it usually costs about $6 per square foot. In addition, insulation, framing, and essential accessories can amount to $4 per square foot.

All in all, these additional costs can increase the cost of construction by 15-20%.

So, how much does it cost to build a warehouse all in all?

There can’t be a precise answer to this question due to many factors affecting construction costs. However, based on the material costs, the size of the facility, and the accessories necessary, the construction cost can be anywhere from $35 to $100 per square foot. We can also offer you two examples that will give you a general idea of how much it costs to build a warehouse.

The average cost of a small warehouse of around 1200 square feet will be approximately $25,000. This is a reasonable price and an excellent starting point if you are at the beginning of your warehousing business. If you go for steel frames, you can expand relatively easily and grow your business in place. 

However, larger distribution centers of between 50,000 and 60,000 square feet can cost anywhere from $750,000 to $1 million. It will largely depend on the materials used and the features the facility needs to have.

Final words

Although no one can tell you how much it costs to build a warehouse, knowing what variables will affect the price will help you come up with an approximate price. Without concrete plans and location, you are only looking at the possibility of rough estimates.