If you’re involved in the CRE realm in any capacity, you know that industrial real estate has been on absolute fire since the pandemic. Industrial rental rates have doubled in the past thirty-six months. Landlords are lining their pockets and Tenants are emptying theirs. This has caused a mass movement of Tenants looking to either buy or build their own industrial facility for their businesses to occupy. I’ve had numerous industrial clients ask me about finding raw land for them to build on… but it’s never as easy as it seems. This blog post will highlight the current costs of construction, particularly for materials, labor, and site planning in North Carolina.
Material Costs: Key Figures
1. Steel and Metal
Steel is crucial for industrial buildings. As of 2024, fabricated structural steel costs between $1,200 and $1,500 per ton, significantly higher than pre-pandemic levels.
2. Concrete and Cement
Ready-mix concrete averages $125 to $150 per cubic yard, with prices varying based on location and specifications.
3. Lumber and Other Materials
Lumber has stabilized compared to pandemic peaks but is still higher than historical norms, at about $600 per thousand board feet. Insulation ranges from $0.90 to $1.50 per square foot, and electrical and plumbing components have also increased in cost due to supply chain issues.
Labor Costs: Regional Challenges
1. General Construction Labor
Average wages for construction workers in North Carolina range from $17 to $20 per hour, with higher wages now common due to labor shortages.
2. Skilled Trades
- Specialized trades are more costly:
- Electricians: $25 to $30 per hour.
- Plumbers: $24 to $28 per hour.
- HVAC Technicians: $22 to $26 per hour.
3. Project Management
Project managers and supervisors earn between $70,000 and $100,000 annually, reflecting the
complexity of industrial projects.
Site Planning Challenges and Cost
1. Zoning and Permits
Navigating local zoning regulations and securing permits can be complex and may cost anywhere from $5,000 to $25,000, depending on the project’s scale and location.
2. Environmental Studies
Some of these studies are Phase 1 ESA, Phase 2 ESA, Wetland Analysis, Stormwater Management Testing, Geotechnical Testing (soils), and floodplain analysis. This can cost anywhere from $2,500 to $50,000 depending on the scenario.
3. Land Preparation
This process involves multiple steps to ensure the site is ready for building. The site must be cleared, graded, and leveled before building commences. This can cost anywhere from $1 to $5 per SF.
With the rise in both materials and labor cost, building an industrial facility in NC averages from $225/SF to $325/SF. This means a 20,000 SF facility could cost anywhere from $4.5 million to $6.5 million. It’s important to consult a CRE broker that has the experience and knowledge with this process. There’s a whole lot more than what meets the eye. Rich Commercial Realty is happy to be a resource for any industrial business owner looking to buy or build their own facility.
Sources Used for the Article on Industrial Building Costs in North Carolina:
1. Carolinas AGC Construction Trends and Outlook (cagc.org) Link: https://www.cagc.org/cagcdocs/newsbreak/US-NC-Construction-trends-outlook-2024.pdf
2. Salary Data for Construction Laborers in North Carolina (salary.com) Link: https://www.salary.com/research/salary/alternate/construction-laborer-salary/nc
These sources provided the data for material costs, labor wages, and site planning expenses referenced in the article.
