What does it cost to design & build a Logistics / Distribution Center in the USA & around the world
Every day we hear news of major companies building new Logistics / Distribution Center in the USA & around the world. We are frequently asked this question by Owners, Developers, Architects & Engineers, Estimators, Quantity Surveyors & Construction Professionals around the world. To answer this question we have researched & collected “current day” costs from more than 15 countries.
There is no precise answer to the question posed, because there so are many variables to the Square Foot (SF) / Square
Meter (M2) unit final cost, such as:
- Current Site Conditions: What are the existing construction sites’ condition, i.e. does the site have to be worked on to remove existing buildings, utilities, obstructions, trees & bushes? Is the site reasonably flat? Will “engineered fill” be needed to be brought onto the site? Are existing utilities (water, sewers, gas, electricity) close by? If not, the cost of bringing these services onto the site could impact the final cost. Are there any soil / contaminated material conditions that need to be resolved? Is there a high water table? Is there any rock or concrete to be removed? Will piles be required? All of these issues could impact the final cost of the Logistics Center.
- Location of Logistics / Distribution Center: is the proposed location in a congested area that will impact material handling & delivery? or is Distribution / Logistics Center situated in the city suburbs with less material delivery & handling issues?
- Large or Small application: Typically the larger the usable footprint space the lower the unit Square Foot / Square Meter price will be.
- Materials Selection: Use of high end i.e. expensive construction materials or are middle of the road construction material & fixtures being utilized will impact the final construction cost.
- Contracting Approach: Is a Lump Sum – 3 to 6 bidders being considered, or a single source Negotiated Contract, Construction Schedule is Distribution / Logistic Center a fast track project, i.e. the Owner wants the facility ASAP, perhaps overtime pay or shift work will be required, or will the construction effort utilize a “normal” 40 hours per week / 5 days a week approach & the local construction bidding climate in this particular location. Is there a lot of construction activity in this city, an extremely active construction market tends to drive construction costs up & increase contractors profit margins.
- Union or Non-Union Labor: This applies predominantly in the USA, where the vast majority of construction in the largest 20 cities is executed by Union Labor, which on average is 15% to 25% more expensive than Non-Union labor (Open Shop).
- Distribution / Logistic Center – (1 floor – 20’ to 30’ high) Total Usable Footprint Space 250,000 SF to 500,000 SF / 23,250 M2 to 46,500 M2 1st Q 2020 Cost Basis.
- Costs are based on a suburban city location (average 7 to 15 miles outside main city center).
- Excludes bar coding computers, scanners & equipment, conveyors, sorting equipment, shelving & robotic pickers.
- Excludes construction work outside of building, such as roads, parking areas, fencing & security gatehouses.
