Cost to Build a Warehouse

Determining the cost of building a warehouse by construction method

How much does it cost to build a warehouse - construction guide and options

How much does it cost to build a warehouse?

The average turnkey cost to build a warehouse ranges from $20 to $60 per square foot. Typical costs can vary, with a small 30x40 warehouse costing $35,000 to a 50,000-square-foot distribution center costing over $1M.

Final costs largely depend on design complexity, materials used, and the intended application.

For example, a basic warehouse for storing non-perishable goods in a moderate climate will be considerably more affordable than a cold storage facility in an area with high summer temperatures.

Let's dig in and cover some of the basics to give you a rough idea of what a new warehouse might cost.

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The Main Factors that Affect Warehouse Cost

Several factors can affect warehouse construction costs, some of the most significant include the following:

Size: The size of the warehouse will significantly impact the overall cost. Larger warehouses will require more materials and labor and may also require more specialized equipment and professional services.

Location: The location of the warehouse can also affect the cost, as materials and labor may be more expensive in some areas than others.

Materials: The materials used to construct the warehouse will also affect the cost. Different materials have different price points; some may be more expensive to maintain or upgrade over time. For example, concrete, glass, and insulated metal panels (IMPs) are considerably more expensive than standard metal wall and roof panels.

Design: The design of the warehouse, including the roof style and layout, will also affect the cost. More complex designs may require more materials and labor and may also require additional engineering and design time.

Intended use: The intended use of the warehouse will also impact the cost. For example, a warehouse used for storage only may have different requirements than a warehouse used for manufacturing or distribution.

Finally, any additional features or amenities included in the design of the warehouse, such as refrigeration units or advanced security systems, can also affect its overall cost.

Warehouse Construction Costs by Building System

Several methods can be used to construct a modern warehouse facility, including pre-engineered building construction, tilt-up construction, and conventional steel-frame construction.

Pre-engineered metal building (PEMB) construction involves using prefabricated components that are bolted together on-site to form the structure of the warehouse. This method is often faster and more cost-effective than other construction methods, but it can have limitations in terms of design flexibility. For additional details, see our page on pre-engineered warehouses.

Typical average PEMB build cost: $20 to $35 per square foot

Tilt-up construction involves pouring concrete onto a horizontal surface and then tilting it up into position to form the warehouse's walls. This method is also relatively fast and cost-effective but may not be suitable for larger warehouses or those with complex designs.

Typical average Tilt-up build cost: $40 to $55 per square foot

Structural steel-frame construction (weld-up) involves using steel beams and columns to form the frame of the warehouse, which is then filled in with other materials, such as concrete or masonry, to form the walls and roof. This method is more flexible in terms of design and can be used to construct larger and more complex warehouses, but it is also more labor-intensive and costly compared to the other methods.

Typical average structural steel build cost: $45 to $60 per square foot

Please note. These estimates are based on single-story construction in the range of 16 to 30 feet. PEMB buildings are most economical in this height range, buildings over 30 feet in height require additional engineering.

Construction workers discussing warehouse construction cost for a PEMB building

PEMB Warehouse Under Construction

Sample Warehouse Cost by Size

Here are some rough PEMB construction estimates for popular warehouse sizes.

Square Feet Estimated Cost Cost per Sq Ft
1,200 sq ft $33,600 $28/sq ft
2,400 sq ft $62,200 $26/sq ft
5,000 sq ft $120,000 $24/sq ft
10,000 sq ft $230,000 $23/sq ft
20,000 sq ft $450,000 $23/sq ft
50,000 sq ft $1,150,000 $23/sq ft

As indicated earlier, several factors will affect these estimated costs. For accurate written quotes, we recommend the following:

  • Speaking with a local structural engineer to get estimates for site preparation, foundation work, etc.,
  • working closely with your chosen building supplier on design requirements, and
  • speaking with your local building department about the building permit application process and associated fees

See our build process page for additional details on planning, design, and construction.

 

To get warehouse estimates for different-sized buildings, see our metal building prices page

Other Cost Considerations

Some other costs may also need to be considered and factored into your budget - these will ultimately depend on your intended application.

  • Insulation. Will insulation be required? If so, what type? Your GC (or HVAC company) will be able to advise on this.
  • Climate & Environmental Control. HVAC systems will need to be specified by an engineer for your intended warehouse.
  • Doors. How many doors will be required, what type, and what size? 
  • Loading Docks. How many and what size will be required for your deliveries and dispatch?
  • Interior Finishing & Build-Out. Will office space be required? Lunch/break rooms? Bathrooms etc.

 

modern warehouse construction cost comparison

Modern Warehousing Facility with MIP Wall System

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Planning & Construction

Planning a prefabricated steel warehouse building is costly and needs to be planned carefully.

Today, warehouse designs have advanced greatly in their development, creating options that weren’t previously available. A pre-engineered building manufacturer will provide features for planning and constructing a painless process with sample plans and designs for your proposed warehousing requirements.

A few key factors you must consider before actually constructing your steel warehouse building are:

Building Code. Make sure you know your local code information. This can be done by calling your local building department and informing them of your intended use and details of the building to erect. You will be required to provide engineered building plans, foundation plans, and a site plan indicating access routes and the exact location of your building on the building plot. As the customer, it is up to you to give the metal building supplier the final code information. It’s also a good idea to look into the setbacks and other code information that may prohibit using a metal building or any building on a given lot.

Warehouse Size. When choosing a warehouse size, it is important to consider factors such as the amount and type of inventory to be stored, the number of employees who will be working in the warehouse, and the amount of space required for equipment and other facilities.

It is also important to consider future growth and expansion when choosing the size of the warehouse. If future expansion is possible, you will need to specify 'expandable end walls' when ordering your building.

The size of the warehouse should also be based on the size of the vehicles that will be used to transport goods in and out of the warehouse, as well as the size and layout of the surrounding area. In general, it is best to choose a warehouse size that is large enough to accommodate current and future needs but not so large that it is inefficient or costly to maintain.

Not sure how much space you need? Use this calculator to determine the amount of square footage needed for pallet racking.

When it comes to height, there are two main aspects:

  • Overall height measured on the outside (eave height), and
  • Interior clearance height

Zoning laws regulate the overall height, but the clearance height will likely impact your design decisions more. At the low end, 16' to 20' clearance is adequate for small to medium-sized warehouse applications. Please be aware that most PEMB structures are limited to heights of 30 feet without special (expensive) engineering.

Roof Profile & Pitch

Typically, warehouses will have a single-slope roof profile with a 1:12 or 2:12 pitch, as this is generally the cheapest roof system option. Make sure you look at both the shape and the pitch of the roof, as rigid frame metal buildings can come with several roofing options, and you want to ensure you get the roof that best suits your needs whilst complying with any local restrictions.

See our metal building roofs page for more details.

Once the design of your building has been established, there are a few more things to consider before the actual building begins, and can include:

Engineering. Once the basic design is complete, and you've paid a deposit, a certified engineer needs to create the specifications and blueprints for the building. The blueprints will specify what materials should be used and what loads the building will need to be able to withstand to meet local building codes.

Fabrication and Delivery. After the blueprints are signed off on, the real production begins. The primary and secondary steel framing components and the siding and roofing panels are all produced at the factory and then shipped to your construction site. The parts are pre-cut to the exact dimensions you need, pre-drilled, and ready to be bolted together by your erection crew. This step can take four to sixteen weeks (depending on the complexity of the structure), so factor in this time when considering the overall construction timeline.

Sitework. While the components are being manufactured, the building site can be readied. Steel buildings require foundations, which are usually poured concrete.

 

See our main warehouse page for a complete guide to planning, designing, and constructing a warehouse.

Calculating the cost of a warehouse construction project

6 Ways to Reduce Warehouse Build Costs

Here are some potential ways your organization can help reduce costs associated with a new build. Again, these may or may not apply to your particular storage requirements.

  1. Thorough planning. As with any major project, detailed planning will help negate expensive change orders and reduce the cost of overruns. Adhering to a strict timeline could also allow you to reduce costly construction financing loans.
  2. Reduce design complexity. A simpler design is recommended as it will require less material, design time, and engineering time compared to more complex designs.
  3. Choose a simple roof profile & low pitch. The most affordable option is a single-sloped roof with a 1:12 pitch. More complex roof designs, such as gable and hip roofs, require additional materials, engineering, and construction time, resulting in higher costs. A gable roof with a 2:12 pitch is a good alternate option.
  4. Reduce the height of the warehouse. Try to be realistic on the height requirement; taller buildings require more steel, which will impact cost and increase heating and cooling costs.
  5. Plan for Future Expansion. Steel buildings can be easily expanded in the future if you order 'expandable end walls' on the initial design. If you do not specify this on your order, it will be much more expensive to add additional bays later on because it will require extra engineering work.
  6. Compare Quotes. The cost of a pre-engineered metal building package can vary depending on the manufacturer and location. It is advisable to get at least four written estimates from different suppliers to compare prices. This is where BuildingsGuide can help; specify your requirements in our simple quote form, and we will match you with four vetted suppliers who deliver to your job site.

Is it cheaper to buy or rent a warehouse?

Buying or renting a warehouse will depend on your specific business needs, financial situation, and long-term goals. Here are some factors to consider when deciding which option is best for you:

  1. Cost: Buying a warehouse outright may be more expensive upfront, but eliminating ongoing rental payments could save you money in the long run. Renting a warehouse may be more cost-effective in the short term, but it may not provide the same long-term financial benefits as owning the property.
  2. Investment. A timely land purchase could benefit your business if local land values increase, and you have the opportunity to capitalize on this with a sale or lease arrangement.
  3. Flexibility: Renting a warehouse may give you more flexibility to move or expand your operations as needed, while owning a warehouse may require more planning and commitment.
  4. Location: The location of the warehouse may also be a factor in your decision. Buying a warehouse may be a good investment if you plan to operate in a specific area for the long term. However, renting may be more practical if you are unsure of your long-term plans or if you need to be located in a specific area for only a short period.
  5. Financing options: If you are considering financing the purchase of a warehouse, you will need to consider the terms of the loan, including the interest rate, repayment period, and any fees or closing costs. Carefully review the terms of any financing arrangement to ensure that it meets your needs and is affordable.

Ultimately, deciding to buy or rent a warehouse will depend on your specific needs and goals. It may be helpful to consult with a financial advisor or real estate professional to determine the best option for you.

Other Common Questions

  • What is the life expectancy of a metal-frame warehouse?

    A metal-framed warehouse can last for 50 years or more, depending on the quality of the steel components used, the design and construction of the building, and how it is maintained. Proper maintenance, including regular inspections and repairs, can help extend the lifespan of a steel warehouse.

    For peace of mind, most manufacturers offer 30 to 40-year warranties on the structures they sell.

  • Do we need to hire an architect?

    This will largely depend on the size and complexity of your proposed warehouse. For smaller warehouses in the range of 1,200 to 10,000 square feet, you can generally rely on your chosen building supplier to assist with the design process. You are strongly advised to engage an architect to work alongside your structural engineer for large, complex design projects. 

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