2025 Industrial Construction Cost Guide

KeyFindings

Commodity prices have begun to experience upward pressure but increases remain uneven.

Labor costs continue to rise amid uncertainty and a limited talent pool.

Construction cost increases across industries remained below their 10-year averages across the Americas.

Softer industrial demand in the Americas has led to a smaller construction pipeline, fewer new deliveries, and more repurposing of existing industrial buildings.

Despite declining activity, construction remains robust in several markets across the Americas, including Dallas-Fort Worth, Phoenix, Toronto and Monterrey.

A flight to quality among large warehouse occupiers means that leasing absorption is stronger in newer construction.

Construction costs for new warehouses have remained stable YOY. • Small ground-up construction projects (109,200 rsf) averaged $139 per square foot (psf), a 1.9% YOY decrease, due to lower base building architectural costs. • Medium-sized warehouses (476,400 rsf) averaged $85 psf, down 1.0% YOY, also driven by reduced architectural costs for base building construction. • Large project (901,000 rsf) costs increased slightly, ticking up 2.0% from 2024 levels to $77 psf. While base building architectural costs declined, increases in other categories like site work and base building MEP were not enough to offset these reductions.

2025 Industrial Construction Cost Guide 5