North America Industrial Construction Cost Guide 2023

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INDUSTRIAL CONSTRUCTION COST GUIDE 2023 NORTH AMERICA

INTRODUCTION Construction activity in the industrial sector has raced to keep up with robust demand of the last two years in North American markets. While industrial construction pipelines continue at historically high levels, the sector is facing several headwinds. Pandemic-related supply chain constraints, which helped drive commodities costs up, continue to have a lingering impact on overall costs and material lead times. A significantly higher interest rate environment in the United States provides additional upward pressure to costs. The fed rate is currently 4.25%-4.5% up from nearly zero in March 2022. As the sector faces a potential cooling down in 2023, we are closely monitoring the costs and material lead times which could allow projects more flexibility in their delivery timelines.

43 MARKETS IN NORTH AMERICA

The Guide includes comprehensive construction costs including all relevant trade codes, general conditions, fees and contingency. The Guide specifically excludes FF&E, IT, audio/visual, and security cost for the office component and soft costs or purchase of land for the overall industrial project.

2 NORTH AMERICA INDUSTRIAL CONSTRUCTION COST GUIDE 2023

C U S H M A N & WA K E F I E L D

KEY TAKEAWAY • Steel prices remain elevated at a 20% increase year-over year (YoY). Prices are forecast to drop slightly and level out over the next couple of years. • After reaching peak levels in 2021 Q2, lumber pricing has moderated, registering a 6% increase YoY. Pricing is forecast to level out but remain above pre-pandemic levels for the next few years. • Copper prices have faced significant volatility, but after hitting a peak at the beginning of this year, 2022 Q1, they have fallen 16% on a YoY basis. A modest drop in prices is forecast for 2023.

ECONOMIC OVERVIEW Strong demand for industrial properties, fueled in great part by the rise in e-commerce, has led to historic levels of construction in the sector. Competition for materials in a commodity constrained market, coupled with inflationary pressures, has driven construction costs higher across all real estate sectors. Commodities Pricing Update: Pandemic related supply chain constraints, which led to elevated commodities pricing, have begun to ease. Bottlenecks of container ships at ports are no longer the norm. According to FreightWaves, North American container ship traffic on November 23rd was down 60% from recent highs. Only 59 container ships were waiting for a berth. However, this was still above pre-pandemic levels, which were typically in single digits. The easing of traffic at ports may signal forthcoming easing of materials availability. That said, due to continued pent up demand, costs have not fallen to pre-pandemic levels. Concrete pricing has increased 14% from Q3 2021 and is currently at its peak pricing and YoY growth. Though pricing is unlikely to fall, the rate of growth will slow to more moderate levels in the next couple years.

COMMODITY PRICE INCREASES MODERATING Cost Index for Lumber, Steel and Copper

Forecast

Lumber

Steel (Pipe and Tube)

Copper

800

700

-16% decrease YOY

20% increase YOY

600

500

400

300

Cost Index

6% increase YOY

200

100

Source: U.S. Bureau of Labor Statistics (BLS); Moody’s Analytics Forecasted

CUSHMAN & WAKEFIELD

C U S H M A N & WA K E F I E L D

KEY TAKEAWAY Despite slower rate of cost contractor sentiment survey 1 , GCs generally expect costs to continue to increase in the next six months. 65% of GCs expect their costs to increase slightly (63%) to significantly (6%), while 76% expect their supplier prices to increase slightly (63%) to significantly (13%). This sentiment is more optimistic than a year ago when 96% of GCs expected their supplier prices to increase slightly (64%) to significantly (32%). escalation, according to the Cushman & Wakefield

Building Costs Moderate: Easing in materials pricing has led to slower increases of building costs. The annual change in the ENR building cost index was still elevated at 11.4% in 2022 Q3, though down from 15.4% the previous quarter. Building costs are forecast to ease next year and level out in the longer term. However, an influx of capital from the federal Infrastructure Investment and Jobs Act, the CHIPS Act and the Inflation Reduction Act will fuel continued construction growth in the near term, potentially delaying a return to pre-pandemic pricing. • A component of the ENR building cost index is skilled labor, which includes union wages plus fringe benefits for carpenters, bricklayers and iron workers. Skilled labor costs grew 3.5% YoY, their largest annual increase in 10 years, illustrating labor constraints and inflationary impact on wages. • Another important consideration in the coming quarters will be construction financing. In the current climate, it has become increasingly difficult to finance new projects. While this won’t necessarily impact projects already underway, it could have a dampening impact on the longer-term pipeline.

1 During the fall of 2022, Cushman & Wakefield surveyed over 50 general contractors across North America focusing on industrial projects. The survey gauged their sentiment on topics related to costs, labor and material lead times, among others.

CONTRACTORS AND SUPPLIERS ANTICIPATE RISING PRICES Cushman & Wakefield Construction Contractor Sentiment Survey, December 2022

Decreased Slightly Increased Slightly

No Change

Increased Significantly

100%

13%

16%

80%

44%

63%

60%

63%

40%

41%

20%

25%

19%

16%

13%

General Contractors

GC's Subs & Suppliers

General Contractors

GC's Subs & Suppliers

Past 6 Months

Next 6 Months

2 https://www2.deloitte.com/content/dam/Deloitte/global/Documents/About-Deloitte/deloitte-2019 millennialsurvey.pdf

Source: Cushman & Wakefield Research

4 NORTH AMERICA INDUSTRIAL CONSTRUCTION COST GUIDE 2023

NEW CONSTRUCTION STARTS ACCELERATED THROUGH 2022 Value of New Construction Starts: Non-Residential Buildings, 12-Month Trailing Average

$125,000 $150,000 $175,000 $200,000 $225,000 $250,000 $275,000 $300,000 $325,000 $350,000 $375,000 $400,000 Millions USD, SAAR

Non-residential building starts declined 19.9% from February 2020 to April 2021.However, industrial starts did not decline over this period. As of September 2022, non-residential starts rose 32.7% year-over year.

Source: Dodge Data & Analytics: New Construction Starts Report

KEY TAKEAWAY • Labor constraints will continue to impact construction employment in the near-term. An increase in retirements due to an aging workforce, coupled with a lack of young workers from the overall talent pool is impacting wages and costs as well as project timelines. The introduction of skills-based programs for young workers in addition to competitive wages may help fill the talent gap in the coming years. A recent survey by The Associated General Contractors of America (AGC) found that 70% of respondent firms plan to increase headcount in 2023, however, over 80% are having difficulty filling open positions. Additionally, the AGC survey indicates that companies will increase pay (72% of respondent firms), provide incentives and bonuses and increase their corresponding payment of benefit packages to retain and attract talent.

Employment and Construction: Non-residential new construction starts accelerated in 2022. After slowing from February to April 2021, starts accelerated and peaked in September 2022 at a 32.7% increase on a YoY basis. While increased materials costs did not slow starts in 2022, the addition of accelerated interest rate increases on financing could slow the growth as costs are compounded. • U.S. construction employment grew 3.8% YoY basis in 2022 Q3. Wages in the construction sector have risen at a faster pace in order to attract talent in a labor constrained market. On a YoY basis, wages grew 11.4% in 2022 Q3. • Canadian construction employment grew nearly 6.0% YoY as of 2022 Q2, while wages grew 3.5% YoY. Wage growth have been more moderated in Canada. However, inflationary pressures may impact near-term wage growth.

CUSHMAN & WAKEFIELD

Construction Timelines: Cushman & Wakefield’s construction contractor sentiment survey indicates that material lead times and project execution timelines continued to increase in the last six months. Of contractors responding, 44% believe that lead times had remained constant (38%) or decreased slightly (6%); the remaining 56% of respondents believe lead times increased slightly (38%) or significantly (19%) over the previous six months. Project execution delays have been more challenged. Only 9% didn’t experience increases while 86% saw slight (69%) to significant (19) increases. A recent report from Associated Builders and Contractors points to project backlog increases in commercial construction 2 . As of November 2022, the backlog increased to 9.1 months, the highest level since 2019 Q2, indicating that timelines will remain constrained. Large commercial projects have been a major contributor to backlog increases.

KEY TAKEAWAY Construction contractors expect increased challenges in project execution timelines and material lead times. The vast majority (85%) expect slight (66%) to significant (19%) increases in material lead times. This is marginally more optimistic than sentiment from a year ago when 88% of GCs expected material lead times to increase slightly (36%) to significantly (52%). While the industry may see material lead times easing, significant issues remain with electrical gear and regionally with core materials, such as cement and sand.

2 Commercial, Institutional and Health Care Construction Drive ABC’s Backlog Indicator to Highest Level Since Q2 2019”; Associated Builders and Contractors; https://www.abc. org/News-Media/News-Releases/entryid/19722/commercial-institutional-and-health care-construction-drive-abcs-backlog-indicator-to-highest-level-since-q2-2019; accessed December 16, 2022.

LEAD AND EXECUTIONS TIMES ARE EXPECTED TO CONTINUE TO INCREASE Cushman & Wakefield Construction Contractor Sentiment Survey, December 2022

Decreased Slightly Increased Slightly

No Change

Increased Significantly

100%

19%

22%

80%

38%

60%

66%

69%

72%

40%

38%

20%

6% 9%

3% 9%

Material Lead Times

Project Execution Time

Material Lead Times

Project Execution Time

Past 6 Months

Next 6 Months

Source: Cushman & Wakefield Research

6 NORTH AMERICA INDUSTRIAL CONSTRUCTION COST GUIDE 2023

C U S H M A N & WA K E F I E L D

INDUSTRIAL MARKET UPDATE Growth in Industrial Demand: The industrial sector has been among the winners in the wake of the pandemic. Skyrocketing e-commerce demand—along with focus on improved supply chains and increased interest in manufacturing onshore—has driven North American industrial demand over the past three years. In the U.S. alone, over 1.3 billion square feet (bsf) was absorbed between 2020 and the end of 2022. That is 56% higher than the next best three-year period (2017-2019) and is 100 msf larger than all of the industrial space in the Americas’ largest market, Chicago. Looking forward, e-commerce demand may be easing but retail, manufacturing, battery manufacturing and storage, semiconductor manufacturing and specialty use demand is replacing it.

KEY TAKEAWAY Record demand has driven sub-4% vacancy rates across the region. As of Q4 2022, the national Canadian vacancy rate was 1.4%, the U.S. 3.3%, and both Mexico City and Monterrey, Mexico were below 3%. As vacancy has grown tighter industrial asking rents have increased. In Q4 2022, U.S. asking rents were up 18.6% YoY and up 38% since the beginning of the pandemic. Canadian asking rents have increased even more substantially: up 45% YoY and 81% since Q4 2019. Latin American rents are down from pre-pandemic highs but have increased by 12% YoY.

STRONGEST 3-YEAR PERIODS OF NET ABSORPTION (MSF)

#1 1,336 MSF

600

500

400

#2 854 MSF

#4 721 MSF

#5 684 MSF

#3 838 MSF

300

200

100

Source: Cushman & Wakefield Research

CUSHMAN & WAKEFIELD

Record Level of Construction: New supply has not been able to keep up with industrial demand, but certainly not for lack of trying. Since the beginning of the pandemic, over 2.1 bsf of industrial space has been delivered across the globe. The Americas has accounted for 62% of that new construction—1.2 bsf in the U.S., 68.4 msf in Canada and 34 msf in Latin America. Additionally, a record level of industrial space under construction remains. The 731 msf of space under construction in the Americas represents 4.0% of current industrial inventory in the region.

INDUSTRIAL DELIVERIES DURING THE PANDEMIC, BY QUARTER

KEY TAKEAWAY Project costs and timelines continue to be impacted by record levels of industrial construction. Even as the pandemic’s negative impact on supply chains lessens, materials and labor challenges remain, making it difficult for developers, landlords and occupiers to complete industrial projects on time and on budget. Given recent occupier demand, a significant slowdown in the construction pipeline is not likely anytime soon.

APAC LATAM Greater China Canada EMEA United States

250

200

150

MSF

100

Q1 2021

Q2 2021

Q1 2022

Q3 2021

Q4 2021

Q1 2020

Q2 2022

Q3 2022

Q4 2022

Q2 2020

Q3 2020

Q4 2020

*Q4 2022 data not available for other regions at time of publication. Source: Cushman & Wakefield Research

8 NORTH AMERICA INDUSTRIAL CONSTRUCTION COST GUIDE 2023

C U S H M A N & WA K E F I E L D

KEY TAKEAWAY The pipeline remains strong, with over 230 msf of industrial space currently under construction in the five markets with the largest pipeline. Five U.S. Sunbelt markets have construction pipelines above 10% of current inventory: Phoenix, Savannah, Las Vegas, Charleston, Austin and Fredericksburg. Outside of the U.S., Toronto has the most construction activity (21 msf) while Mexico City, Vancouver and Calgary each have between 8 and 9 msf under construction. The two Mexico markets Cushman & Wakefield tracks—Mexico City and Monterrey—and three Canadian markets— Calgary, Vancouver and London—have construction pipelines that amount to over 3.0% of current inventory.

ABSOLUTE BASIS: COMPLETIONS SINCE BEGINNING OF PANDEMIC (Q1 2020-Q4 2022)

Las Vegas Louisville Charlotte Central Valley CA

West South Northeast Midwest Latin America Canada

Mexico City Philadelphia Denver Salt Lake City Nashville

Dallas/Ft. Worth Houston Atlanta Chicago PA I-81/I-78 Corridor Phoenix Inland Empire Indianapolis Toronto Memphis Columbus Savannah Sao Paulo Kansas City New Jersey - Central

Construction Activity in Key Markets: Construction activity has been broad based as demand for additional space has been strong across the region. Since the beginning of 2020, eight different markets have seen more than 50 msf of new construction delivered and 19 markets have seen more than 20 msf. This is led by large U.S. Sunbelt markets—Dallas/Ft. Worth, Atlanta and Houston—and major Midwest industrial hubs—Chicago and Indianapolis. Outside the U.S., recent deliveries have been largest in Sao Paulo (27 msf) and Toronto (34 msf). On a percentage basis, smaller Sunbelt markets have led the way. More than a fifth of current inventory has been delivered in the past three years in Birmingham, Savannah and Austin. Already large industrial hub markets have added approximately 15% of inventory: Pennsylvania I-81/I-78 Distribution Corridor (18%), Indianapolis (16%), Phoenix (115%) and Houston (14%).

20 40 60 80

MSF

*Latin America as of Q3 2022 Source: Cushman & Wakefield Research

SHARE OF INVENTORY: COMPLETIONS SINCE BEGINNING OF PANDEMIC (Q1 2020-Q4 2022)

Total Completions Since 2020 Share of Inventory (rhs)

10% 15% 20% 25% 30% 35% 40%

20 30 40 50 60 70 80 90

MSF

0% 5%

0 10

Share of Current Inventory

Boise

Birmingham Savannah Austin

Tampa

Louisville Atlanta

Phoenix

Houston

Philadelphia Memphis

Columbus

Las Vegas

Charleston

Indianapolis

Fredericksburg Salt Lake City

Colorado Springs

Central Valley CA

Palm Beach County

Source: Cushman & Wakefield Research

CUSHMAN & WAKEFIELD

C U S H M A N & WA K E F I E L D

KEY TAKEAWAY Even with all of the aforementioned construction likely outpacing tenant demand over the next few years, vacancy rates are expected to stay near historical lows. National U.S. vacancy is forecast to increase by 100-130 basis points in 2023, still a healthy level for the U.S. market.

National and Market Vacancy Rates: The majority of North American industrial markets currently have vacancy rates below 5.0%, including 73 U.S. markets, 11 Canadian markets and both markets in Mexico. In most cases, vacancies are considerably tighter than was experienced during the 2000s expansion. In fact, even if all of the space currently under construction (731 msf) across the Americas were to deliver without any of it being leased, region-wide vacancy would remain below 7.0%, and North American vacancy (U.S. & Canada) would still be 7.2%. • The ongoing tight market conditions and competition for space saw another quarter of rent growth in Q4 2022, increasing 18.6% YoY. At $8.81 per square foot (psf), Q4 2022 is the third quarter to eclipse $8.00 psf in U.S. industrial history. Asking rental rate growth will persist going forward. However, growth rates are projected to moderate compared to the double-digit growth rates observed in recent quarters as the pipeline brings more space to the market. There will be a flight to the quality space that comes online.

CURRENTLY UNDER CONSTRUCTION Markets with largest amount of square footage under construction (as of Q4 2022)

Under Construction UC as % of Inventory

20 30 40 50 60 70 80

12% 15% 18% 21% 24%

MSF

0% 3% 6% 9%

0 10

*Mexico as of Q3 2022 Source: Cushman & Wakefield Research

10 NORTH AMERICA INDUSTRIAL CONSTRUCTION COST GUIDE 2023

VACANCY RATES REMAIN BELOW PREVIOUS LOWS Select markets, U.S. & Canada

Q4 2022 Prior Cycle Lows (2002-2007)

12%

10%

Source: Cushman & Wakefield

AMERICAS OFFICE FIT-OUT COST GUIDE 202 2

CUSHMAN & WAKEFIELD

INDUSTRIAL COST COMPARISONS

USING THE GUIDE

Estimated costs provided herein are indicative of market averages based on certain assumptions. Exact costs for specific projects may differ to those presented here, and so we recommend engaging a Cushman & Wakefield Project & Development Services professional to advise on precise costings based on your unique construction requirements.

12 NORTH AMERICA INDUSTRIAL CONSTRUCTION COST GUIDE 2023

MOSTEXPENSIVE AND COST-EFFECTIVE MARKETS

North American costs for industrial properties averaged $84 psf for medium size projects (476,400 sf) and $79 psf for large size projects (901,000 sf).

> The priciest markets are located in Western U.S. and Canada. Of the top six most expensive markets, four are located on the West Coast and two are located in Canada. The most expensive market is Portland, where costs for medium size projects average $105 psf and large size projects average $98 psf. Portland Medium - $105 psf Large - $98 psf Calgary Medium - $101 psf Large - $98 psf San Diego Medium - $101 psf Large - $92 psf Seattle Medium - $100 psf Large - $92 psf Oakland Medium - $100 psf Large - $93 psf M ontreal Medium - $97 psf Large - $93 psf

• Memphis • Mexico City • Guadalajara • Nashville • Louisville

> The most cost-effective markets include a mix of markets in Mexico and the

midwestern and southern U.S.

CUSHMAN & WAKEFIELD

BREAKDOWN OF EXPENSES BY CATEGORY

Costs are broken out into six major categories: Site Work; Base Building Structural & Enclosure; Base Building Architectural; Base Building MEP; GC’s and GR’s & Fee; and Contingency

25%

24%

17%

Site work accounts for 17% of total costs across all markets and project size.

Across all markets and project sizes, the structural (slab on grade and structural framing system) is the largest category of fit-out costs, accounting for 25% of the total .

The second highest cost category is building enclosure (exterior wall, exterior panels, windows, roofing, exteriors doors, etc.) at 24% of total for both medium and large projects.

14 NORTH AMERICA INDUSTRIAL CONSTRUCTION COST GUIDE 2023

PDS AMERICAS COST GUIDE – PRICING CRITERIA METHODOLOGY • The industrial build-to-suit project data is based on modern-day distribution centers for two different sizes (476,400 RSF and 901,000 RSF). Office and other ancillary spaces customary in a distribution facility are included. The intended construction of the building is either precast insulated panels or tilt-up concrete panels with steel frame. The roof is a Thermoplastic Polyolefin (TPO) roof pitched to overflow scuppers for drainage. Floors are 8” thick slab with reinforced 4,000 psi concrete. Each building size has appropriate quantities of dock doors, levelers and drive-in ramps and overhead door. The office area is constructed with basic finishes excluding Furniture, Fixtures or Equipment (FF&E) and low voltage cabling, security or audio/visual equipment and systems. The office area is fully conditioned space with the warehouse unconditioned. Warehouse includes LED high-bay lighting.

• Allowances for site concrete, paving, landscaping, storm retention and site utilities are included. The pricing does not include soft costs or purchase of land. • Given the fluidity of the construction market, a ten percent (10%) contingency allowance has been included in the cost. • Costs in this guide were compiled from responses to a survey of general contractors (GCs) focused on industrial properties. 50 GCs representing 43 North American markets responded to the survey.

DISTRIBUTION CENTER COSTS Mediumand Large Projects byMarket

Medium (476,400 RSF)

Large (901,000 RSF)

$20 $30 $40 $50 $60 $70 $80 $90 $100 $110

$- $10

Houston Miami

Dallas

San Diego Seattle

Cincinnati Detroit

Vancouver Denver

Minneapolis Atlanta

Calgary

Phoenix

Toronto

Chicago

Oakland

Penn Corridor Monterrey St. Louis

Portland

Montreal

Mexico City Memphis

Nashville

Salt Lake

Charlotte

Louisville

Baltimore

Cleveland

Indianapolis Columbus

Greenville

Pittsburgh

Milwaukee

Orange Co.

New Jersey

Kansas City

Greensboro

Guadalajara

Los Angeles

Philadelphia

Inland Empire

Central Valley, CA

Source: Cushman & Wakefield Project & Development Services

CUSHMAN & WAKEFIELD

COSTSBYSEGMENT ANDMARKET MEDIUM PROJECTS (476,400 RSF)

United States

SEGMENT COST BY MARKET (MEDIUM PROJECTS)

$50

$100

Portland San Diego Seattle Oakland Central Valley, CA Denver Phoenix Salt Lake

Los Angeles Greensboro Greenville Houston Miami Charlotte Orange Co. Dallas Inland Empire Chicago Cleveland Pittsburgh Minneapolis Atlanta New Jersey Philadelphia Indianapolis Columbus Milwaukee Penn Corridor St. Louis Cincinnati Detroit Kansas City

Site Work Base Bldg Structural & Enclosure Base Building Architectural Base Bldg MEP GC’s and GR’s & Fee Contingency

Baltimore Louisville Nashville Memphis

Source: Cushman & Wakefield Project & Development Services

16 NORTH AMERICA INDUSTRIAL CONSTRUCTION COST GUIDE 2023

SEGMENT COST COMPOSITION BY MARKET (MEDIUM PROJECTS) 0% 20% 40% 60%

80% 100%

Portland San Diego Seattle Oakland Central Valley, CA Denver Phoenix Salt Lake

Site Work Base Bldg Structural & Enclosure Base Building Architectural Base Bldg MEP GC’s and GR’s & Fee Contingency

Baltimore Louisville Nashville Memphis

Source: Cushman & Wakefield Project & Development Services

CUSHMAN & WAKEFIELD

COSTSBYSEGMENT ANDMARKET United States LARGE PROJECTS (901,000 RSF)

SEGMENT COST BY MARKET (LARGE PROJECTS)

$50

$100

Portland Oakland Seattle San Diego Denver Phoenix Salt Lake Central Valley, CA Dallas Houston

Los Angeles Greensboro Greenville Orange Co. Charlotte Miami Inland Empire Cleveland Indianapolis Chicago Atlanta Columbus Minneapolis Cincinnati Milwaukee Pitt Louisville St. Louis Detroit Kansas City Nashville NJ Phily Baltimore Penn Corridor Memphis

Site Work Base Bldg Structural & Enclosure Base Building Architectural Base Bldg MEP GC’s and GR’s & Fee Contingency

Source: Cushman & Wakefield Project & Development Services

18 NORTH AMERICA INDUSTRIAL CONSTRUCTION COST GUIDE 2023

SEGMENT COST COMPOSITION BY MARKET (LARGE PROJECTS)

0% 20% 40% 60% 80% 100%

Portland Oakland Seattle San Diego Denver Phoenix Salt Lake Central Valley, CA Dallas Houston

Site Work Base Bldg Structural & Enclosure Base Building Architectural Base Bldg MEP GC’s and GR’s & Fee Contingency

Source: Cushman & Wakefield Project & Development Services

CUSHMAN & WAKEFIELD

COSTSBYSEGMENT ANDMARKET Canada (USD) MEDIUM PROJECTS (476,400 RSF)

SEGMENT COST BY MARKET

$20 $40 $60 $80 $100 $120

Calgary

Montreal

Vancouver

Toronto

SEGMENT COST COMPOSITION BY MARKET

20%

40%

60%

80% 100%

Calgary

Montreal

Vancouver

Site Work Base Bldg Structural & Enclosure Base Building Architectural Base Bldg MEP GC’s and GR’s & Fee Contingency

Toronto

Source: Cushman & Wakefield Project & Development Services

20 NORTH AMERICA INDUSTRIAL CONSTRUCTION COST GUIDE 2023

COSTSBYSEGMENT ANDMARKET Canada (USD) LARGE PROJECTS (901,000 RSF)

SEGMENT COST BY MARKET

$20 $40 $60 $80 $100 $120

Calgary

Montreal

Vancouver

Toronto

SEGMENT COST COMPOSITION BY MARKET

20%

40%

60%

80% 100%

Calgary

Montreal

Site Work Base Bldg Structural & Enclosure Base Building Architectural Base Bldg MEP GC’s and GR’s & Fee Contingency

Vancouver

Toronto

Source: Cushman & Wakefield Project & Development Services

CUSHMAN & WAKEFIELD

COSTSBYSEGMENT ANDMARKET Mexico (USD) MEDIUM PROJECTS (476,400 RSF)

SEGMENT COST BY MARKET

$20

$40

$60

$80

$100

Monterrey

Guadalajara

Mexico City

SEGMENT COST COMPOSITION BY MARKET

20%

40%

60%

80% 100%

Monterrey

Guadalajara

Site Work Base Bldg Structural & Enclosure Base Building Architectural Base Bldg MEP GC’s and GR’s & Fee Contingency

Mexico City

Source: Cushman & Wakefield Project & Development Services

22 NORTH AMERICA INDUSTRIAL CONSTRUCTION COST GUIDE 2023

COSTSBYSEGMENT ANDMARKET Mexico (USD) LARGE PROJECTS (901,000 RSF)

SEGMENT COST BY MARKET

$20

$40

$60

$80

Monterrey

Guadalajara

Mexico City

SEGMENT COST COMPOSITION BY MARKET

20%

40%

60%

80% 100%

Monterrey

Guadalajara

Site Work Base Bldg Structural & Enclosure Base Building Architectural Base Bldg MEP GC’s and GR’s & Fee Contingency

Mexico City

Source: Cushman & Wakefield Project & Development Services

CUSHMAN & WAKEFIELD

24 NORTH AMERICA INDUSTRIAL CONSTRUCTION COST GUIDE 2023

COSTSBYMARKET

MEDIUM PROJECTS (476,400 RSF): ALL MARKETS

Northeast US Eastern US Midwest US Southeast US Southwest US Western US Canada Mexico

$225

$200

$175

$150

$125

$100

$75

$50

$25

LARGE PROJECTS (901,000 RSF): ALL MARKETS

Northeast US Eastern US Midwest US Southeast US Southwest US Western US Canada Mexico

$225

$200

$175

$150

$125

$100

$75

$50

$25

Source: Cushman & Wakefield Project & Development Services

CUSHMAN & WAKEFIELD

LOCALMARKETDATA

ATLANTA

BALTIMORE

Medium Large

$12.18

$11.55

$16.91

$13.81

Site Work

$42.30

$38.57

$36.14

$33.64

Base Bldg Structural & Enclosure

$5.12

$6.76

$5.83

$6.07

Base Bldg Architectural

$5.71

$5.27

$7.48

$7.17

Base Bldg MEP

$6.90

$5.71

$2.88

$1.88

GC's and GR's & Fee

$6.83

$6.42

$6.76

$6.15

Contingency

$79.03

$74.27

$75.99

$68.72

Total Cost

CENTRAL VALLEY, CA

CHARLOTTE

Medium Large

$12.59

$10.69

$16.77

$15.02

Site Work

$53.34

$50.49

$42.47

$37.88

Base Bldg Structural & Enclosure

$5.01

$6.27

$5.35

$6.98

Base Bldg Architectural

$6.45

$5.20

$7.07

$6.76

Base Bldg MEP

$8.53

$7.07

$7.59

$6.79

GC's and GR's & Fee

$7.96

$7.38

$7.39

$6.87

Contingency

$93.88

$87.10

$86.63

$80.31

Total Cost

CHICAGO

CINCINNATI

Medium Large

$12.97

$12.40

$15.98

$13.03

Site Work

$44.77

$40.59

$35.27

$34.48

Base Bldg Structural & Enclosure

$5.13

$6.11

$4.87

$6.27

Base Bldg Architectural

$7.10

$6.10

$9.10

$8.78

Base Bldg MEP

$5.53

$4.48

$4.88

$3.61

GC's and GR's & Fee

$7.27

$6.74

$6.71

$6.40

Contingency

$82.77

$76.42

$76.81

$72.55

Total Cost

NOTES: 1. Medium (476,400 RSF) 2. Large (901,000 RSF) 3. All costs in USD; conversions made using 2022 rates

26 NORTH AMERICA INDUSTRIAL CONSTRUCTION COST GUIDE 2023

LOCALMARKETDATA

CLEVELAND

COLUMBUS

Medium Large

$16.94

$13.81

$16.30

$13.29

Site Work

$37.38

$36.55

$35.97

$35.17

Base Bldg Structural & Enclosure

$5.16

$6.65

$4.97

$6.40

Base Bldg Architectural

$9.65

$9.30

$9.28

$8.95

Base Bldg MEP

$5.17

$3.83

$4.97

$3.68

GC's and GR's & Fee

$7.11

$6.78

$6.84

$6.52

Contingency

$81.41

$76.91

$78.34

$74.01

Total Cost

DALLAS

DENVER

Medium Large

$14.48

$15.53

$17.09

$19.85

Site Work

$49.80

$46.61

$40.47

$32.31

Base Bldg Structural & Enclosure

$3.55

$5.91

$18.29

$22.19

Base Bldg Architectural

$6.33

$5.76

$4.75

$4.46

Base Bldg MEP

$4.12

$3.54

$2.81

$2.62

GC's and GR's & Fee

$7.50

$7.44

$8.20

$7.96

Contingency

$85.79

$84.80

$91.61

$89.40

Total Cost

DETROIT

GREENSBORO

Medium Large

$11.93

$11.41

$17.06

$15.21

Site Work

$41.19

$37.34

$43.15

$38.06

Base Bldg Structural & Enclosure

$4.72

$5.62

$5.35

$6.98

Base Bldg Architectural

$6.54

$5.61

$7.07

$6.76

Base Bldg MEP

$5.09

$4.12

$7.64

$6.73

GC's and GR's & Fee

$6.68

$6.20

$7.50

$6.90

Contingency

$76.15

$70.31

$87.78

$80.64

Total Cost

NOTES: 1. Medium (476,400 RSF) 2. Large (901,000 RSF) 3. All costs in USD; conversions made using 2022 rates

CUSHMAN & WAKEFIELD

LOCALMARKETDATA

HOUSTON

GREENVILLE

Medium Large

$14.24

$15.27

$16.54

$14.79

Site Work

$49.05

$45.82

$43.27

$38.31

Base Bldg Structural & Enclosure

$3.49

$5.81

$5.35

$6.98

Base Bldg Architectural

$6.22

$5.67

$7.07

$6.81

Base Bldg MEP

$4.05

$3.48

$7.67

$6.77

GC's and GR's & Fee

$7.38

$7.32

$7.48

$6.91

Contingency

$84.33

$83.36

$87.39

$80.57

Total Cost

INLAND EMPIRE

INDIANAPOLIS

Medium Large

$11.04

$9.25

$17.47

$15.44

Site Work

$42.98

$40.57

$37.35

$37.61

Base Bldg Structural & Enclosure

$9.45

$10.91

$6.02

$6.78

Base Bldg Architectural

$7.30

$6.10

$7.73

$8.01

Base Bldg MEP

$7.20

$5.99

$2.97

$2.11

GC's and GR's & Fee

$7.27

$6.79

$6.98

$6.88

Contingency

$85.25

$79.62

$78.52

$76.83

Total Cost

LOS ANGELES

KANSAS CITY

Medium Large

$11.72

$9.84

$11.93

$11.41

Site Work

$44.41

$41.70

$41.19

$37.34

Base Bldg Structural & Enclosure

$10.25

$11.69

$4.72

$5.62

Base Bldg Architectural

$7.81

$6.50

$6.54

$5.61

Base Bldg MEP

$7.42

$6.20

$5.09

$4.12

GC's and GR's & Fee

$7.61

$7.08

$6.68

$6.20

Contingency

$89.22

$83.01

$76.15

$70.31

Total Cost

NOTES: 1. Medium (476,400 RSF) 2. Large (901,000 RSF) 3. All costs in USD; conversions made using 2022 rates

28 NORTH AMERICA INDUSTRIAL CONSTRUCTION COST GUIDE 2023

LOCALMARKETDATA

LOUISVILLE

MEMPHIS

Medium Large

$15.66

$12.76

$11.12

$10.54

Site Work

$34.56

$33.79

$38.61

$35.21

Base Bldg Structural & Enclosure

$4.77

$6.15

$4.68

$6.17

Base Bldg Architectural

$8.92

$8.60

$5.22

$4.81

Base Bldg MEP

$4.78

$3.54

$6.30

$5.21

GC's and GR's & Fee

$6.58

$6.27

$6.23

$5.86

Contingency

$75.27

$71.10

$72.15

$67.81

Total Cost

MIAMI

MILWAUKEE

Medium Large

$13.62

$13.02

$12.26

$11.72

Site Work

$47.01

$42.62

$42.31

$38.36

Base Bldg Structural & Enclosure

$5.38

$6.42

$4.84

$5.78

Base Bldg Architectural

$7.46

$6.40

$6.71

$5.76

Base Bldg MEP

$5.81

$4.70

$5.23

$4.23

GC's and GR's & Fee

$7.63

$7.08

$6.87

$6.37

Contingency

$86.91

$80.24

$78.22

$72.22

Total Cost

MINNEAPOLIS

NASHVILLE

Medium Large

$12.39

$11.84

$11.46

$10.87

Site Work

$42.75

$38.76

$39.81

$36.30

Base Bldg Structural & Enclosure

$4.90

$5.84

$4.82

$6.36

Base Bldg Architectural

$6.78

$5.82

$5.38

$4.96

Base Bldg MEP

$5.28

$4.28

$6.49

$5.37

GC's and GR's & Fee

$6.94

$6.44

$6.43

$6.04

Contingency

$79.04

$72.98

$74.38

$69.91

Total Cost

NOTES: 1. Medium (476,400 RSF) 2. Large (901,000 RSF) 3. All costs in USD; conversions made using 2022 rates

CUSHMAN & WAKEFIELD

LOCALMARKETDATA

NEW JERSEY

OAKLAND

Medium Large

$17.49

$13.97

$13.45

$11.42

Site Work

$37.37

$34.02

$57.21

$54.12

Base Bldg Structural & Enclosure

$6.02

$6.14

$5.09

$6.33

Base Bldg Architectural

$7.73

$7.25

$6.90

$5.49

Base Bldg MEP

$2.97

$1.90

$8.95

$7.42

GC's and GR's & Fee

$6.99

$6.22

$8.48

$7.85

Contingency

$78.57

$69.49

$100.08

$92.64

Total Cost

ORANGE COUNTY

PENN CORRIDOR

Medium Large

$11.38

$9.55

$17.22

$13.67

Site Work

$43.46

$40.81

$36.79

$33.28

Base Bldg Structural & Enclosure

$9.65

$11.10

$5.93

$6.00

Base Bldg Architectural

$7.39

$6.18

$7.61

$7.09

Base Bldg MEP

$7.27

$6.06

$2.93

$1.86

GC's and GR's & Fee

$7.38

$6.87

$6.88

$6.09

Contingency

$86.54

$80.57

$77.36

$67.99

Total Cost

PHILADELPHIA

PHOENIX

Medium Large

$17.49

$13.97

$17.09

$19.85

Site Work

$37.37

$34.02

$40.47

$32.31

Base Bldg Structural & Enclosure

$6.02

$6.14

$18.29

$22.19

Base Bldg Architectural

$7.73

$7.25

$4.75

$4.46

Base Bldg MEP

$2.97

$1.90

$2.81

$2.62

GC's and GR's & Fee

$6.99

$6.22

$8.20

$7.96

Contingency

$78.57

$69.49

$91.61

$89.40

Total Cost

NOTES: 1. Medium (476,400 RSF) 2. Large (901,000 RSF) 3. All costs in USD; conversions made using 2022 rates

30 NORTH AMERICA INDUSTRIAL CONSTRUCTION COST GUIDE 2023

LOCALMARKETDATA

PITTSBURGH

PORTLAND

Medium Large

$17.76

$14.50

$17.49

$15.14

Site Work

$37.95

$35.32

$56.05

$52.58

Base Bldg Structural & Enclosure

$6.12

$6.37

$6.14

$8.12

Base Bldg Architectural

$7.85

$7.53

$6.89

$6.23

Base Bldg MEP

$3.02

$1.98

$9.01

$7.57

GC's and GR's & Fee

$7.09

$6.46

$8.92

$8.38

Contingency

$79.79

$72.15

$104.51

$98.04

Total Cost

SALT LAKE CITY

SAN DIEGO

Medium Large

$17.09

$19.85

$12.94

$10.92

Site Work

$40.47

$32.31

$58.66

$54.48

Base Bldg Structural & Enclosure

$18.29

$22.19

$5.02

$6.28

Base Bldg Architectural

$4.75

$4.46

$6.50

$5.23

Base Bldg MEP

$2.81

$2.62

$8.99

$7.42

GC's and GR's & Fee

$8.20

$7.96

$8.53

$7.81

Contingency

$91.61

$89.40

$100.65

$92.14

Total Cost

SEATTLE

ST. LOUIS

Medium Large

$13.20

$11.17

$12.06

$11.53

Site Work

$57.93

$54.30

$41.63

$37.75

Base Bldg Structural & Enclosure

$5.05

$6.30

$4.77

$5.68

Base Bldg Architectural

$6.70

$5.36

$6.61

$5.67

Base Bldg MEP

$8.97

$7.42

$5.15

$4.17

GC's and GR's & Fee

$8.51

$7.83

$6.76

$6.27

Contingency

$100.36

$92.39

$76.98

$71.07

Total Cost

NOTES: 1. Medium (476,400 RSF) 2. Large (901,000 RSF) 3. All costs in USD; conversions made using 2022 rates

CUSHMAN & WAKEFIELD

LOCALMARKETDATA

CALGARY

MONTREAL

Medium Large

$16.79

$18.88

$14.24

$13.35

Site Work

$47.80

$43.13

$41.95

$39.09

Base Bldg Structural & Enclosure

$6.08

$6.66

$8.24

$9.28

Base Bldg Architectural

$15.19

$7.97

$8.34

Base Bldg MEP

$6.18

$5.39

$16.45

$15.10

GC's and GR's & Fee

$8.85

$8.58

$7.85

$7.50

Contingency

$100.88

$97.84

$96.69

$92.67

Total Cost

TORONTO

VANCOUVER

Medium Large

$15.72

$14.54

$14.21

$12.92

Site Work

$42.20

$37.20

$41.18

$40.01

Base Bldg Structural & Enclosure

$5.31

$6.02

$8.20

$9.24

Base Bldg Architectural

$6.31

$5.54

$7.97

$8.34

Base Bldg MEP

$3.72

$2.94

$13.54

$13.13

GC's and GR's & Fee

$7.15

$6.49

$7.47

$7.35

Contingency

$80.41

$72.74

$92.58

$90.99

Total Cost

NOTES: 1. Medium (476,400 RSF) 2. Large (901,000 RSF) 3. All costs in USD; conversions made using 2022 rates

32 NORTH AMERICA INDUSTRIAL CONSTRUCTION COST GUIDE 2023

LOCALMARKETDATA

GUADALAJARA

MEXICO CITY

Medium Large

$7.48

Site Work

$27.85

Base Bldg Structural & Enclosure

$7.30

$6.97

$7.30

$6.97

Base Bldg Architectural

$11.76

Base Bldg MEP

$14.15

GC's and GR's & Fee

$5.52

$5.48

$5.52

$5.48

Contingency

$74.06

$73.69

$74.06

$73.69

Total Cost

MONTERREY

Medium Large

$7.78

$13.55

Site Work

$28.96

$35.86

Base Bldg Structural & Enclosure

$7.59

$6.52

Base Bldg Architectural

$12.23

$9.13

Base Bldg MEP

$14.71

$3.75

GC's and GR's & Fee

$5.74

$6.65

Contingency

$77.02

$75.46

Total Cost

NOTES: 1. Medium (476,400 RSF) 2. Large (901,000 RSF) 3. All costs in USD; conversions made using 2022 rates

CUSHMAN & WAKEFIELD

CONTACTS

AUTHORS

BRIAN UNGLES Project & Development Services Americas Leader brian.ungles@cushwake.com DAVID SMITH Head of Occupier Insights Global Research david.smith4@cushwake.com

SANDY ROMERO Research Manager Global Research sandy.romero@cushwake.com

REGIONAL PDS LEADS

BRIAN JAFFE Western Region, Mexico + Latin America Lead Project & Development Services brian.jaffe@cushwake.com

TOM FIORETTI Central Region + Canada Lead Project & Development Services tom.fioretti@cushwake.com

RICHARD JANTZ Tri-State Region Lead Project & Development Services richard.jantz@cushwake.com

ADRIAN CONFORTI Northeast Region Lead

Project & Development Services adrian.conforti@cushwake.com

Nic Wilkinson nic.wilkinson@cushwake.com EMEA

Tom Gibson Head of PDS, Asia Pacific tom.gibson@cushwake.com ASIA PACIFIC

Andrew Carmichael Client Services, Asia Pacific andrew.carmichael@cushwake.com

About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 50,000 employees in over 400 offices and 60 countries. In 2021, the firm had revenue of $9.4 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services.

To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.

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