Small Warehouse Cost Estimates Seem Very High

[Ben Glaser]

I'm looking to build smaller warehouses. Flex space and 4-5k sqft warehouses in an industrial area in the Midwest. 

I did research on price per sq ft and found that it would be $20-30 per sqft. I never trust basic estimates, so I figured it was fair to assume 2x+ maybe $80/sqft. 

Now I'm getting bids in at $140-170/sqft. not including the lot, ground work, etc. Seems very high for mostly unfinished steel frame building. Concrete floors, open rafter roof, and drywall walls (no paint).

I know home builders in the area are building 2500-3000 sqft houses for $200/sqft and I know a guy that builds duplexes for exactly $160/sqft. 

Am I getting screwed? 

Anyone currently building the same, would like to know your building costs.

[Roy Bhavi]

Quote from @Ben Glaser:

I'm looking to build smaller warehouses. Flex space and 4-5k sqft warehouses in an industrial area in the Midwest. 

I did research on price per sq ft and found that it would be $20-30 per sqft. I never trust basic estimates, so I figured it was fair to assume 2x+ maybe $80/sqft. 

Now I'm getting bids in at $140-170/sqft. not including the lot, ground work, etc. Seems very high for mostly unfinished steel frame building. Concrete floors, open rafter roof, and drywall walls (no paint).

I know home builders in the area are building 2500-3000 sqft houses for $200/sqft and I know a guy that builds duplexes for exactly $160/sqft. 

Am I getting screwed? 

Anyone currently building the same, would like to know your building costs.

 Short answer, Yes. If you can't build them for under $140 sf all-in (including land), you are better off exploring other asset classes because your project returns won't justify the effort.