Industrial Construction Costs Elevated Nowhere More Than Portland
Nationally, Cushman & Wakefield report shows costs easing.
Portland is the most expensive industrial construction materials market in the US, according to a new report from Cushman & Wakefield.
Its national report issued Jan. 19 shows that costs are easing slightly, but remain elevated across all real estate sectors, especially in the Western US.
In Portland, costs for medium buildouts average $105 psf and large buildouts average $98 psf.
Supply chain constraints continue to have a lingering impact on overall costs and material lead times for the construction of new industrial buildings, according to the report.
Brian Ungles, President, Project & Development Services at Cushman & Wakefield, said in prepared remarks that construction activity in the industrial sector has raced to keep up with robust demand over the last two years in North American markets.
“While industrial construction pipelines continue at historically high levels, the sector is facing several headwinds,” he said. “The demand for industrial space – largely fueled by the e-commerce sector, has led to historic levels of construction, and competition for materials and labor. This along with widespread inflation has driven construction costs higher.”
The most cost-effective markets include a mix of markets in Mexico and the midwestern and southern U.S.
Given recent demand, a significant slowdown in the construction pipeline is not likely anytime soon, Ungles said.