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RSMeans’ dollars-per-square-foot construction costs: accommodation and college building types

07/06/2011 by Alex Carrick, RCD Canadian Chief Economist

Accompanying this report are tables based on RSMeans’ measures of dollar-per-square-foot construction costs. The results for 25 major cities are shown for four accommodation-type buildings and four college structures. (Note: For the accommodation-type buildings table and graphs, please see, RSMeans' dollars-per-square-foot construction costs: accommodation table and graphs.)

Ranking by expense

The difference in costs between the eight types of structure set out in the accompanying tables and graphs are modest.

Within the accommodation category, it is most expensive – on a dollar-per-square- footage basis – to build an eight-to-24-story hotel. It’s a small drop to the next most expensive category, a four-to-seven-story hotel. There are further modest declines to a four-to-seven-story apartment building and a two-to-three-story motel.

As for “typical” college structures, a dormitory leads the cost parade, followed by a laboratory, classroom and student union building. Again, the difference between most expensive and least is relatively modest, plus or minus 15%. The gap is nothing like the giant steps shown in some other building categories.

Furthermore, there isn’t much difference between the square-footage costs of building the most expensive categories in both categories. A college dormitory is a little pricier than an eight-to-24-story hotel, on a dollars-per-square-foot basis.

Comparisons with other types of structure

According to RSMeans, the cheapest types of structure to build, after extremely low-cost parking garages, are factories and warehouses.

A convenience store also belongs in this low-expense grouping. Department stores and movie theatres are a little more expensive. 

In the mid-range for construction costs are office buildings, hotels and high-rise apartment buildings. Heights above ten stories tend to lower the dollar-per-square-footage cost.

Also in the mid-range for construction costs are institutions of higher learning, along with schools at the elementary and secondary levels.

By far the most expensive types of structure to build are hospitals, jails/prisons, courthouses and police stations. Some of these exceed $350 per square foot in the largest urban centers.

New York is the most expensive; cities in the South are least expensive

New York has the highest dollar-per-square-foot construction costs in the country. San Francisco, Boston, Chicago and Philadelphia hold the other four positions in the Top Five among major U.S. urban centers.

Relatively low-cost cities are mainly in the southeast and southwest. Included are Miami, Atlanta, Phoenix, Houston and Dallas.

New Orleans is also low cost. All of the restoration work in that city since Hurricane Katrina has apparently been achieved without a big run-up in costs.

Kansas City, St.  Louis, Detroit, Pittsburgh, Portland and Cleveland are situated in the middle among the 25 cities set out in the tables. Washington, Denver and Baltimore are in the low mid-range.

Minneapolis is the nation’s sixth most expensive construction-cost city. Los Angeles, Seattle and San Diego are a West-Coast tier that is in the upper mid-range.

Along the Pacific shoreline, dollar-per-square foot construction costs in Los Angeles, Seattle and San Diego are between 13% and 16% lower than in high-cost San Francisco.

Portland is nearly one-fifth (-18%) less expensive than the City by the Bay for building projects.

Some other city comparisons

In some other city comparisons, it costs 33% more to build in Chicago than in Atlanta. There is a 28% differential between higher-cost Philadelphia and lower-cost Miami.

The mark-up in New York, the most expensive city among the 25 shown, and Winston-Salem N.C., the least expensive, is nearly three-quarters (+74%).

Year over year construction costs

For the eight types of structure and 25 cities set out in the tables and graphs, the year-over-year average changes in costs mostly ranged from approximately +2.0% to +2.5%.

That’s lower than the current rate of inflation in the United States. May’s year-over-year advance in the all-items Consumer Price Index (CPI) was +3.6%.

Two building types did stand out as having higher price advances than the other categories on average for the 25 cities – a four-to-seven-story hotel at +3.5% (almost exactly the same as the CPI rate) and a four-to-seven-story apartment building, +4.9%.

Chicago and Baltimore were leaders among the cities in year-over-year cost increases. In the apartment building category, their cost climbs were almost 6%.

Pittsburgh also ranked high for year-over-year gain in construction costs. Los Angeles, Boston and Atlanta formed the next tier.

Cities with the lowest rates of construction cost increases were New York, Detroit, Washington, Seattle, New Orleans and Denver.

Phoenix shows evidence of rising up the ranking for percentage change. Kansas City and St. Louis show indications of sliding down the ranking.

The outlook for construction costs

Even in the best of times, demand for construction services is a lagging indicator along the progression of recovery into expansion. Owners want to experience prolonged better production levels and financial metrics before they invest in new facilities.

Besides the fact the current somewhat-better times are only in their early stages and are sometimes wobbly, there are several wrinkles that are peculiar to the construction industry in this cycle.

Dedicated government stimulus spending is winding down and the private sector has not yet become fully engaged again. U.S. housing starts are at nearly unprecedented lows and are searching for a bottom. The same goes for home prices, both new and resale.

The world economy has been stumbling in an uncharacteristic manner due to Greece’s debt problems. And monetary tightening by the government in Beijing to slow super-heated growth, as evidenced by rapid inflation, is muting the outlook for China.  Corrective action in these areas has taken some of the “brio” out of commodity prices.

The global economy in the first half of 2011 was also held back by supply shortages brought on by tsunami damage in Japan, still the world’s third largest economy. The second half of this year will see a return to stronger industrial activity levels in Japan, due to massive rebuilding efforts, and this will ripple around the world.

Construction costs will remain restrained in the short-run but the conditions that have brought on rapid hikes in the past mainly related to vastly increased demand for commodities on the part of emerging nations threaten to rear up again in the medium term.

U.S. dollars per square foot construction costs –
By type of structure – June 2011
    MAJOR CITIES
(alphabetically)
college laboratory college classroom
2011 2010   % Change 2011 2010   % Change
1   ATLANTA $166.95 $161.35   3.5% $155.73 $150.60   3.4%
2   BALTIMORE 176.67 169.52   4.2% 164.79 158.22   4.2%
3   BOSTON 223.17 215.99   3.3% 208.17 201.59   3.3%
4   CHICAGO 221.49 212.17   4.4% 206.60 198.03   4.3%
5   CLEVELAND 187.31 181.50   3.2% 174.72 169.40   3.1%
6   DALLAS 160.79 156.27   2.9% 149.99 145.85   2.8%
7   DENVER 177.23 173.88   1.9% 165.32 162.29   1.9%
8   DETROIT 193.66 188.94   2.5% 180.65 176.35   2.4%
9   HOUSTON 163.59 158.63   3.1% 152.60 148.06   3.1%
10   KANSAS CITY 194.59 187.49   3.8% 181.52 174.99   3.7%
11   LOS ANGELES 202.81 196.38   3.3% 189.18 183.29   3.2%
12   MIAMI 169.94 164.62   3.2% 158.52 153.65   3.2%
13   MINNEAPOLIS 211.77 205.46   3.1% 197.54 191.76   3.0%
14   NEW ORLEANS 165.09 161.54   2.2% 153.99 150.77   2.1%
15   NEW YORK CITY 249.87 243.39   2.7% 233.08 227.17   2.6%
16   PHILADELPHIA 216.63 210.90   2.7% 202.07 196.84   2.7%
17   PHOENIX 166.77 161.90   3.0% 155.56 151.10   2.9%
18   PITTSBURGH 191.05 183.68   4.0% 178.21 171.43   4.0%
19   PORTLAND 189.92 184.40   3.0% 177.16 172.11   2.9%
20   ST. LOUIS 194.03 187.31   3.6% 180.99 174.82   3.5%
21   SAN DIEGO 195.71 189.67   3.2% 182.56 177.02   3.1%
22   SAN FRANCISCO 231.94 224.70   3.2% 216.36 209.72   3.2%
23   SEATTLE 197.58 193.30   2.2% 184.30 180.41   2.2%
24   WASHINGTON, DC 185.44 180.41   2.8% 172.98 168.38   2.7%
25   WINSTON-SALEM 143.42 139.94   2.5% 133.79 130.61   2.4%
MAJOR CITIES
(alphabetically)
college dormitory college student union building
2011 2010 % Change 2011 2010 % Change
1   ATLANTA $170.44 $166.29   2.5% $141.70 $138.02   2.7%
2   BALTIMORE 180.35 174.70   3.2% 149.94 145.00   3.4%
3   BOSTON 227.83 222.59   2.4% 189.41 184.75   2.5%
4   CHICAGO 226.11 218.66   3.4% 187.98 181.49   3.6%
5   CLEVELAND 191.22 187.05   2.2% 158.98 155.25   2.4%
6   DALLAS 164.15 161.05   1.9% 136.47 133.67   2.1%
7   DENVER 180.93 179.19   1.0% 150.42 148.73   1.1%
8   DETROIT 197.70 194.72   1.5% 164.36 161.62   1.7%
9   HOUSTON 167.01 163.48   2.2% 138.85 135.69   2.3%
10   KANSAS CITY 198.66 193.22   2.8% 165.16 160.37   3.0%
11   LOS ANGELES 207.05 202.39   2.3% 172.13 167.98   2.5%
12   MIAMI 173.49 169.65   2.3% 144.24 140.81   2.4%
13   MINNEAPOLIS 216.20 211.74   2.1% 179.74 175.74   2.3%
14   NEW ORLEANS 168.53 166.47   1.2% 140.11 138.17   1.4%
15   NEW YORK CITY 255.09 250.83   1.7% 212.07 208.19   1.9%
16   PHILADELPHIA 221.15 217.35   1.7% 183.86 180.40   1.9%
17   PHOENIX 170.25 166.85   2.0% 141.54 138.48   2.2%
18   PITTSBURGH 195.03 189.29   3.0% 162.15 157.11   3.2%
19   PORTLAND 193.89 190.04   2.0% 161.19 157.73   2.2%
20   ST. LOUIS 198.09 193.04   2.6% 164.68 160.22   2.8%
21   SAN DIEGO 199.80 195.47   2.2% 166.11 162.24   2.4%
22   SAN FRANCISCO 236.79 231.57   2.3% 196.86 192.20   2.4%
23   SEATTLE 201.71 199.21   1.3% 167.69 165.34   1.4%
24   WASHINGTON, DC 189.32 185.93   1.8% 157.39 154.32   2.0%
25   WINSTON-SALEM 146.42 144.22   1.5% 121.73 119.70   1.7%
Data source: Tables were abstracted from RSMeans cost data publications for the A/E/C industry. For more information about RSMeans Square Foot Cost Guide and RSMeans CCI (Construction Cost Index), which indexes square foot costs for cities in the U.S. and Canada, visit the online bookstore at www.rsmeans.com and click on cost data publications (or call 1-800-448-8182).
Charts: Reed Construction Data – RS Means and CanaData.

College laboratory construction cost:
June 2011 ranking of major U.S. cities
College laboratory construction cost: June 2011 ranking of major U.S. cities
College classroom construction cost:
June 2011 ranking of major U.S. cities
College classroom construction cost: June 2011 ranking of major U.S. cities
College dormitory construction cost:
June 2011 ranking of major U.S. cities
College dormitory construction cost: June 2011 ranking of major U.S. cities
College student union building construction cost:
June 2011 ranking of major U.S. cities
College student union building construction cost: June 2011 ranking of major U.S. cities
These charts and tables were abstracted from RSMeans cost data publications for the A/E/C industry. For more information about RSMeans Square Foot Cost Guide and RSMeans CCI (Construction Cost Index), which indexes square foot costs for cities in the U.S. and Canada, visit the online bookstore at www.rsmeans.com and click on cost data publications (or call 1-800-448-8182).
Data source: Reed Construction Data – RSMeans (www.rsmeans.com).
Charts: Reed Construction Data – CanaData

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