What $/Sq.Ft do you build your apartments for?
Price per Gross Square Foot ($/GSF) of the building? Or Price per Net Rentable Square Ft. ($/NRSF)? Most General Contractors (GCs) and subs-contractors (subs) speak to each other in Gross Square feet ($/GSF)
Most developers like the price to be quoted in $/NRSF because they rent the rentable square feet. Yet, the framer does not care that the developer does not rent the hallways/stairs or common areas. He still must frame them. The painter still must paint them.
When you are getting quoted a price, find out which one is being quoted: $/NRSF or $/GSF Site Preparation: Where is the building being built? Is the building on a hillside or on flat land? What type of soil? The amount of site work that’s needed greatly matters.
Type of Construction matters: Type V- Wood Construction (allows up to 4 stories of wood) Type III - Wood Construction (extra fire protection five stories of wood) Type I - Concrete & Protected Steel Vertical Conveyance Systems: Elevator(s)? How many? Handy cap lifts? Walk up?
How is the building parked? Concrete Garage (Type I): Podium - Above grade Concrete Garage (Type I): Subterranean Combination of Podium and Subterranean Slab on grade? Is the parking garage naturally ventilated, or do you need ventilation?
Each parking type has a different cost and will greatly affect the hard construction costs. Size of the units matters: If you increase the size of a unit from an 850sq ft 2-bedroom unit to 1,000 Sq.Ft. 2-bedroom unit or “blow air” into a unit, you will still have one set of appliances, one kitchen, and the same number of bathrooms. There will be roughly the same costs per unit on Mechanical, Electrical, and Plumbing (MEPs). All that is being done is you are adding a bit more flooring, framing, drywall, and paint.
Making units bigger by blowing air into them decreases $/GSF but increases the actual $ amt. Going the opposite way, decreasing unit size will make a higher $/Sq. Ft but a SLIGHTLY bit lower total $ amt.
When asking of a price to build an apartment, I think a better question is to ask for an estimated $/Unit vs. $/Sq. Ft after specifying what type of project it is: Walk-Up garden product, Mid-Rise, High-Rise, etc.
Architecture: Do you have a “builders” architect that takes costs into consideration? There is a cost-effective way to design and value-engineer attractive buildings. There’s also a way to blow the budget and not add any additional rent.
Structural Engineering: Did your engineer “over-engineer” it? How much structural steel is in the plans? How heavy on the rebar/concrete did your engineer go?
Finishes: This is NOT a place to cheap out. Spend money on everything you touch. Cabinets, Handles, Tiles, and Faucets. Go for the $3-5 ft tile vs. the Home Depot $.99 cents special tile; spend a little more on the handles.
The only way for a contractor to know how much something costs to build is if they have experience building that same product, preferably recently, or they have a full set of plans to bid out, which will likely take 4-6 weeks.
If you are an investor/developer, make sure to work with an experienced GC who has experience in that exact product type. What you don’t want is them getting experience on your dime. If you found this helpful, please subscribe and share.