Building a 20,000 Square Foot Warehouse

Disclaimer: Today’s construction prices can vary significantly due to supply chain issues and consumer demand. Therefore, please use the following information as a general guide. 

Warehousing and Efficient Supply Chain Management

A 20,000 ft2 warehouse (100-ft by 200-ft) built with an Allied Steel metal building kit is a cost-effective, quick way to construct a clear span storage facility for your e-commerce business. A 20,000 ft2 warehouse can serve as an aircraft hanger, cold storage building, manufacturing facility, and more. Detailed pre-construction planning will help you build a warehouse with sufficient secure space for storage of your inventory, meeting your business needs today and in the future. 

The average cost to build a 20,000 ft2warehouse ranges between $12 to $19 ft2, or $240,000 to $380,000. In comparison, tilt-up construction costs $28 to $48 ft2, and wood-framed warehouses cost between $22 and $39 ft2. In all three cases, material supply and inventory availability can have a significant impact on the final cost. 

Efficient supply chain management contributes towards making the most of your warehouse by tracking your inventory through the supply chain, from buying to storing to final sales. Effective supply chain management can also help you maintain your inventories of machinery, retail, or perishable goods — vital to maintaining a competitive edge over your competition and increasing your company’s profits. 

What Determines the Final Cost of a Warehouse?

Several crucial factors affect the final cost of a 20,000 ft2warehouse:

• Location: availability of transportation to retail outlets, major markets, and accessibility for employees 
• Size: based on the volume of goods requiring storage 
• Steel Prices — may fluctuate depending on supply and availability
• Design: the complexity and uniqueness of the design and finishings
• Inventory Type: non-perishable or perishable
• Required Flexibility: future needs to scale down or up based on demands

Determining the Exact Costs To Build A Warehouse

Prior to building a warehouse, you must determine the building’s soft (e.g. initial investment), hard (e.g., labor, material), and long-term (e.g., maintenance, insurance) costs. Knowing the actual price of your warehouse will help ensure that your future revenues will outpace the warehouse’s expenses in order for your business to remain profitable.

Hard Costs To Build a Warehouse

Multiple factors contribute to the hard costs of constructing a warehouse, including materials and labor. Other hard costs include site, construction equipment, utilities, landscaping, life safety systems, HVAC systems, paving, LEED certification, grading, etc.

A poured concrete foundation can cost $3.85 to $7 ft2. However, the final cost for building a 20,000 sq ft warehouse depends on the location, design, finishing products, etc. 

Material Costs

Materials for a 20,000 ft2 steel building cost between $7 to $11 ft2. However, the costs can vary based on the building’s design, purpose, location, and material availability. In addition, the current costs for steel and fuel will also significantly impact material expenses.

The Cost Of Steel

Steel prices change daily, making it necessary to estimate the costs as near to the project start date as possible. 

Building Design

A simply designed, lightweight, 20,000 ft2 warehouse requires less labor and steel than heavy-duty projects that need to withstand seismic forces, strong winds, and snow.

Custom Features

Add-ons to your warehouse, like refrigeration and insulation, will increase the cost to build.

Fuel Costs

Like steel, fuel prices fluctuate, impacting the transportation costs of getting steel, and other building products, from the supplier to the job site. 

Allied Steel Buildings Combats Increasing Material Costs

Allied Steel Buildings buys steel in bulk, so we qualify for a discount, passing the savings down to our clients and reducing the cost for a 20,000 sq ft warehouse. We are proud of the significant advantages that make Allied products so special:

• Precision-cut, Allied Steel Buildings lessens material cost by minimizing waste. 
• Modular-designed Allied Steel Buildings let you expand or rearrange the parts in order to accommodate your business’s current and future needs.  
• Allied Steel Building Kits provide many features that can make your building more user-friendly (vehicle doors, walk doors), cost-efficient (insulation, solar panels), and comfortable (windows, skylights).

Labor Costs

Labor costs an average of $5-$9 ft2 (hourly billing) for constructing a 20,000 ft2 building, amounting to 20 to 40 percent of the final building project’s budget. 

Labor costs include numerous components:

• Wages
• Insurance
• Worker’s compensation
• Recruiting and training expenses
• Paid time off
• Equipment (company phones, computers, and vehicles)
• Payroll fraud

Lowering Labor Costs with Allied Steel Buildings 

Prefabricated Allied Steel Building Kits arrive at the job site ready-to-assemble, whatever the outdoor temperature. Assembling and erecting a steel warehouse takes about 33 percent less time than other building methods, significantly saving time and labor costs.

Long-Term Costs Of A Warehouse

To ensure a profitable warehouse, you need to consider long-term costs like energy bills, indoor environmental quality, maintenance, and other daily, weekly, and monthly expenses.

Maintenance Costs

A well-run, productive, and safe warehouse requires routine scheduled maintenance, including detailed building inspections for pests, damage,repairs, regular cleaning, paint touch-ups, snow removal, etc. On average, a 20,000 ft2metal building’s repair and maintenance costs annually are between $1.40 and $1.85 ft2.

How Allied Steel Buildings Helps Lessen Long-Term Costs 

Long-lasting Allied Steel PEB buildings offer several vital features that will help you manage long-term costs for energy, repairs, and maintenance:

• The precision used to cut the PEB pieces minimizes gaps in windows, doors, and other spaces susceptible to air infiltration, lowering HVAC costs. However, steel buildings lack sufficient insulating properties, so maintaining the internal temperature of a prefabricated steel building requires applying an insulation product like batted insulation or a thermal insulated metal panel. 
• Allied Steel buildings can stand up to severe weather. Some designs can even resist winds of 180 mph and snow loads of 120 lbs. ft2, features that save on expensive repairs.
• Dimensionally stable, steel buildings do not expand and contract when exposed to moisture. Moisture-resistant steel also stops the growth of unhealthy and structurally damaging mold.
• The ductility and strength of steel buildings will absorb seismic forces without adverse effects, like collapsing. 
• Steel naturally resists structurally destructive pests, like termites.
• Fire-resistant steel traps flames, stopping the spread of the fire. 
• Allied Steel PEB buildings have paint finishes with multiple-decade warranties that protect against blistering, peeling, chipping, and cracking.

Soft Costs For Constructing A 20,000 Sq Ft Building

Keeping on budget requires knowing and managing the soft costs of your warehouse project. Soft costs constitute about 30 percent of the total warehouse building cost. Soft costs include permitting, insurance, taxes, architectural design, engineering, legal fees, borrowing expenses associated with obtaining a construction loan, moveable equipment, and furniture, and other charges not related to brick-and-mortar costs. 

Insurance Costs

Insurance companies determine a building’s premiums mostly based on its resistance to damage. The design of Allied Steel PEB contributes significantly to insurance rates much lower than wood-framed building rates:  

• Steel offers more strength-to-weight ratio with built-in resistance to structural damage from earthquakes, high winds, and heavy snows than wood construction.
• Fire-resistant steel warehouses protect the building from fire damage.
• If lightning strikes a properly grounded steel warehouse, the lightning travels through the framing, flowing safely to the ground. 
• Inorganic steel repels structurally damaging mildew, mold, and termites. 

Some experts predict property insurance prices will increase 10 to 30 percent due to recent wildfires, floods,  and hurricanes, emphasizing the need to reduce insurance rates.  

FAQs

How Long Does It Take To Construct A 20,000 Sq Ft Steel Building?

You can build a pre-engineered 20,000 ft2 steel building from a steel building kit in a few weeks, unlike traditional building methods that can take one to six months. 

Can You Finance A 20,000 Sq Ft Metal Building?

Yes, and the professionals at Allied Steel Buildings, along with PayPal, can help. You just need to determine your budget, apply, get approved, and start building. Then, if you pay off the loan in less than six months, you can avoid interest.

How Much Does A 20,000 Sq Ft Building Cost?

A 20,000 ft2 steel warehouse costs between $240,000 to $380,000, depending on its location, design, steel prices, and inventory type. However, to establish a profitable business, you must consider the soft and long-term costs of the warehouse.

Detailed pre-building planning will help you ensure you construct a warehouse with enough secure space for the temporary and long-term storage of your materials and goods. Maintaining inventory is crucial towards creating efficient supply chain management and a financially successful business. 

Don’t hesitate to contact our professionals at Allied Steel Buildings today for more on building a 20,000 ft2 warehouse.

About Us:

Allied Steel Buildings  is a global leader in steel construction, developing solutions for every industry. Since 2003, Allied Steel Buildings has delivered more than 5,000 metal building projects across 64 countries. For more information, visit alliedbuildings.com/about-us.