- Roughly $56 per square foot of shell cost — derived, not reported
- A thirteen-month build delivering into a market thirteen months from now
- No announced tenant at groundbreaking
Key Takeaways
- Someone is spending $42 million on a building with no tenant, and the return depends on what concrete costs thirteen months from now
- On any spec start with a 2027 delivery, the underwriting question is not the rent but whether the cost basis is fixed
- 2.6 million square feet still to market means the developer competes with itself if absorption disappoints
Connect CRE; Colliers — August 24, 2026 · The Signal · Speculative development is a bet on a leasing market that does not exist yet. This one starts in October and delivers in November 2027. · The derived shell cost — roughly $56 per square foot — is the number to hold. That is construction only. Land, tenant improvements, leasing commissions and carry sit on top, and the rent required to clear the stack is set by what steel, concrete and labor cost between now and late 2027, not by what they cost today. · Georgetown is the geographic argument. Austin's industrial corridor has pushed north along I-35 as land inside the metro priced out, and 180 remaining acres in a single park is the kind of runway that only exists at the edge. That runway is also the risk: 2.6 million square feet still to market means this developer competes with itself if absorption disappoints. · Thirteen months of construction is thirteen months of exposure to material costs in a policy environment where import duties on construction inputs have moved repeatedly this year. A tilt-wall shell is concrete-and-steel heavy, which is precisely the cost basket that has been least stable. · Implications · On any spec start with a 2027 delivery, the underwriting question is not the rent — it is whether the cost basis is fixed. Ask whether the GMP is locked, where the escalation clauses sit, and who owns the risk on materials between the October start and the November 2027 finish. · Someone is spending $42 million on a building with no tenant, and the return depends on what concrete costs thirteen months from now. · Connect CRE, Green Point Building 754K SF Georgetown Spec Warehouse, August 24, 2026 - https://www.connectcre.com/stories/green-point-building-754k-sf-georgetown-spec-warehouse/
Never miss a Signal
Get the daily brief that busy CRE professionals rely on.