Copper Just Made Warehouses 3.6% More Expensive to Build

Key Highlights

• Small warehouse projects (109,200 SF) rose 3.6% year-over-year to $144/SF; medium rose 2.8% to $87/SF; large rose 2.3% to $78/SF.
• Copper is up 39% year-over-year; steel up 17%; concrete up 4.4%; lumber up 3.7%.
• Construction wages rose 4.3% while construction employment grew just 0.6%.
• New Jersey (+$18/SF), Salt Lake City (+$15/SF) and Miami (+$12/SF) posted the steepest small-project increases.
• The national industrial pipeline reached roughly 389M SF by mid-2026, the highest since Q1 2024.

The Signal

• After a year of flat-to-falling pricing in many markets, nearly every market now reports flat or higher industrial construction costs.
• Small projects are taking the biggest per-foot hit -- a direct underwriting risk for spec small-bay development in cost-sensitive metros.

Implications

Replacement-cost assumptions from 12-18 months ago are stale; copper and steel exposure alone can move a small-bay pro forma. A two-year-high pipeline meeting rising costs sets up margin compression on projects underwritten before this year's material moves -- and strengthens the hold case for existing stock.

The industrial pipeline is at a two-year high, walking straight into a cost environment that punishes small projects hardest.