What Rising Construction Costs Mean for Industrial Development in the Southeast

Rising construction costs, industrial development feasibility, and the real numbers behind warehouse and logistics pricing anchor a candid conversation between Andrew Taylor and the people pricing, building, and underwriting these projects every day. Joe Matthews of ARCO Design Build, Brad Kinzey and Todd Evans of Kinzey Construction, and Taylor & Mathis partners Hamilton Reynolds and Mike Irby walk through a decade of real project data to show how light industrial development has changed and why those changes matter for anyone evaluating a deal today.

The group traces shell construction costs that have climbed from the mid-twenty-dollar range per square foot to the forty and fifty-dollar range, tenant improvement and demising wall costs up roughly thirty percent, and finish levels that now rival Class A office space inside industrial warehouses. They connect those increases to a chain of overlapping pressures, including the post-pandemic e-commerce boom, the Texas bomb cyclone, supply chain shocks that never fully reset, and a wave of data center construction now pulling skilled labor and steel away from the industrial market.

From there, the discussion turns to the developer side of the table, where higher construction costs collide with higher interest rates, higher cap rates, and moderating rent growth. Hamilton Reynolds and Mike Irby explain how Taylor & Mathis works site plans, specifications, and contractor pricing through repeated iterations to find the point where a project still makes financial sense, and why front-end site development remains the biggest wild card and the biggest opportunity to create value. It is a grounded look at how decisions made early shape whether a project ultimately performs.

Topics Discussed in This Episode:

• A ten-year look at real shell construction costs and how dramatically they have risen
• The supply and demand forces behind tenant improvement, demising wall, and finish cost increases
• How the e-commerce surge, the Texas bomb cyclone, and supply chain shocks compounded pricing
• The rise of spec office finish and why it became standard for multi-tenant warehouse space
• How data center development is pressuring steel, MEP trades, and skilled labor
• The way higher cap rates, interest rates, and rent growth shifts are reshaping underwriting
• Why does front-end site development carry the most risk and the most opportunity in a deal

Connect with Andrew Taylor, President, Taylor and Mathis:

https://www.taylormathis.com/

Connect:
- Joe Matthews (CEO, ARCO Design Build):
Joe Matthews is Co-CEO of ARCO Design/Build and has spent more than two decades with the company, joining  ARCO as a Project Manager and building his career through every role in the organization – Business Development, Regional Manager, Vice President, Divisional President – before being named Co-CEO in January 2026. With nearly three decades in the construction industry and more than two decades at ARCO, Joe has directly managed or overseen more than 100 million square feet of industrial construction. He built the vertically integrated capabilities that allow ARCO to deliver single-source accountability across an expanding range of project types. 

 - Brad Kinzey (CEO, Kinzey Construction Company):
Brad Kinzey is the founder and CEO of Kinzey Construction Company, an Atlanta-based commercial interior and industrial construction firm established in 1985. Under his leadership, the company has completed more than 10 million square feet of commercial office and industrial space, serving corporate, industrial, healthcare, and education clients throughout the region.  

- Hamilton Reynolds (Partner and President, Industrial Division, Taylor and Mathis):
Hamilton Reynolds is Partner and President of the Industrial Division at Taylor & Mathis. Since rejoining the firm in 1996, he has overseen the development of more than 10 million square feet of industrial projects across the Southeast and helped grow Taylor & Mathis into one of the region’s leading industrial development firms.    

- Mike Irby (Partner and Senior VP, Development, Taylor and Mathis:
Mike Irby is Partner and Senior Vice President of Development at Taylor & Mathis, where he focuses on development strategy and project execution across the firm’s portfolio. He is part of the company’s senior leadership team and works closely with clients, partners, and project teams on industrial and mixed-use development initiatives throughout the Southeast. 

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Transcript

SPEAKER_01 0:01

Welcome to the Built on Better Decisions podcast. I'm Andrew Taylor, president of Taylor Mathis. In the real estate development business, outcomes are shaped long before a project is complete and often long before it even begins. The decisions made along the way around project planning, market positioning, capital deployment, leasing, and property management ultimately determine whether a project performs or falls short. This podcast is a place for honest conversations with the people behind those decisions. Owners, developers, brokers, and partners who are navigating complexity, managing risk, and working to get it right. Because at the end of the day, success in the development business isn't just about execution. It's built over time on better decisions. Good afternoon, guys. Thanks for being on the uh Built on Better Decision podcast. Today we're talking about what's changed in construction costs over the last several years, what's driving those changes, and how they're showing up in real projects, primarily within the context of light industrial development, such as the warehouse and logistics facilities that we work on together. We're also going to get into how developers are adjusting, how deals are being evaluated, structured, and move forward in the very different environment today than we've seen in the recent past. Joining me today are Joe Matthews with Arco Design Bill, Brad Kenzie, and Todd Evans with Kinsey Construction, and from our team at Taylor Mathis, Hamilton Ruttles, and Mike Erby. Just a brief background on my guest. Joe Matthews is co-CEO of RCO Design Bill. He spent more than two decades with the company, joining Arco as a project manager and building his career through every role in the organization, from business development, regional manager, vice president, divisional president, before being named co-CEO in January of this year. Brad Kinse is founder and CEO of Kinse Construction Company, an Atlanta-based commercial interior and industrial construction firm that he established in 1985. His company's done a lot of work for us, primarily on interior tenant improvements and interior fit-up. Joe's company at Arcos has done a lot of our shell construction along with some site development work on numerous projects. Hamilton Reynolds is partner and president of the industrial division here at Taylor Mathis. Since he's been with us, he's overseen development of over 10 million square feet of industrial projects across the Southeast and helped our company grow into one of the region's leading industrial development firms. Mike Irby is partner and senior vice president of the development at Taylor Mathis, where he focuses on development strategy and project execution across our firm's portfolio. He's part of a team that works closely with clients, partners, project teams on industrial and mixed-use development projects. Joe and Brad and Todd, y'all have been longtime partners with us, so really appreciate y'all being here. Mike, let me start with you so we can ground this conversation in reality. We're talking about rising construction costs, and you've got some real examples from our projects that show how much things have actually changed over the past five to seven years. Walk us through that a little bit.

SPEAKER_03 3:54

Yeah, so it was interesting to go back over the last 10 years and pull some of our cost data from our projects during that period. And uh, you know, we we we know that construction costs have risen pretty dramatically over that time period, but it was really interesting to pull the actual costs that we incurred on these projects. And I was looking at projects back in in 2015, 2016 when the last cycle started gearing up, and you know, our shell costs for 265,000 square foot buildings were in the $25,000, $26 range. And then in 2019, we did Friendship Road Distribution Center. We had four buildings in that project ranging from 100,000 square feet to 270,000 square feet. Costs for the smaller buildings were $45 a foot up to $32 a foot for the larger $270,000 square foot building. And then when uh the pandemic hit and development really got going on the speculative side, we had a bunch of examples that, for instance, Sugar Hill Distribution Center. We built two buildings up there, $160,000 square feet and a $260,000 square feet. Costs were $38 a foot and $32 a foot, respectively, for those buildings. In 2020, we built Chattahoochee Logistics Center, it's a million one hundred and twenty-eight thousand square feet. We built that building for just under $25 a foot. And you take those prices and you compare them to our most recent project, Brazzleton Distribution Center, for a $290,000 square foot building we paid $50 a foot and $225,000 square foot building, $45 a foot. So you're comparing that with let's say those Horizon Point buildings seven, eight years earlier, that's a 70-80% increase in costs. As I go through some of these numbers, let's keep in mind that the specs changed over that course of time. We're doing lower clear heights. Slab thicknesses went from five to six to seven inches in thickness, and we did soil cement versus gravel under the pad. So, yeah, some of the specs have changed, but generally these cost increases are indicating somewhere in the range of 40 to 50% increases. And real quick, I just want to wrap it up with a comparison from our Sugar Hill project. That 260,000 square foot building at Sugar Hill, we delivered for $32 a foot. We've got a building that we're currently pricing, getting pricing on at Allatuna, our second phase up at Alatuna Business Center, building 300 is a 240,000 square foot building. That price is coming in at 47 bucks a foot. So that's roughly a 45% increase in cost. And the last example I'll I'll bring up is again the Chattahoochee Logistics Center, 1.1 million square feet for 2430 a square foot. We've recently priced a million square footer up in commerce at just over $36 a foot. So that's close to a 50% increase in costs. And then just looking at sort of the tenant interiors numbers that Brad and Todd can attest to, just some high-level numbers. In 2020, we were paying $165 a square foot roughly for office build-out. And we're now generally pricing in at $215 a square foot, which is about a 30% increase. Demising walls, 32-foot clear demising wall is $375 a foot in 2020. We're now a demising wall at the same height for $485 a foot. Again, a 30% increase in costs there. So those are real examples of how pricing has increased, not only from the 16, 17, 18 time frame, but really generally 2020 through today.

SPEAKER_01 8:01

Yeah, so when you look at those numbers and just 40, 50, 60 percent increases, depending on what you're looking at. I know you started with basic shell costs. Of course, all these buildings are architectural tilt-up concrete, burying clear heights. And then you touched on tenant fit-up cost and demising cost. So those are you know 40 to 60 percent increases over a relatively short period of time. Those aren't, and I wouldn't call those incremental changes, those are dramatic changes, but those are the type of cost increases that developers have been dealing with, and they're that our project team members, the design consultants, the GCs. That's what we're working with today. And obviously, they directly affect how these projects should be evaluated and underwritten, and ultimately whether or not the projects are penciling out. So, Joe and Brad, let's talk a little bit about what's behind this. Uh, you're in the middle of pricing and delivering industrial projects every day, so you've got sort of a front row seat as to what's driving these costs. Over the past five or six years in particular, we've seen a huge amount of industrial space delivered, driven by e-commerce, historically low interest rates and cap rates and storm demand. And that's not just in Atlanta, but across the country. In Atlanta, I don't remember if it was 2022 or 2023, but uh there was a record 40 million square feet of new industrial projects delivered. So, from your perspective, how much did that level of construction activity contribute to these uh cost increases?

SPEAKER_02 9:42

You know, Andrew, I think it contributed in a big way. When you got that much industrial product being delivered at the same time, it just creates a pressure across the entire system. So you had material cost increases, the labor market got tighter, these times it got significantly longer, and the trades just had the ability to become much more selective. And so I think that it wasn't just inflation that you saw, but it was really just the supply chain shock that that really has driven the cost up and never truly reset it back to where it was uh you know pre-pandemic.

SPEAKER_01 10:14

Yeah, I remember uh in particular I guess this was maybe pre-COVID, but it seems like one of the big jolts to the system that kind of seemed like it no pun intended to but snowballed it, was this Arctic vortex that hit out in Texas. That's when we started getting numbers from everybody, you know, all of our contracts like, what is this? What's up with that? And I guess I guess that and then all of the e-commerce boom during COVID kicked it all off. Brad, you want to add to that?

SPEAKER_05 10:48

Just what you said about the thing in Texas, I think I may remember, but I mean that we couldn't get paint for a while then. But get which, you know, in 40 years I've never had a hard time getting paint. But factories were shut down and you already had this high demand. And so I think the uh demand had a huge part on it for the material shortages, but also the labor that couldn't keep up, and still today is a tough part of what we deal with.

SPEAKER_01 11:19

Were there specific trades that y'all saw where where there was more pressure points than other trades?

SPEAKER_00 11:25

I'd say on the TI side, speaking on that side only, it was really across the board. We didn't see um one group lagging behind another.

SPEAKER_02 11:35

Yeah, and I'd say the same thing on the shell side, Andrew. Over the past five or six years, it hasn't been until just recently that we really started to see, you know, sort of skilled trades shortfalls.

SPEAKER_01 11:45

So it's interesting, and then so la uh 2024, 2025 in the Atlanta market and the other big five industrial markets across the country, there was a big pullback. There was less tech industrial space being delivered, but that happened to coincide with this new wave of data center developer. Are you seeing that demand affect your construction pricing? And if so, where is that putting pressure on the cost of new industrial projects?

SPEAKER_02 12:16

Yeah, I would absolutely say it is putting pressure on it in certain markets. The steel market in particular, the the W sections are tougher to get, making them more expensive for a lot of these data centers. But then you're also seeing the data center adjacent, what I call it, the manufacturing or new HVAC units, new electrical components, so on and so forth. But the real pressure in a lot of these areas is becoming the MEP traits that are key to the data center construction, and that's where we're gonna continue to see the labor shortage.

SPEAKER_05 12:49

Yeah, we had, I think Todd talked with one of our electrical contractors that done in the past had done a lot of work with us. He didn't add capacity to get more people to do our day-in-out tent stuff.

SPEAKER_02 13:02

Todd, I would assume that's a relatively small data center with some of these hyperscalers. QTS knows folks in Atlanta. I mean, they've got a thousand electricians per building. Yeah. Yeah.

SPEAKER_04 13:19

I'm curious, you talked about data center work. I mean, do you see that the bread and butter shell construction side, how does that impact it by the data center demand?

SPEAKER_02 13:30

You know, I think a lot of industrial guys are moving over into data centers just because there's so much availability right now. It is putting pressure on our labor as well as our sub-labor in the industrial market. So what percent of your current business is data center? Last year it was 100% industrial. We signed two pretty substantial data center projects this year that probably make up 33% of our revenue for the year, just in that one of two projects.

SPEAKER_03 14:01

So that that means more resources in the future that y'all are going to dedicate towards data center development versus spec industrial?

SPEAKER_02 14:10

I don't know that we'll dedicate more. We're building out a separate team. They're very, very different once you get into the guts of it. So we've moved a key, a few key people over, but then we've made a lot of strategic hires outside the business to support that.

SPEAKER_03 14:23

So do you feel like the subtrades are doing the same in in terms of bifurcating what they're how they're serving data centered construction, or is it all under one roof for those guys as well?

SPEAKER_02 14:34

I would imagine that it's all under one roof. I think that the bigger guys, they don't have the resources, quite frankly, to go and do all these projects either. And so what I think is going to happen is you're gonna start seeing some of the smaller electricians trying to grow to go pick up some of the smaller data center work as well.

SPEAKER_03 14:53

Interesting. When I went back and was looking at, you know, COVID obviously precipitated this huge rise in volume of development, shell development. And then, as Andrew mentioned, the bomb cyclone hit Texas in 2021, and that obviously caused a lot of material shortages and lead times and prices to rise, and then spec development continued to accelerate, and then when it stopped in 23-24, the data center construction really took off. And so, you know, we haven't ever had a chance to get a breather on pricing because of all these different uh specialized cycles in development. So this really contributed to keeping these prices elevated beyond historically what they've the sort of percent increases that we've seen in the past.

SPEAKER_01 15:46

Hey, Mike, just rewinding a minute to something you touched on at the beginning. You know, you taught how looking at these precipitous increases, it's not all apples and apples, because there have been some changes in the spec. I think specifically you mentioned in some of our newer projects, like other developers, landlords, were bumping their clear heights up. Some depending on the size and loading figuration of the building, it used to be 28, 32 clear, now it's 32 to 36, and for big box stuff up to 40 foot clear. You also mentioned uh some of the changing specs on some of our site development, for example, with soil cement, which kind of reminds me on the interior side. One thing we're doing more now, and I assume it's not just us, but a lot of industrial developers and landlords is we're building out what we call spec office, and maybe our specs on the office component of these uh of these tenant buildings has changed. Can you touch on that or get Brad to touch on that? What are we doing different that's driving these costs in addition to just the supply and demand and labor things we've been talking about?

SPEAKER_03 16:55

I think I'll take it out for you, Brad and Todd. But I think kind of what we saw was during COVID, you know, the leasing velocity was so high that we weren't building a ton of spec early in the cycle, spec office interiors. And then through COVID, the demand was so quick for space that these tenants, these prospective tenants, needed office finish in place and ready to occupy. And that sort of created this demand for spec office finish. And, you know, that that precipitated sort of the rise and increase in the cost of construction. And in addition to that, when we were building spec office, we really started increasing the level of finish, you know, higher quality finishes, higher ceiling heights to attract wider array of tenants out there. So, you know, all that sort of led to a pretty fast increase in costs. But um, Todd and Brad, would you all let us know what your perspective on the interior construction cost looks like?

SPEAKER_05 17:59

It used to be an upgrade in an interior space in industrial was a two by two ceiling. Seriously. And and it was VCT floor and rolled carpet. Now, you know, all nine-foot ceilings. And now most of the spaces we build probably have a 12-foot ceiling. Some of them might be 10, some of them are higher. So all the walls are higher, and then the uh the finish levels. I mean, Todd, we're putting ceramic tile in the bathrooms, solid surface tops most of the time, and the break room in the bathrooms. Little things like toilet accessories that that you know, the specs on those have increased.

SPEAKER_03 18:40

And Brad, we're not we're talking about increasing the ceiling heights, things of that nature. We're also talking about increasing the door heights, volume of air conditioning. And it affects everything, yeah. So it really is a it's a it affects every different spec in trade. It touches everything.

SPEAKER_05 18:58

Yeah, that's right. And and then the building height, obviously, affects our wall, but it also affects our trades, the mechanical guys, they're using a lift, different lifts for longer periods of time than they would have been 10 years ago or 15 years ago.

SPEAKER_03 19:22

No.

SPEAKER_00 19:22

A lot different.

SPEAKER_03 19:23

Official.

SPEAKER_00 19:24

Mike, and I don't know how sometimes it gets confusing on our end as far as how you calculate your square foot price for the build-out, but what does affect a lot of our numbers is when we're going into a brand new building, where the utilities are placed, how far they're bringing the water line into the building, where the electrical room is in relation to the tenant space, is at the other end of the building? Are we pulling an all-new gas? Just varies from project to project as far as what part of the work is being done under the shell versus what part of that is being done under the TI. There's a couple buildings that we've recently worked in that we're having to run the water line down to the tenant space, and it's a hundred thousand dollar water line on a 3,000 square foot buildout.

SPEAKER_03 20:07

We struggle with that as well because for us it's just cost. And how do you make how do you make the most sense in paying for that?

SPEAKER_05 20:18

We've talked about it before. You hopefully eliminate duplicating, running it on the front end somewhere where it doesn't need to be. But for us, when we look at it, like Todd said, the 3,000 square foot spec space in a building and $100,000 to get the waterline. It was a big building from the other end of the building down there. So that skews what we look at. But the level of finish definitely has you you don't have to walk in for very long and see the level of finish.

SPEAKER_03 20:46

Yeah, I mean, just since we're talking to a wider audience here, you know, we we talked about flooring, for instance. When I first got into business many years ago, we were putting carpet down at $6 a square yard. And now we're putting carpet tiles down, bat carpet tiles down at $34 a yard. That just shows you the level of finish that we're putting in. We're putting finishes in that would be considered class A office finishes in a lot of cases.

SPEAKER_02 21:15

Yes.

SPEAKER_03 21:16

There's no difference between what we were building. We were building a lot of office finish back five, six, seven years ago. We're putting the same level of finish in industrial warehouses that we have been in Class B A minus office buildings.

SPEAKER_05 21:32

Yeah. We build a lot of office space in multi-story office buildings, and in a lot of cases, there's not a lot of difference in some of the finishes. Yeah.

SPEAKER_01 21:41

Sounds like we all should be in the carpet business. All the all the buddies I know from Dalton and Calhood up in the carpet quarter up I seventy five seem to be doing pretty good at me. So the uh this billing out of office is most industrial landlords, all industrial landlords. I mean, it was sort of became prevalent three or four years ago just because these tenants there was so much demand and it was speed to occupancy and the tenant rep brokers said, Hey, you know, my guy's gotta be in quick. Is this is this something that we feel like is here to stay, sort of become perfunctory for multi-tenant spec warehouse?

SPEAKER_00 22:17

We hope it is.

SPEAKER_01 22:21

Was your question, Andrew, the level of finish or the number of No, just the fact that uh nobody was doing this five years ago. It seems like now the spec. Yeah, no, it's everybody.

SPEAKER_05 22:33

And I think at one time we might have had 18 different spec spaces going on in different buildings or something. And it's definitely we're doing it in a lot of places. Yeah. Yeah. Where it used to not be. We were doing it in office multi-story office buildings well before we started doing it in industrial buildings.

SPEAKER_03 22:56

What do you think the market demand, the driver out there is gonna keep going for spec office in the future?

SPEAKER_04 23:03

I don't see it changing, Mike. I think uh especially with the amount of development that's out in the marketplace today, everybody wants to make sure they have a head start on any sort of tenant that's coming along. Otherwise it's with the permitting process today taking longer and longer, that's gonna without having it built spec, you're gonna end up with four, five or six months before you can have your space ready, which could kill your deal.

SPEAKER_01 23:28

So if you take all of this, we talked about materials and labor, just general supply and demand, volume of construction is we're clearly in a very different environment uh than we were operating in pre-COVID or even three or four years ago. So that's where it gets interesting when you're on the developer side of it, because at some point all this showing up in the deal and how we're underwriting uh new development. So Hamilton kind of switching that's kind of where you're living every day when we're looking at new deals with we got higher construction costs we've been talking about we've also got higher interest rates we've got higher cap rates we've got moderation in rent growth compared to what we had during the uh post-COVID boom. So you know there are only so many levers you can pull to make a project pencil out. Uh just big picture from your standpoint, how are you dealing with that? What adjustments are we trying to make to get these projects where they pencil out we can move forward.

SPEAKER_04 24:27

With all the increasing costs that we've encountered we'd really be in trouble but fortunately there's been a tremendous rent growth over the past five or six years coming out of COVID. I would guess that rents in Atlanta have gone from four to six bucks a foot to now seven to nine dollars a foot. So that's pretty much mirrors what you've seen construction costs do. The only difference is one of the big differences is the cap rates as we were coming out of COVID they dropped to historical lows in the you know low to mid-threes which was really unprecedented and was driven by the you know close to zero interest rates. Now that interest rates are up somewhat significantly you know cap rates have settled in the low to mid-fives so it makes it that much more difficult to underwrite our deals so we've got to be super focused on where our costs are, trying to get our contractors to be as aggressive as we can and also I guess secondly we've got to really drill down on the market, make sure we understand where rents are because there has been so much rental rate growth we need to be very comfortable that we're not overshooting rents at this point. So it's a struggle to be honest.

SPEAKER_01 25:38

All right. So it's not one big change just general takeaway listen to this conversation it's it's an amalgamation of a lot of things the collectively that have caused the increases in construction cost. Joe and Brad, I mean as you look out over the next year or two, are there any signals or market trends that y'all are watching closely that could exacerbate you can increase further or may cause a moderation in the increases anything uh sort of big picture out there that y'all are especially interested in?

SPEAKER_05 26:11

Well yeah you know I mean so a lot of things we've talked about we can't necessarily I'm not sure how we can control them you know demand for these things sure has kept up prices to some extent and then you get all these other things where we might have seen a little bit of a reduction from the peak in drywall and framing then we've had a hundred percent increase in insulation and other things that kind of make up for that. But one of our I guess as we look ahead is the labor side of it for us has been a big it's always that's our key is the balance of the guys we need in the field that build the stuff for us and and obviously we got to have work for them to do.

SPEAKER_02 26:54

So that's big challenge for us as we look ahead and and and I would echo everything you said the labor resources are a big concern to us specifically with the skilled traits. Material costs are always a question you know with oil doing whatever it's gonna do I think that we're gonna see more volatility there. And then what we continue to grapple with just a lot of other people is just resource allocation for our projects from our own folks but then also from our subs inventors making sure that we can appropriately staff everything the way that we've committed to so and wrapping it up Mike I wanted to just circle back to you a minute.

SPEAKER_01 27:30

You know the Arco guys obviously do uh shelf construction along with some of the horizontal site development paving curb and gutter and that type of thing and RADS group focuses on interior fit up work on the front end you know that you typically negotiate with site development contractors directly we don't always put that under the Arcode general contract on any given project as we go in we find a we got a pretty good idea of what shell costs are going to be. We got a pretty good idea of what level of tenant finish we're gonna have and what the tenant improvement allowances need to be. So the real wild card from your standpoint is on the front end site development because that's something that's different on every project in terms of the the topo, the geotechnical stuff rock that seems like one area where you can actually make a big difference. Can you comment on that just in terms of the challenges and the opportunities just on making decisions on the front end related to site development?

SPEAKER_03 28:32

Yeah I mean you know as we've always discussed majority of our risk is always in the site and you can do a lot of due diligence on the site up front and and still be surprised when you open it up and start moving dirt. And so that's you know our MO has typically been to spend a lot of time on these sites figuring them out as much as we possibly can on the front end. And you know with regards to sort of pricing our development projects we generally continually tweak these site plans to find the most efficient layout while also maximizing the FAR on the buildings so that we can find the sweet spot between the construction costs and maxing out the footage on the building the leaseable area. So you know Joe I don't know how we compare to other developers out there but we generally run a lot of iterations of site plans and price them a lot change the specs look at the buildings um figure out how we make them class A projects but minimize some of the more expensive elements like glass and cornices for instance or design elements that might drive the cost up but that's how we deliver value and get these projects to a go is by just working the site plans and working the specs and working with contractors like Arco to price these things over and over and then the final analysis you know when we feel like we've we've got something that's on the threshold of being ready to go we'll go back to Arco for instance one final time and say hey we're looking at a X start date what kind of sub input are you going to be able to get based on a real start time and then we can really nail down the shell number in particular and the site. I think we get a lot of value when we're ready to get in close to pull the trigger and the subs know it's a real deal and they're not just pricing the next iteration. So I think that's how we find some value in these projects as well Joe.

SPEAKER_02 30:42

Yeah I agree. You know I wish I wish we were like every other developer who only got one price and then we should start it right instead of going through it all the time. But no I mean you guys really do dig into it a whole lot more than most of our customers. Everybody goes through a lot of rework especially these days but the uh the level of detail and the collaboration I think is what really helps get the number to to where y'all need it to be.

SPEAKER_01 31:04

Yeah Joe I want to personally thank you for your indulgence of of the how many times you're having to reprice stuff Mike tweets the damn site plans about every couple months. I'll say hey is this final pro forward no no we move this one out we move this around and Arco is repricing it so nice for your face I'm gonna taste the buckling Hamilton on that as well. Well guys we really appreciate y'all uh joining us as guests to talk about this I hope all you guys enjoy the rest of the week and we will see you soon I'm sure I'm sure we'll be sending something over to Arco to reprice here by within a few minutes we look forward to it we certainly appreciate it. Yeah it's good if we're pricing something you know that's right all right thanks again everybody thanks for joining me on the Built on Better Decisions podcast these conversations are meant to give you a clearer view into how decisions are made across the commercial real estate life cycle and how those decisions ultimately shape property performance. If you found it valuable I hope you'll share it with a colleague or come back for future episodes because at the end of the day success in real estate development isn't about any one moment. It's built over time on better decisions. I'm Andrew Taylor thanks for listening be sure to subscribe or follow and join us next time