Building Costs Per Square Foot for Multi-Family Apartment Complex – USA National Average

Last Updated on April 18, 2024 by admin

Unveiling the Financial Blueprint: Building Multi-Family Apartments in the USA

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The American Dream has long been associated with the ownership of a home—a piece of land, a white picket fence, and a family to fill the rooms. Yet, as the urban landscape evolves and the population burgeons, the dream adapts, too. Multi-family apartment complexes have emerged as a cornerstone of modern living, offering a sense of community, convenience, and often, affordability. Investors and builders eye these developments as potential goldmines, but the road from blueprint to building is paved with financial planning and strategic decision-making.

This article pulls back the curtain on the cost of constructing a multi-family apartment complex in the United States. We delve into a comprehensive table of costs per square foot, tailored to a block of 2 or 3 units. With meticulous precision, we break down the expenditures into categories such as excavation and foundations, substructure, wall framing, and external finish, among others. By providing a granular look at the construction costs, we aim to arm developers with the knowledge they need to navigate the financial complexities of multi-family building projects.

For instance, the excavation and foundation stage—a critical first step in construction—can cost anywhere from $7.55 to $24.05 per square foot for an exceptional quality building, indicating the profound impact of quality standards on overall expenses. As we move through the layers of construction, from the sturdy substructure to the aesthetic choices in floor finishes and built-in features, the financial picture becomes increasingly detailed. Such precision is crucial, as it informs not only the project’s feasibility but also its potential to meet the requirements of its future inhabitants.

Moreover, we explore the financial implications of scaling up. As the number of units in a complex increases, so too does the economic landscape shift. The economies of scale can be a double-edged sword, offering cost savings per square foot but also amplifying the risks involved. And so, with an 887 square foot apartment as our model, we present the costs associated with different quality classes—ranging from exceptional to minimum—showing how these decisions echo through the eventual pricing of an apartment unit.

From the ambitious exceptional class with a price tag stretching from $79,862.09 to $237,396.08 per unit, to the more modest minimum quality units at $74,362.56 to $97,345.38, the numbers speak volumes about the investment required. We also take a step further, examining the implications for larger complexes of 4 to 9 units, and even those with 10 or more units. These figures are not mere abstracts; they are the hard numbers that developers must consider when seeking to build the multi-family dwellings of tomorrow.

Join us as we dissect each element of the construction process, compare the costs across different scales, and ultimately provide a financial roadmap for those looking to invest in the future of American housing. Whether for the hopeful developer or the curious investor, this article is a guide to the financial intricacies of building an American staple—the multi-family apartment complex.

Table of Building Costs Per Square Foot for Multi-Family Apartment Complex Block of 2 or 3 Units – USA National Average

Building Cost Breakdown for Multi-Family Apartment Complex, Block of 2 to 3 Units – USA National Average:

1. Excavation and Foundations (9% of total cost):
   • Exceptional: $8.11 – $24.05 per sqft
   • Best: $16.17 – $21.17 per sqft
   • Good: $12.41 – $16.24 per sqft
   • Hi Average: $10.40 – $13.59 per sqft
   • Lo Average: $8.85 – $11.59 per sqft
   • Minimum: $7.55 – $9.88 per sqft
2. Substructure (Floor Construction) (12% of total cost):
   • Exceptional: $10.81 – $32.13 per sqft
   • Best: $21.56 – $28.18 per sqft
   • Good: $16.54 – $21.65 per sqft
   • Hi Average: $13.91 – $18.20 per sqft
   • Lo Average: $11.82 – $15.48 per sqft
   • Minimum: $10.11 – $13.27 per sqft
3. Wall Framing and External Finish (12% of total cost):
   • Exceptional: $10.81 – $32.13 per sqft
   • Best: $21.56 – $28.18 per sqft
   • Good: $16.54 – $21.65 per sqft
   • Hi Average: $13.91 – $18.20 per sqft
   • Lo Average: $11.82 – $15.48 per sqft
   • Minimum: $10.11 – $13.27 per sqft
4. Roof Construction (10% of total cost):
   • Exceptional: $9.01 – $26.77 per sqft
   • Best: $17.97 – $23.51 per sqft
   • Good: $13.79 – $18.04 per sqft
   • Hi Average: $11.54 – $15.10 per sqft
   • Lo Average: $9.84 – $12.88 per sqft
   • Minimum: $8.39 – $11.02 per sqft
5. Floor Finishes (5% of total cost):
   • Exceptional: $4.50 – $13.39 per sqft
   • Best: $8.98 – $11.76 per sqft
   • Good: $6.89 – $9.02 per sqft
   • Hi Average: $5.77 – $7.55 per sqft
   • Lo Average: $4.92 – $6.44 per sqft
   • Minimum: $4.19 – $5.49 per sqft
6. Internal Walls and Finishes (8% of total cost):
   • Exceptional: $7.21 – $21.42 per sqft
   • Best: $14.37 – $18.81 per sqft
   • Good: $11.03 – $14.44 per sqft
   • Hi Average: $9.26 – $12.12 per sqft
   • Lo Average: $7.88 – $10.30 per sqft
   • Minimum: $6.74 – $8.82 per sqft
7. Ceiling:
   • Not explicitly mentioned in the original list, but typically includes materials and construction methods for the overhead interior surface.
8. Built-in Bathtub, Shower (4% of total cost):
   • Exceptional: $3.60 – $10.67 per sqft
   • Best: $7.15 – $9.38 per sqft
   • Good: $5.51 – $7.22 per sqft
   • Hi Average: $4.62 – $6.05 per sqft
   • Lo Average: $3.94 – $5.17 per sqft
   • Minimum: $3.37 – $4.41 per sqft
9. Built-in Kitchen Cupboards, Countertops and Bars (8% of total cost):
   • Exceptional: $7.21 – $21.42 per sqft
   • Best: $14.37 – $18.81 per sqft
   • Good: $11.03 – $14.44 per sqft
   • Hi Average: $9.26 – $12.12 per sqft
   • Lo Average: $7.88 – $10.30 per sqft
   • Minimum: $6.74 – $8.82 per sqft
10. Plumbing (12% of total cost):
    • Exceptional: $10.81 – $32.13 per sqft
    • Best: $21.56 – $28.18 per sqft
    • Good: $16.54 – $21.65 per sqft
    • Hi Average: $13.91 – $18.20 per sqft
    • Lo Average: $11.82 – $15.48 per sqft
    • Minimum: $10.11 – $13.27 per sqft
11. Electrical Installation (10% of total cost):
    • Exceptional: $9.01 – $26.77 per sqft
    • Best: $17.97 – $23.51 per sqft
    • Good: $13.79 – $18.04 per sqft
    • Hi Average: $11.54 – $15.10 per sqft
    • Lo Average: $9.84 – $12.88 per sqft
    • Minimum: $8.39 – $11.02 per sqft
12. Special Appliances and Installations:
    • Not explicitly mentioned in the original list, but this would typically cover any additional equipment or features that are not standard.

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How Much Does it Cost to Build an 887 sqft Apartment in the USA? – Multi Family Housing – Block of 2 to 3 Units

Cost Per Unit (USD$ per Unit):

• Exceptional: $79,862.09 – $237,396.08
• Best: $159,442.55 – $208,420.31
• Good: $122,374.82 – $160,051.54
• Hi Average: $102,334.06 – $133,957.00
• Lo Average: $87,235.32 – $114,256.96
• Minimum: $74,362.56 – $97,345.38

Total Cost of Building:

• 2 Unit Apartment Complex:

  • Exceptional: $159,724.18 – $474,792.16
  • Best: $318,885.10 – $416,840.62
  • Good: $244,749.64 – $320,103.08
  • Hi Average: $204,668.12 – $267,914.00
  • Lo Average: $174,470.64 – $228,513.92
  • Minimum: $148,725.12 – $194,690.76

• 3 Unit Apartment Complex:

  • Exceptional: $239,586.27 – $712,188.24
  • Best: $478,327.65 – $625,260.94
  • Good: $367,124.46 – $480,154.62
  • Hi Average: $306,992.18 – $401,871.00
  • Lo Average: $261,705.96 – $342,770.88
  • Minimum: $223,087.68 – $292,036.14

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Table of Building Costs Per Square Foot for Multi-Family Apartment Complex Block of 4 to 9 Units – USA National Average

Building Cost Breakdown for Multi-Family Apartment Complex, Block of 4 to 9 Units – USA National Average:

1. Excavation and Foundations (9% of total cost):
   • Exceptional: $8.27 – $22.72 per sqft
   • Best: $15.23 – $19.90 per sqft
   • Good: $11.68 – $15.29 per sqft
   • Hi Average: $9.77 – $12.78 per sqft
   • Lo Average: $8.33 – $10.97 per sqft
   • Minimum: $7.09 – $10.07 per sqft
2. Substructure (Floor Construction) (12% of total cost):
   • Exceptional: $11.02 – $30.24 per sqft
   • Best: $20.30 – $26.58 per sqft
   • Good: $15.57 – $20.46 per sqft
   • Hi Average: $13.04 – $17.06 per sqft
   • Lo Average: $11.10 – $14.61 per sqft
   • Minimum: $9.48 – $13.43 per sqft
3. Wall Framing and External Finish (12% of total cost):
   • Exceptional: $11.02 – $30.24 per sqft
   • Best: $20.30 – $26.58 per sqft
   • Good: $15.57 – $20.46 per sqft
   • Hi Average: $13.04 – $17.06 per sqft
   • Lo Average: $11.10 – $14.61 per sqft
   • Minimum: $9.48 – $13.43 per sqft
4. Roof Construction (10% of total cost):
   • Exceptional: $9.19 – $25.20 per sqft
   • Best: $16.92 – $22.15 per sqft
   • Good: $12.98 – $17.00 per sqft
   • Hi Average: $10.86 – $14.22 per sqft
   • Lo Average: $9.26 – $12.12 per sqft
   • Minimum: $7.90 – $11.19 per sqft
5. Floor Finishes (5% of total cost):
   • Exceptional: $4.59 – $12.61 per sqft
   • Best: $8.46 – $11.08 per sqft
   • Good: $6.49 – $8.50 per sqft
   • Hi Average: $5.43 – $7.11 per sqft
   • Lo Average: $4.63 – $6.06 per sqft
   • Minimum: $3.95 – $5.59 per sqft
6. Internal Walls and Finishes (8% of total cost):
   • Exceptional: $7.49 – $20.54 per sqft
   • Best: $13.76 – $18.03 per sqft
   • Good: $10.56 – $13.85 per sqft
   • Hi Average: $8.84 – $11.56 per sqft
   • Lo Average: $7.55 – $9.92 per sqft
   • Minimum: $6.45 – $9.18 per sqft
7. Ceiling:
   • Not explicitly mentioned in the original list, but typically includes materials and construction methods for the overhead interior surface.
8. Built-in Bathtub, Shower (4% of total cost):
   • Exceptional: $3.67 – $10.08 per sqft
   • Best: $6.78 – $8.87 per sqft
   • Good: $5.20 – $6.80 per sqft
   • Hi Average: $4.34 – $5.67 per sqft
   • Lo Average: $3.71 – $4.88 per sqft
   • Minimum: $3.17 – $4.49 per sqft
9. Built-in Kitchen Cupboards, Countertops and Bars (8% of total cost):
   • Exceptional: $7.49 – $20.54 per sqft
   • Best: $13.76 – $18.03 per sqft
   • Good: $10.56 – $13.85 per sqft
   • Hi Average: $8.84 – $11.56 per sqft
   • Lo Average: $7.55 – $9.92 per sqft
   • Minimum: $6.45 – $9.18 per sqft
10. Plumbing (12% of total cost):
    • Exceptional: $11.02 – $30.24 per sqft
    • Best: $20.30 – $26.58 per sqft
    • Good: $15.57 – $20.46 per sqft
    • Hi Average: $13.04 – $17.06 per sqft
    • Lo Average: $11.10 – $14.61 per sqft
    • Minimum: $9.48 – $13.43 per sqft
11. Electrical Installation (10% of total cost):
    • Exceptional: $9.19 – $25.20 per sqft
    • Best: $16.92 – $22.15 per sqft
    • Good: $12.98 – $17.00 per sqft
    • Hi Average: $10.86 – $14.22 per sqft
    • Lo Average: $9.26 – $12.12 per sqft
    • Minimum: $7.90 – $11.19 per sqft
12. Special Appliances and Installations:
    • Not explicitly mentioned in the original list, but this would typically cover any additional equipment or features that are not standard.

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How Much Does it Cost to Build an 887 sqft Apartment in the USA? – Multi Family Housing (Block of 4 to 9 Units)

Cost Per Unit (USD$ per Unit):

• Exceptional: $81,481.82 – $223,552.61
• Best: $149,990.79 – $196,656.37
• Good: $115,116.85 – $150,661.57
• Hi Average: $96,325.72 – $126,243.64
• Lo Average: $82,054.82 – $136,345.24
• Minimum: $70,026.39 – $126,063.91

Total Cost of Building:

• 4 Unit Apartment Complex:

  • Exceptional: $325,927.28 – $894,210.44
  • Best: $599,963.16 – $786,625.48
  • Good: $460,467.40 – $602,646.28
  • Hi Average: $385,302.88 – $504,974.56
  • Lo Average: $328,219.28 – $545,381.96
  • Minimum: $280,105.56 – $504,255.64

• 5 Unit Apartment Complex:

  • Exceptional: $407,409.10 – $1,117,903.05
  • Best: $749,953.95 – $983,282.85
  • Good: $575,584.25 – $753,308.85
  • Hi Average: $481,628.60 – $630,304.20
  • Lo Average: $410,274.10 – $681,726.20
  • Minimum: $350,131.95 – $630,319.55

• 8 Unit Apartment Complex:

  • Exceptional: $651,394.24 – $1,431,314.08
  • Best: $1,199,931.16 – $1,573,251.28
  • Good: $920,747.20 – $1,204,197.28
  • Hi Average: $770,836.16 – $1,009,959.68
  • Lo Average: $656,350.24 – $1,090,240.32
  • Minimum: $560,084.48 – $1,008,511.04

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Table of Building Costs Per Square Foot for Multi-Family Apartment Complex Block of 10 or more Units – USA National Average

Building Cost Breakdown for Multi-Family Apartment Complex, Block of 10 or more Units – USA National Average:

1. Excavation and Foundations (9% of total cost):
   • Exceptional: $7.82 – $21.45 per sqft
   • Best: $14.37 – $18.72 per sqft
   • Good: $11.03 – $15.27 per sqft
   • Hi Average: $9.20 – $12.09 per sqft
   • Lo Average: $7.87 – $10.30 per sqft
   • Minimum: $7.23 – $9.55 per sqft
2. Substructure (Floor Construction) (12% of total cost):
   • Exceptional: $10.42 – $28.59 per sqft
   • Best: $19.16 – $25.10 per sqft
   • Good: $14.71 – $20.36 per sqft
   • Hi Average: $12.29 – $16.12 per sqft
   • Lo Average: $10.49 – $13.74 per sqft
   • Minimum: $9.68 – $12.99 per sqft
3. Wall Framing and External Finish (12% of total cost):
   • Exceptional: $10.42 – $28.59 per sqft
   • Best: $19.16 – $25.10 per sqft
   • Good: $14.71 – $20.36 per sqft
   • Hi Average: $12.29 – $16.12 per sqft
   • Lo Average: $10.49 – $13.74 per sqft
   • Minimum: $9.68 – $12.99 per sqft
4. Roof Construction (10% of total cost):
   • Exceptional: $8.67 – $23.83 per sqft
   • Best: $15.97 – $20.92 per sqft
   • Good: $12.25 – $16.97 per sqft
   • Hi Average: $10.24 – $13.43 per sqft
   • Lo Average: $8.75 – $11.45 per sqft
   • Minimum: $8.07 – $10.66 per sqft
5. Floor Finishes (5% of total cost):
   • Exceptional: $4.34 – $11.91 per sqft
   • Best: $7.98 – $10.46 per sqft
   • Good: $6.13 – $8.48 per sqft
   • Hi Average: $5.12 – $6.71 per sqft
   • Lo Average: $4.38 – $5.73 per sqft
   • Minimum: $4.03 – $5.33 per sqft
6. Internal Walls and Finishes (8% of total cost):
   • Exceptional: $6.95 – $19.07 per sqft
   • Best: $12.77 – $16.76 per sqft
   • Good: $9.80 – $13.56 per sqft
   • Hi Average: $8.18 – $10.74 per sqft
   • Lo Average: $7.00 – $9.17 per sqft
   • Minimum: $6.45 – $8.64 per sqft
7. Ceiling:
   • Not explicitly mentioned in the original list, but typically includes materials and construction methods for the overhead interior surface.
8. Built-in Bathtub, Shower (4% of total cost):
   • Exceptional: $3.47 – $9.51 per sqft
   • Best: $6.39 – $8.38 per sqft
   • Good: $4.90 – $6.79 per sqft
   • Hi Average: $4.09 – $5.37 per sqft
   • Lo Average: $3.50 – $4.59 per sqft
   • Minimum: $3.23 – $4.32 per sqft
9. Built-in Kitchen Cupboards, Countertops and Bars (8% of total cost):
   • Exceptional: $6.95 – $19.07 per sqft
   • Best: $12.77 – $16.76 per sqft
   • Good: $9.80 – $13.56 per sqft
   • Hi Average: $8.18 – $10.74 per sqft
   • Lo Average: $7.00 – $9.17 per sqft
   • Minimum: $6.45 – $8.64 per sqft
10. Plumbing (12% of total cost):
    • Exceptional: $10.42 – $28.59 per sqft
    • Best: $19.16 – $25.10 per sqft
    • Good: $14.71 – $20.36 per sqft
    • Hi Average: $12.29 – $16.12 per sqft
    • Lo Average: $10.49 – $13.74 per sqft
    • Minimum: $9.68 – $12.99 per sqft
11. Electrical Installation (10% of total cost):
    • Exceptional: $8.67 – $23.83 per sqft
    • Best: $15.97 – $20.92 per sqft
    • Good: $12.25 – $16.97 per sqft
    • Hi Average: $10.24 – $13.43 per sqft
    • Lo Average: $8.75 – $11.45 per sqft
    • Minimum: $8.07 – $10.66 per sqft
12. Special Appliances and Installations:
    • Not explicitly mentioned in the original list, but this would typically cover any additional equipment or features that are not standard.

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How Much Does it Cost to Build an 887 sqft Apartment in the USA? – Multi Family Housing (Block of 10 or More Units)

Cost Per Unit (USD$ per Unit):

• Exceptional: $77,054.82 – $211,326.36
• Best: $141,653.29 – $185,878.84
• Good: $108,623.98 – $150,454.16
• Hi Average: $90,853.28 – $119,202.18
• Lo Average: $77,638.69 – $101,551.45
• Minimum: $71,600.09 – $93,922.21

Total Cost of Building:

• 10 Unit Apartment Complex:

  • Exceptional: $770,548.20 – $2,113,263.60
  • Best: $1,416,532.90 – $1,858,788.40
  • Good: $1,086,239.80 – $1,504,541.60
  • Hi Average: $908,532.80 – $1,192,021.80
  • Lo Average: $776,386.90 – $1,015,514.50
  • Minimum: $716,000.90 – $939,222.10

• 12 Unit Apartment Complex:

  • Exceptional: $924,657.84 – $2,535,916.32
  • Best: $1,699,839.48 – $2,230,546.08
  • Good: $1,303,487.76 – $1,805,449.92
  • Hi Average: $1,089,239.36 – $1,430,426.16
  • Lo Average: $931,664.28 – $1,218,617.40
  • Minimum: $859,201.08 – $1,127,066.52

• 20 Unit Apartment Complex:

  • Exceptional: $1,541,096.40 – $4,766,520.80
  • Best: $2,833,064.50 – $3,717,576.00
  • Good: $2,172,479.60 – $3,009,083.20
  • Hi Average: $1,817,065.60 – $2,384,043.60
  • Lo Average: $1,553,773.80 – $2,031,029.00
  • Minimum: $1,432,001.80 – $1,878,444.60

• 50 Unit Apartment Complex:

  • Exceptional: $3,852,731.00 – $11,914,520.00
  • Best: $7,082,661.00 – $9,287,900.00
  • Good: $5,431,199.00 – $7,522,025.00
  • Hi Average: $4,541,318.00 – $5,964,090.00
  • Lo Average: $3,880,598.50 – $5,076,507.50
  • Minimum: $3,580,004.50 – $4,696,110.50

• 100 Unit Apartment Complex:

  • Exceptional: $7,705,462.00 – $23,829,040.00
  • Best: $14,165,322.00 – $18,578,840.00
  • Good: $10,862,398.00 – $15,045,416.00
  • Hi Average: $9,085,328.00 – $11,920,218.00
  • Lo Average: $7,763,869.00 – $10,155,145.00
  • Minimum: $7,160,009.00 – $9,392,221.00

• 200 Unit Apartment Complex:

  • Exceptional: $15,410,924.00 – $47,665,208.00
  • Best: $28,330,645.00 – $37,175,760.00
  • Good: $21,724,796.00 – $30,090,832.00
  • Hi Average: $18,170,656.00 – $23,840,436.00
  • Lo Average: $15,537,738.00 – $20,310,290.00
  • Minimum: $14,320,018.00 – $18,784,446.00

Investment in USA Multi-Family Housing: A Developer’s Guide to ROI and Yield

Based on the provided data, let’s calculate the estimated project funding, internal rate of return (IRR), cash on cash return, multi-family mortgage, and rental yield for a “Best” class apartment.

1. Estimated Project Funding:

   • Total Purchase Price: $183,931.43

• Down Payment (Assuming 20%): $36,786.29
• Multi-family Mortgage: $147,145.14

2. Annual Rental Income:

   • Calculated as 887 sqft * $2.50/sqft * 12 = $26,610.00

3. Annual Operating Expenses:

   • Calculated as 35% of Annual Rental Income = 0.35 * $26,610.00 = $9,313.50

4. Net Operating Income (NOI):

   • NOI = Annual Rental Income – Annual Operating Expenses = $26,610.00 – $9,313.50 = $17,296.50

5. Cash on Cash Return:

   • To calculate this, we need to know the Total Cash Invested, which includes the Down Payment and additional costs such as closing fees, insurance premiums, and maintenance costs

For the sake of this example, let’s assume these additional costs total $10,000.

• Total Cash Invested = Down Payment + Additional Costs = $36,786.29 + $10,000 = $46,786.29
• Cash on Cash Return = (NOI / Total Cash Invested) * 100 = ($17,296.50 / $46,786.29) * 100 ≈ 36.98%

6. Multi-family Mortgage:

   • The mortgage amount is $147,145.14, assuming an 80% loan-to-value ratio

7. Rental Yield:

   • Rental Yield = (Annual Rental Income / Total Project Cost) * 100 = ($26,610.00 / $183,931.43) * 100 ≈ 14.47%

8. Internal Rate of Return (IRR):

   • IRR is a complex calculation that requires projecting the cash flows over the investment period and calculating the discount rate that makes the NPV of the investment zero

This calculation typically requires financial modeling software or a financial calculator and detailed projections of future cash flows, including rental income, operating expenses, property appreciation, and the eventual sale of the property.

Please note that these calculations are based on the provided data and assumptions. Actual figures may vary based on additional factors such as loan terms, interest rates, property taxes, management fees, vacancy rates, and market conditions. It is recommended to perform a detailed analysis and consult with a financial advisor for precise investment planning.