How Much Does It Cost to Build a Commercial Apartment Complex?

One of the most common questions developers and investors ask is: how much does it cost to build an apartment complex? The answer isn’t simple. The cost to build an apartment complex depends on many factors, like location, size, design, materials, and labor. Whether you’re starting your first multi-family project or adding to your real estate portfolio, understanding the costs involved is important for good planning and budgeting.

National Average Cost to Build an Apartment Complex

In the U.S., the cost to build per square foot for a commercial apartment complex usually ranges from $150 to $300. This depends on quality, location, and how complex the project is. On average:

• Low-end construction: $100–$150 per sq. ft.
• Mid-range construction: $150–$250 per sq. ft.
• High-end/luxury construction: $250–$400+ per sq. ft.

For example, a 50,000-square-foot mid-range apartment complex could cost around $7.5 million to $12.5 million.

Key Factors That Affect the Cost

1. Location

Land acquisition prices vary drastically between urban, suburban, and rural areas. In addition to land cost, local labor rates, building codes, and permitting fees can significantly impact the final budget.

2. Design and Amenities

A basic walk-up apartment building costs significantly less than a high-rise with elevators, gyms, rooftop decks, and parking structures. The more features you include, the higher the cost to build an apartment complex.

3. Unit Count and Layout

Larger buildings often benefit from economies of scale, but more units can also mean higher costs for materials, plumbing, electrical systems, and HVAC. Studio units might be cheaper to build than multiple-bedroom layouts, but they might not meet market demand in every area.

4. Construction Type

The type of building materials you choose—like wood frame, steel, or concrete—can change how much it costs to build each square foot. Fire protection systems and energy-saving rules also affect the price. Mid-rise and high-rise buildings usually need stronger and more expensive materials, like steel and reinforced concrete.

5. Site Preparation and Infrastructure

Don’t forget the hidden costs: grading, excavation, utility hookups, stormwater management, and road access. These can add hundreds of thousands of dollars to your overall cost, especially if the land is not shovel-ready.

Sample Cost Breakdown (Per Unit)

For a mid-range project in a suburban location, here’s a basic cost breakdown for each unit:

• Land: $20,000
• Construction: $150,000
• Design, permits, legal (soft costs): $25,000
• Financing and backup funds: $15,000

Total per unit: $210,000
If you build 50 units, the total project would cost about $10.5 million.

Hidden or Unexpected Costs

Some costs are hard to predict, like:

• Permit delays
• Utility fees or updates
• Environmental cleanup
• Price increases for materials
• Delivery or supply chain problems

It’s smart to keep an extra 10–15% in your budget just in case these happen.

Final Thoughts

So, how much does it cost to build an apartment complex? The answer is: it depends. But by learning about your market, making smart design choices, and planning your budget well, you can manage costs and get a good return on your investment.

Whether you’re looking at cost to build per square foot or total project cost, it’s important to work with experienced architects, builders, and financial experts who understand multi-family construction.Need a better cost estimate? Talk to a commercial builder or development consultant in your area for a custom study.