Multifamily development is poised for growth, according to CBRE’s U.S. Real Estate Market Outlook for 2025. The report shows developers will add more multifamily units to the U.S. housing market than in any period since the 1970s.
Looking to throw your hammer into the ring? Find out the national average cost of building multifamily properties, including the factors that influence cost and tips to save money.
Average Cost to Build an Apartment Building
According to Janover, Inc., a commercial real estate financing business, the national average multifamily construction estimate is $350 per square foot. For a 12-unit apartment complex, expect to pay $3.6 to $4.8 million. To calculate an average cost based on the number of units and square footage per unit, Janover offers a Construction Calculator.
Key Factors that Influence Cost
Many factors influence the total cost of a multihousing construction project, including the following:
Location and Land Value
Where you choose to build impacts the apartment development costs. Janover lists the average cost in major primary markets, like San Francisco and New York City, at $450+ per square foot.
Secondary markets (Phoenix, Orlando, etc.) fall more in line with the national average, at $300 to $350 per square foot, while you can expect to pay $250 to $300 per square foot in rural markets where land acquisition is more affordable.
Project Size and Number of Stories
Of course, the overall cost to build an apartment building increases according to size. According to Janover, a four-unit apartment building would cost $1.2 to $1.6 million to build, while a 200-unit development would cost between $50 to $100 million.
The taller you go, the more complicated design engineering is required.A high-rise will cost more than a mid-rise apartment or low-rise apartment. Fixr lists the price for three stories at $95 to $275 per square foot, while they estimate a 50-story apartment building to cost $270 to $675 per square foot.
Design Complexity and Material Quality
The design complexity and material quality affect apartment construction costs, too. For more complicated designs, you’ll likely pay more in architect and structural engineer fees.
Material quality is another significant cost driver. Standard-grade building materials may keep costs down, but opting for premium finishes, energy-efficient windows, soundproofing, or high-end flooring can quickly increase the cost of material expenses.
Luxury apartments often include amenities like rooftop decks, gyms, or concierge spaces, which all contribute to rising commercial construction budget needs.
Foundation and Excavation Costs
According to Fixr, you can expect to pay 9% of the total project costs on its foundation. Price varies by the foundation type, with slab being the most budget-friendly option. A mat foundation is a step up, then a pile foundation—often required for high-rise buildings or poor soil conditions—is typically the most expensive.
Soil conditions significantly impact foundation and excavation costs. If the site has unstable, rocky, or waterlogged soil, additional engineering, excavation, and soil stabilization work may be necessary, which can substantially increase costs and timelines. Geotechnical testing is often required early in the planning phase to determine the most appropriate and cost-effective foundation system for the site.
Cost of MEP Systems (Plumbing, Electrical, HVAC)
MEP construction costs make up about 22% of the total buildout costs of an apartment building, per Fixr. These systems are essential to the functionality and livability of the development and include plumbing, electrical wiring and panels, heating, ventilation, and air conditioning.
The complexity and scale of these systems vary depending on the size of the building, the number of units, and the level of amenities offered. High-rise buildings or developments with features like zoned climate control, advanced air filtration systems, or electric vehicle charging infrastructure typically require more sophisticated MEP designs, which can significantly increase costs.
Smart building systems—such as automated energy controls, integrated security, and access systems—are increasingly in demand, especially in mid- to high-end developments. While these technologies can improve energy efficiency, safety, and resident comfort, they also add to initial construction and system integration costs.
Roofing, Windows, and Exterior Walls
Fixr breaks down the home’s exterior envelope costs as:
Roofing: 10% of project costs
Windows and doors: 5% of project costs
Walls and exterior finishes: 14% of project costs
These elements not only impact aesthetics, but also affect energy efficiency, durability, and long-term maintenance needs. Costs vary depending on materials used and the complexity of the design. For example, flat roofs are typically less expensive than pitched or green roofs. High-performance roofing materials or systems that support rooftop amenities like patios or solar panels can also increase costs.
Window size, frame material, and architectural detailing (like floor-to-ceiling glass or custom shapes) also influence price.
Exterior walls may include a mix of materials such as brick, stucco, fiber cement, metal panels, or glass curtain walls. Higher-end or mixed-material facades often require more labor and careful installation, which can drive up both material and construction costs. Local climate and building codes may further influence the choice of materials and the level of insulation required.
Professional Fees and Permitting
The cost of construction is often broken into hard and soft costs. Hard costs relate to the physical construction of the building, while soft costs are intangible. Soft costs include architectural costs, interior design fees, legal fees, building permits, and related expenses. Janover estimates 24% of a building’s development costs are soft costs.
Buildings with unique designs, larger footprints, or sustainable certifications (like LEED) often require more extensive planning and documentation. Permitting costs and timelines can vary widely by jurisdiction, with some municipalities requiring costly impact fees, design reviews, or environmental studies that add to both expenses and timelines.
Add-Ons and Amenities That Increase Cost
Optional features like elevators, structured parking, rooftop decks, and fitness centers all increase construction costs and complexity. These elements often require additional structural support, specialized trades, and coordination with systems like fire protection, access control, and MEP.
High-end interior finishes, including custom millwork, stone countertops, premium flooring, and high-spec appliances, also demand tighter tolerances and more time on site. Builders should anticipate increased labor hours, scheduling dependencies, and strict quality control measures when these features are part of the scope.
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How This Compares to Other Building Types
From a builder’s standpoint, apartment buildings sit between single-family homes and high-end commercial projects in terms of both cost and construction complexity. Apartment project planning demands more coordination and code compliance than residential builds, particularly around fire-rated assemblies, acoustic separation, and egress. Shared MEP systems and stacked plumbing configurations add to the design and installation demands.
According to Janover, the apartment building cost per square foot is $350, with high-rise apartments in cities like Manhattan or San Francisco exceeding $450 per square foot. That’s well above the average cost to build a house in the U.S., which sits around $282,000 total, and more than the base range for many hotels ($160–$441 per square foot, per Autodesk).
Office buildings can swing even higher depending on scope. RS Means data shows a wide range: $460,000 for a small, single-story office to $364 million for a large high-rise. While offices typically involve less plumbing, they often demand complex HVAC, structural steel, and open-span layouts. Hotels surpass apartments in finish level, FF&E coordination, and backend systems (like laundry, food service, and guest services), making them one of the most demanding builds.
Ultimately, multifamily projects strike a balance. The construction process is less intricate than hotels or hospitals but requires far more trade overlap, compliance checks, and systems integration than single-family work.
Cost-Saving Tips for Developers
While many cost drivers are outside your control, there are still ways to manage apartment building construction costs efficiently:
Value engineering: Work with the design team to recommend material substitutions or simplifications that don’t compromise code or function. Swapping a custom feature for a pre-fab system, for example, can save both time and labor.
Use of efficient materials and systems: Durable, fast-installing products like panelized walls, factory-finished materials, or pre-plumbed wall assemblies can reduce time on site and minimize rework.
Construction management software: Estimating, scheduling, and budget tracking tools help reduce overruns and keep the project on track. Digital platforms like ServiceTitan improve visibility across teams and streamline change order workflows, submittals, and documentation with robust project management tools.
Looking to streamline construction job management? Book a demo with ServiceTitan and see how we help construction industry companies manage complex jobs and grow revenue.
