Smart Insights on Multi-Family Construction Costs in Florida

A breakdown of multi-family construction costs in Florida can sharpen your pre-construction appraisal and risk assessment. As you evaluate a proposed project, understanding how costs allocate—from hard construction to soft fees, land acquisition to equity returns—will help you gauge future market value and underwriting viability. At Mountain Cove Homes, we compile these insights to support your financing decisions.

Before diving into numbers, you may want to explore understanding the challenges of multi-family construction financing to frame your assessment.

Break down cost categories

Multifamily development costs in Florida typically allocate across four main buckets. On average, each accounts for the following share of total project outlay (Multifamily Loans):

Cost category	Percentage of total cost
Hard costs	37%
Soft costs	24%
Land acquisition & demolition	19%
Equity returns	25%

Hard costs

These are the tangible construction expenses—labor, materials, equipment and on-site services. Key line items include:

• Foundations and concrete work
• Framing, roofing, siding and finishes
• Mechanical systems (HVAC, plumbing, electrical)
• Life-safety systems (sprinklers, alarms)
• Landscaping and site improvements

Concrete foundation costs alone range from $8 to $35 per square foot depending on type and location (Estimator Florida).

Soft costs

Soft costs cover non-physical but essential services:

• Architectural, engineering and design fees
• Permits, impact studies and zoning applications
• Legal, insurance and financing fees (loan origination, interest)
• Marketing, lease-up and project management expenses

Land acquisition

This bucket spans purchase price, site preparation, demolition and remediation. It often represents nearly one-fifth of total development outlay.

Equity returns

These are projected returns paid to investors, typically around 25% of project cost. While not a hard expense, they factor into overall capitalization and influence loan-to-cost ratios.

Estimate base construction costs

Once you’ve parsed categories, you can benchmark cost efficiency at both macro and micro levels.

Per square foot

In Florida’s secondary markets such as Orlando, multifamily construction runs about $300 to $350 per square foot, slightly below the national average of $350 per square foot but above tertiary markets at $250 to $300 per square foot (Multifamily Loans).

Per unit

Current estimates place apartment construction between $84,500 and $109,000 per unit in Florida, reflecting variations in finishes, amenities and scale (Estimator Florida).

Account for unusable space

Approximately 15% of a building’s gross area is non-rentable—lobbies, corridors, amenity spaces, shafts and stairwells. Adjust your square footage calculations accordingly.

Regional comparisons

• Three-story, wood-framed buildings cost roughly $3.5 to $4.2 million to build in Florida (Estimator Florida).
• A 10-story mid-rise structure may range from $12.9 million to $18.3 million due to steel support and complexity (Estimator Florida).

Include additional fees

Beyond core construction and land, your appraisal should incorporate these common surcharges.

Developer fees

Developers typically charge around 5% of combined hard and soft costs, plus a 1–2% acquisition fee if they handle land purchase.

Impact fees

Local governments impose fees that can add thousands per unit. Examples as of 2019 (Florida Apartment Association):

County	Road fees	Parks fees	School/Education fees	Fire fees	Police fees	Utilities
Hillsborough	$1,803–$2,882 per unit	$145–$274 per two-bedroom unit	$1,207–$2,357 per unit	$249 per unit	n/a	n/a
Collier	$3,532–$5,542 per unit	$455 (community), $1,230 (regional)	n/a	n/a	n/a	$2,562–$2,701 per unit
Miami-Dade	$6,485.95–$6,860.39 per unit	$1,595–$2,403 depending on district	$612 per unit (exemptions apply)	$440.40 per unit	$574.69 per unit	n/a

Plan for contingencies

Reserve an allowance of 10–15% to cover unforeseen expenses. During cost estimating you may use:

• Initial estimate: 30–50% accuracy
• Preliminary budget: 15–30% accuracy + 20% contingency
• Refined estimate: 5–15% accuracy
• Final budget: within 5% accuracy + 5–10% contingency (Multifamily Loans)

Integrate data for appraisal

With your cost breakdown in hand, you can:

• Compare projected cost per square foot and per unit against recent comps
• Adjust loan-to-cost ratios to reflect equity return targets and fees
• Stress-test budgets for material price inflation or permitting delays
• Coordinate with underwriting by linking cost categories to risk factors

For deeper insights into structuring the financing, see how to secure financing for a multi-family construction project.

Key takeaways

• Multifamily costs in Florida split into hard costs (37%), soft costs (24%), land (19%) and equity returns (25%).
• Expect $300–$350 per square foot and $84,500–$109,000 per unit in secondary markets.
• Factor in roughly 15% unusable space when calculating gross area.
• Include developer fees (5%–7%) and local impact fees that vary by county.
• Build a 10–15% contingency into your budget and refine estimates through each accuracy stage.

FAQs

1. What are the primary cost categories in Florida multifamily construction?
   Hard costs, soft costs, land acquisition & demolition, and equity returns.
2. How do I estimate cost per square foot?
   Benchmark against $300–$350 per square foot for secondary markets, adjusting for building height and finishes.
3. Why factor unusable space into my calculations?
   About 15% of a building’s gross area isn’t rentable, affecting usable square footage and cost allocations.
4. How significant are impact fees?
   Impact fees can add several thousand dollars per unit, depending on county and service type.
5. How should lenders use this breakdown for pre-construction appraisal?
   Incorporate cost categories, fees and contingencies into loan-to-cost analysis and stress-test budgets against market comparables.