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 risenThe supply and demand forces behind tenant improvement, demising wall, and finish cost increasesHow the e-commerce surge, the Texas bomb cyclone, and supply chain shocks compounded pricingThe rise of spec office finish and why it became standard for multi-tenant warehouse spaceHow data center development is pressuring steel, MEP trades, and skilled laborThe way higher cap rates, interest rates, and rent growth shifts are reshaping underwritingWhy 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. Rate, Review, & Follow on Apple Podcasts: We hope you’re finding value in Build on Better Decisions. Your feedback is important to us, and we’d love to hear from you. Here’s how you can help. Scroll to the bottom, rate our podcast with five stars, and select “Write a Review.” Let us know what you found most helpful from this episode! And if you haven’t done so already, give the podcast a follow, and you'll be notified when new episodes come out.
