Nickholas Hughan: Managing Complexity at the Intersection of Design, Regulation, and Ownership

How has warehouse construction changed since COVID? What does it really cost to build a tilt-up industrial building today? And how do owners protect themselves from costly change orders?

In this episode of SF Commercial Property Conversations, Bruce Bean sits down with construction management professional Nick Hughan to unpack the realities of industrial development in Southern California. From growing up playing with Legos to managing large-scale tilt-up warehouse projects, Nick shares how he found his way into construction management and what he’s learned along the way.

Nick walks through the economics of warehouse construction, explaining how a 268,000-square-foot tilt-up building once cost roughly $51 per square foot (excluding land and city fees) — and how those costs have nearly doubled in recent years depending on size and scope. He also explains how projects are entitled, why permitting can take two to three years, and how new state regulations are reshaping where warehouses can be built.

The conversation dives into the shift in tenant needs. Twenty years ago, a 100,000-square-foot warehouse might include 20,000 square feet of office space. Today, tenants may only want 3,500 square feet. That shift is driving significant tenant improvement (TI) work, including demolition of outdated mezzanines and reconfiguration of office space.

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