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Lexi:Hi everyone, and welcome to another episode of Cornerstone Building Brands, Metal Minutes. My name is Lexi Edwards, and I will be your host today. With me I have Barry Clifton, he is the National Sales Manager for Heritage Building Systems.
Lexi:Hi Barry, how are you doing?
Barry:Doing all right. How are you?
Lexi:I'm doing well. Do you want to give a little background on your experience? I know that you've got some years in the industry.
Barry:Sure, sure. I've been with Heritage a little over 20 years now. I started on the sales team and didn't know a girt from a purlin back then, so everything I learned about steel buildings was taught to me by the already experienced sales team at Heritage. And I was in the sales team, estimating buildings and working with customers directly for about 10 years, then roughly 10 years ago, I accepted a position as sales manager at Heritage.
Lexi:Awesome. Well, today you are going to help us talk about the cost of steel buildings or more so what goes into the cost of steel buildings. I know that's probably a very common question that you get.
Barry:It is. When I would field calls from customers, that's the first thing they would want to know is how much is the 30 by 40 or how much is a 40 by 60? And what we would have to explain to them is that there were a lot of variables that would go into determining the price of a steel building. And matter of fact, we have a page on our steelbuilding.com website that shows different variations of four different buildings because the building size is not the only thing to consider. You also have to look at the local codes and loads, the wind loads, snow load, even the seismic coefficient in your given area, as well as what options you might want on your building. Things like insulation, sectional or roll up doors, whether you want those doors insulated, the roof pitch of your building, even the color of your building in some cases can affect the price.
Lexi:Okay. It's a little bit more than just here's my length times width times height, now give me a quote.
Barry:It is. Not only are they designed to meet or exceed the local building codes, which we do ask our customers to confirm because that changes from time to time by the local code officials, they change those codes and don't necessarily notify everybody in a timely manner. So not only is it based on local codes and loads, but it's also we have to ship the building to you. So we have to get the shipping costs, and fortunately we have a hub and spoke system where we have several different shipping locations and we can usually it to any part of the country pretty economically, but we do have to determine shipping costs based on the zip code, the job site zip code.
Lexi:Okay. I know that we're kind of blowing through a lot of these different factors so let's go ahead and back up and start with one in particular that kind of caught my ear. You had mentioned building codes, and I'm assuming that a lot of that has to do with the building design. I'm assuming that while length and width and all of that comes into play, I'm sure that the shape and the different structure to the building would have something to do about the cost, correct?
Barry:It is. Basically when you price a steel building, it's sold by the weight, how much is steel per pound and the heavier your building, the more it will cost. Changing things eave height and roof pitch and so forth can affect the weight of a building. If you have heavier panel gauge for one thing, normally we use a 26 gauge, but we have occasional requests for 24 gauge. And I would caution you to beware of buildings with 29 gauge, that's pretty thin for an outer skin.
Barry:But anyways, some of those changes can be determined or those needs can be determined by what you're going to be using the building for. So that's usually one of the first questions I'll ask is what is the building being used for? And I don't do that just to be nosy. A lot of times that question can answer a lot of other questions. If you're using it for a man-cave or just a backyard shop, you may want some insulation, but you probably don't need to maintain a constant temperature year round. But again, that's more accessory pricing other than building.
Barry:A lot of times people will want a canopy. They'll want a six foot canopy outside their building, and they're sometimes surprised at the price, but it's not just sheeting. We can't just design those where we have a piece of sheeting sticking out six feet. There has to be structural support underneath that so that it can support a minimum of 20 pounds per square foot live load, so that adds a lot more steel than you might think. And also, as long as we're talking about purlin extensions, a lot of times someone will talk about getting a four foot extension and our folks are knowledgeable enough to dig a little deeper, because if the building is 20 feet tall, and you have a four foot extension 20 feet up in the air, it's not going to really provide you any protection at all.
Barry:Again, what is the purpose of that canopy or that purlin extension? Is that just for aesthetics or are you actually wanting to protect something or have a picnic table under it? All those things are some questions that really need to be asked because an investment like this is going to be there for your lifetime, and maybe for your kids' kids, if it's maintained properly. It behooves everybody to take our time, find out exactly what you need, and we will always try to balance what you need, what you want and what's in your budget.
Lexi:Okay, that makes sense. So basically the more you add onto the building, the more expensive it will be, that's kind of straight forward.
Barry:It is. Now of course, it's a steel building. One reason we're called Heritage Building Systems is because it is a building system, everything you change affects everything else. So there are some cases where a steeper pitch may actually cost less money because it places less of a stress on the column so the columns are able to be made smaller. And of course, all that is done with computer assisted design. So increasing the height or changing an eave pitch, it all works together.
Barry:But generally speaking, a taller building will cost more. A steeper roof pitch will cost more.
Lexi:Makes sense. Okay. So then another thing you mentioned, it was zip codes. So location, in what ways would location affect the cost of the building?
Barry:And sometimes even more narrow than just a zip code. In particular, in a heavy snow area, like the Adirondack Mountains of New York or in Colorado, because sometimes the zip code can have severe elevation changes, so even the zip code is not enough. We really need the job site address to get an accurate estimate. And we have tools where we can determine the snow load based on that information. Actually, it's based on latitude and longitude, which can be given to us with the physical address, and then we can get a starting point. But again, we ask that you verify those codes and loads with your local permit official.
Barry:In the example that I just gave you, if you're at a higher elevation, sometimes particularly in a mountainous region, the snow load can increase greatly over a short distance. The snow load can increase exponentially, which of course causes more steel to support that snow, which would increase the cost. Same thing with wind. There are two things with wind, there's the wind speed and there's also the wind exposure. The wind speed sometimes can be affected by how close you are to the coast and coastal regions. I had a building once out in the desert, but it was down in a Canyon, so there was a special wind region down that Canyon and the wind speed was about 10 miles an hour faster than it was outside the Canyon. So that's wind speed requirements.
Barry:There's also wind exposure, and it's really not too difficult to figure out, usually from a Google Maps you can determine that, but that's based on other structures or permanent structures that will stop the wind before it gets to your building. So if you're in the middle of a city or in the middle of a field, it's going to make a big difference as far as the wind exposure category. The newer codes, we have to assume Wind Exposure C unless you can be proven to be otherwise. Whereas the older building codes, you could assume B, unless you could prove or had to prove it was C. Anyway, the exposure of the building to the wind can also affect the cost.
Lexi:Okay. And that's because you would have to make certain adjustments on the building to make sure that they meet those certain codes or can withstand certain geographical weather climates then?
Barry:Right. And the main issue with that of course is safety, but also the cover page of your drawings, because you're going to have to... In most cases, you will have to pull a building permit before you can erect your building. When you submit, we provide engineer sealed drawings, so when you take those to your permit office for approval to get your building permit, they're going to look at the building code, the wind load, the snow load and make sure it meets their requirements before they issue that permit. That's why we always insist that you confirm the local codes and loads with your billing department before purchasing a building. It's real easy to make those changes on a computer, on a piece of paper. And usually not very costly if the building gets in the field and then we determine something is wrong, it can be sometimes a lot more costly to fix those errors in the field.
Lexi:Okay. So far we've talked a lot about the building design and the job site as a whole. What about the actual individual materials, the raw materials that go into a steel building?
Barry:Well, the raw materials... Steel is a commodity item, so the steel prices do fluctuate. Some of the things that affect that is... Used to the price of coke was negotiated on an annual basis, now it's negotiated, I believe every quarter. So that just causes more volatility in raw material prices. And it is a global commodity, so the prices do fluctuate. Once you purchase a building, if you purchase it for production, and I promise to go into that just a moment. If you purchase a building for production, we get your deposit, we get your PO, we send you your drawings and we start cutting steel and it's on the way to you as quickly as possible.
Barry:There's another process where you may not be sure you're going to get your permit. You may know that your permit office is difficult to deal with what have you, in those cases you would order your building as a permit job. What we would do then is once we receive your deposit, we would send you your drawings, and then we would stop. We would wait for you to get your building permit, get approval from your county, and then you would release the building for production. And the reason I'm mentioning that now is because if you order a production job, then your price is not going to change.
Barry:If you order a job as a permit job, and then in some extreme circumstances, and some of the harder to permit places, LA County, Las Vegas, things like that, it can sometimes take a year to get your building permit. In those cases, the final price has to be determined at the time of release. In some cases it goes up, some cases it goes down, but it being a commodity item, we can't actually purchase the steel for that building until we're ready to manufacture it. The price of steel, when we begin manufacturing your building is going to determine that.
Lexi:Okay, so that is the building and the materials and all of the tangible items themselves. What else can go into the total project cost?
Barry:Well, you also need to look at your concrete and your erection costs. Heritage does not install the buildings, we don't have crews to go around and putting them up so you'll need to either... A lot of our customers put it up themselves, or they basically become their own general contractor and hire someone to put it up and pour their concrete and so forth. For instance, the way that you brace a building can sometimes cost less when it comes to the steel, but end up costing you more in your overall project. So all those things are items that we try to look at and try to advise you on. And in some instances, again, people are just interested in getting the lowest price for the steel building. And that makes me a bit nervous sometimes because we don't want to be the low price leaders, we want to provide a great quality building, and we want the overall project cost to be as low as possible also, and ease of erection, all those things.
Lexi:Okay. The construction itself, that's not based on something that we, as in Cornerstone or Heritage Building Systems, that's not something that we quote or provide, that would be a third party cost?
Lexi:That would still need to be factored into the total cost, okay. Makes total sense. What are some other things that we might necessarily not provide or be able to quote, but would still need to be associated with total project cost?
Barry:Right. Well, the wonderful thing about doing business with Heritage Building Systems is that we are a division of Cornerstone Building Brands. So we control all the part of manufacturing that steel building, we coat the coils, we press the panels, we make the girts and the purlins and the rigid frames. We're not a broker, we are a manufacturer. Now, anything that's not steel, such as insulation, that's a buyout item, what we call a buy out item. We get our installation from a manufacturer directly. And because of the volume that we purchase, we get really good pricing on that. We provide those as an alternate, usually sometimes we may include that in the price, depending on what the customer wants, but depending on your insulation, again, if it's for cold storage or for manufacturing where controlling the temperature is really important we can do a high R-value installation systems, which can increase the cost quite a bit.
Barry:Or if you're just wanting to knock off the heat in the summer and keep it above freezing in the winter, then we can just do a minimal insulation, but insulation can add to the cost. Also you may want windows, walk doors, sectional overhead doors, or roll up doors. And again, I mentioned those are the items... Now, as far as the doors, another company that we deal with, that's also owned by Cornerstone Building Brands is DBCI, Door Company. They make the roll up doors, so we can provide the roll up doors. Now, the sectional overhead doors, we can provide those from a couple of vendors we work with, or you could get those locally as well. We would need the specs on those doors. A lot of times people will be ready to buy a steel building and they don't know what doors they're using. And that can be an item of contention because we really want to make sure the building is designed because different doors required different support. We want to be sure that we provide the support that's going to be adequate for your doors if you provide your own.
Lexi:Many of the things that you just mentioned, I guess would fall under, steel building accessories. So that is something else that obviously the more you add to the building would probably add to the cost?
Barry:And also that's like I mentioned earlier, if it's a building that you and your family are going to be using for your lifetime and perhaps your kids' lifetime, it's important too, to get everything you want. Don't plan on a phase two, go ahead and get everything you need. If you want good insulated sectional overhead doors with windows, get them. I mean, it adds cost to the building, but when you look at the overall project cost, when you look at the cost of the steel building, along with the cost of the concrete and the erection and whatever finishing out you might have on the inside with sheet rock or cabinetry, or depending on what the building is going to be used for, when you look at the percentage of the overall project costs, adding a couple thousand to the steel building costs on a big enough project could only be a percent or two addition to the overall project cost. A lot of times I see people wanting to get the building cost down as low as possible, which I understand, we want to provide value, but in some cases you cheat yourself by trying to get the cheapest building price, because it's something you may have to pay for later on when you try to upgrade.
Lexi:Makes total sense. All right. Is there anything that we've missed so far about what should go into the total cost of a steel building project?
Barry:Well, there can be some costs depending on the land where you're building. If you're just wanting a building cost, but you haven't really secured the land yet, there can be some tricks there because there may be setbacks or variances that either will make you have to change your building size. You may think you can go all the way to the road, but you really have to be 20 feet back from the road, or you may have to buy additional land. You've also got permitting fees. One other thing, we do provide anchor bolt drawings, which will tell you the stresses the steel building will place on the concrete.
Barry:What we do not provide is the foundation drawing. Your foundation engineer will have to take our anchor bolt plans, which again, tell you the kips or the stresses the building will place on the concrete. They'll take that and couple that with your soil conditions, again, which is depending on the job site location, and they will come up with the actual foundation plan.
Lexi:Okay. All right. So I guess the number one question that we've got to get answered Barry is, is the cheapest option always the best way to go?
Barry:No. Well, my grandpa always said, "Good stuff ain't cheap and cheap stuff ain't no good." Don't get us wrong, we love a good deal. However, the cheapest metal building might not be the best choice. A lot of times I'll have customers who'll call up and they say, they want a quote exactly like this other quote, because they want to compare apples to apples. And I like to say, "That's fine, as long as you don't need an orange." Because other companies don't necessarily delve into it like we do and find out what the building's going to be used for and ask the questions that over our years of experience, we've learned to ask, to try to determine exactly what you need. Because we certainly want to quote what you want, but in some cases, because of our expertise and years in the business, some customers who may be buying their first building ever, they may not have thought of some of the things that we think about.
Barry:For instance, I mentioned the overhang, a four foot overhang, 20 feet up in the air. For instance, if someone wants a building over a certain width, we may try to ask them if they can go longer instead, because the larger span you have to span with the clear span building, the more steel it takes. So we may ask if you could maybe go a little bit longer and a little bit narrower. Again, our project consultants are very experienced, so they're really good at guiding our customers through the different things. Again, some folks are impatient, they just want a price, and we're happy to do that. But in order to give you the actual best value and provide exactly what you want, and what's going to take care of your needs for years to come, it's always best to have a conversation and find out all these items we've been talking about.
Lexi:Sounds good. All right. Well, thank you so much for providing all of this information for us today.
Barry:Certainly. And I would ask anyone who's interested in learning more about steel buildings, we're happy to answer questions. You may not be ready to build yet, but if you're planning on building next year or something like that, it's never too soon to start. Keep in mind that we do have lead times on getting your drawings to you and manufacturing the building, so it's never too early to start talking about it. We'll be happy to send you brochures, color charts, talk to you about some of the various options and get you started.
Lexi:Awesome. Thanks so much Barry.
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