Material Costs - Up, up and away!

Prices for materials have been going up and up.  To the tune of 50% increase from December 2015 (1.5 years ago).  That is definitely starting to affect the returns.  I'm actually going to be keeping a very close eye on this over the construction of our newest facility.  If the numbers get out of whack, I may pull the plug on future buildings.  I'm wondering if this is going to have a positive affect (for me anyway) on rents in that rents will go up to catch up with demand due to less construction or more costly construction of storage units.

A 50% increase in material costs seems extreme too.  I need to start getting additional bids on the material prices.  From what I've heard, steel and timber have only gone up 20% in that time.  So something doesn't add up at the current junction. 

This will be interesting to track going forward.  I'll try to keep on top of this for you and report back from time to time.

With this being said, it might be a time to buy pre-existing storage facilities.  You might be able to buy cheaper than develop.  If that's the case, why put yourself through the headache of starting from scratch?  Obviously the numbers still have to work but if they work at $25/SF to build, they sure the heck work at $20/SF to buy.  Why not capitalize on that delta?