Written by Justin Rowe | October 13, 2026

The Most Expensive Decision Happens Before Construction Starts

The largest budget surprises on a commercial project rarely come from the building. They come from the land, and they’re usually locked in the day the purchase agreement goes non-refundable.

We see it regularly in Northern Nevada, especially with our geographically constrained environment. A buyer finds a well-located parcel at what they perceive is a fair price, closes escrow on the purchase, and then brings in a builder to develop out their vision. It’s then that the real numbers expose themselves…perhaps it’s a sewer main that’s 400 feet away instead of at the property line, maybe significant engineered retaining or rockery walls are required, or perhaps it could be a regional impact fee no one accounted for. The parcel appeared to be a good deal, until the project proves out that it’s not.

The fix is simple. Know what the total project costs will be prior to committing to the dirt.

Land Price Is Only the Starting Point

Two parcels with the same asking price can produce very different total project costs. One may be flat, served with utilities and zoned for your use. The other may need a zoning change, significant off-site improvements and months of extra entitlement time. On one of our recent projects in the City of Sparks, we discovered an additional Planning Commission design approval that hadn’t been anticipated, even though the parcel sat within an already entitled commercial development. Because we found it during escrow, we secured an extension on the land purchase until that approval was in hand.

These numbers matter to your all-in cost; the land plus everything it takes to turn that land into a building you can occupy or lease. And time value of money is a real cost, as the cost of capital or carrying costs on land and financing adds up the longer your project takes. Compare sites on that basis and the “cheap” lot often stops looking cheap, while a pricier, shovel-ready parcel can be a better buy.

Seven Costs to Understand Before You Close

A useful pre-acquisition budget doesn’t need full drawings. It needs an honest look at each of these categories, sized to your intended building and use.

  • Site Work

Grading, excavation, retaining walls, paving, drainage and utility design can swing widely from one parcel to the next. In the Truckee Meadows, rock, slopes, and undocumented or unsuitable soil conditions are common culprits. A geotechnical report early in due diligence is one of the best investments you can make, and a local’s interpretation of best practices helps to close this uncertainty gap.

  • Utilities and Off-Site Improvements

Confirm where water, sewer, power, gas and fiber actually are, and whether they have the capacity to serve your future use. Extending a main, upsizing a line or building new turn lanes can rival the cost of the land itself. In Northern Nevada, water rights and will-serve requirements deserve their own line items and confirmation during the entitlement process.

  • Entitlements and Approvals

If your use isn’t allowed outright, budget for the time and expense of a zoning change, handbook amendment, special use permit or design review. And entitlements in Reno/Sparks proper are increasingly complex, as there is a litany of local ordinances, rules and nuance to our locally adopted entitlement process. As mentioned above, time is a real cost here too, as every month of entitlement work is an additional month of carrying costs and more consultant fees.

  • Impact and Connection Fees

Road impact fees, sewer and water connection fees, and other agency charges are often overlooked and can be substantial on commercial projects. In January 2023, City of Reno practically doubled their sewer connection fees, which on a multifamily project, added close to $6,000 per unit to the total cost of the project’s development. Staying ahead of local trends to properly budget the anticipated impact fees is a must.

  • Soft Costs

Architecture, engineering, surveys, permits, testing and inspections, legal and financing costs add up quickly. Plan for them as a meaningful percentage of the project, not an afterthought.

  • The Building Itself

A conceptual cost per square foot based on recent, comparable local projects is enough to test feasibility. Most new entries to our market do not realize the high cost of construction in our region, driven by a handful of reasons. As we locals like to say, Reno is on a de-facto “island” when it comes to accessible trade labor. Local licensing laws, a competitive industry environment for employment, and significant seismic, snow and wind load requirements all compound the total costs of the end product. Focusing the design team on the proper, locally recognized construction assemblies and means and methods helps to drive more significant savings than competing on builder margins will.

  • Contingency

Early budgets carry the most unknowns. A healthy contingency at this stage is not padding your budget -> it’s an acknowledgement of the level of unknowns that present to the upcoming project.

Make Your Due Diligence Period Count

Your due diligence window is the cheapest time to learn what the total project costs will likely be. Once deposits go non-refundable, every discovery becomes your problem instead of a negotiation point. Site survey, geotechnical investigations, utility capacity confirmation, meeting with local city planners, and a conceptual budget should all be solved during this window.

Use it to find the right team to execute on your project.

Bring Your Builder in Before You Buy

At StoneHaven, we develop our own projects as well as build for our clients, so we evaluate a project the way an owner does, by evaluating the entire development life cycle and establishing a realistic path to success. Our project managers can be involved from site selection and acquisitions through construction closeout, giving you one point of contact who understands both the deal and the build.

If you’re looking at a parcel in Northern Nevada, talk to us before your due diligence period runs out. We’ll help you understand what it will really cost to build, so the land you buy is the right foundation for your project.

Contact StoneHaven Construction & Development to start the conversation.