The Craft Brewery Real Estate Hangover

• 

  Stainless brewing tanks and piping in a brewery production room

American craft brewers closed 481 locations in 2025 and opened 300. The beer story has been covered thoroughly. The buildings left behind have not, and they are the more expensive problem.

The O'Connor Brewery building in Norfolk, Virginia runs to about 30,000 square feet of taproom and production space. It has been dark since March 2025.

The original brewer closed in 2023. A second operator took the space and lasted barely a year. Since then the listing agent, Chris Zarpas of S.L. Nusbaum, has been trying to move it, and his description of the effort is the most useful sentence anyone has said about this sector in the past two years.

"We marketed this property more exhaustively than any I think my partner and I have marketed before," he told Bisnow in May 2026.

The property has been repositioned twice, first from brewery to alternative beverage production, then to generic industrial space. Free rent and owner financing have been offered. By Zarpas's account, none of it is moving the needle.

Multiply that by 481.

What actually happened in 2025

The Brewers Association published its annual production figures on April 14, 2026 and revised them on May 29. The final numbers: 300 openings, 481 closings, and an operating count down 2.9 percent to 9,578.

That is the second consecutive year of net contraction. In 2024 the industry recorded 518 openings against 591 closings.

Production fell 4 percent to 22,034,000 barrels. Retail dollar value fell 2.8 percent to $28.0 billion. Employment fell 3 percent, down about 6,000 jobs to 191,000.

One number complicates the obituary. Craft's share of total beer volume rose in 2025, from 13.2 percent to 13.4 percent, because the total beer category fell faster at 5.7 percent. Craft held 24.8 percent of beer retail dollars.

Craft is not losing to other beer. Beer is losing, and craft is losing slightly more slowly.

The segment breakdown contains the first clue that this is a real estate story. Microbreweries, the distribution-dependent format, fell 4.4 percent in count and 8.9 percent in production. Brewpubs fell 2.5 percent in count and 1.7 percent in production. Taprooms fell 2.7 percent and 3.9 percent. Regional craft brewers were nearly flat at a 0.4 percent decline.

The formats built around hospitality held up. The format built around making beer and shipping it did not.

A note on counting

One methodological point belongs here because it will otherwise trip anyone who tries to check these figures.

There is no federal brewery count. The Alcohol and Tobacco Tax and Trade Bureau treats the Brewer's Notice as protected taxpayer information under Internal Revenue Code section 6103, and excludes brewers from its public List of Permittees. It publishes permittee lists for wineries, distilleries, importers and wholesalers, and it publishes beer production and tax statistics by state. It does not publish an entity-level registry of breweries.

So the operating count everyone cites is the Brewers Association's, and that count is definitional. It includes small and independent brewers producing six million barrels or fewer with less than 25 percent non-craft ownership. It excludes brewers a raw permit count would capture. Third-party trackers put the 2025 figure nearer 9,696 against the association's 9,578, and the gap is a definitional artifact rather than an error in either.

The association also revised its own 2025 production figure after publication, from an initially reported 5.1 percent decline to 4 percent. Anyone citing this sector should say which release they are working from.

Where the breweries are

The national count obscures a concentration that matters for anyone assessing where the vacancy will land.

State	Craft breweries	Production, barrels	Note
California	939	3,450,000	Nearly one in six US craft barrels
Pennsylvania	538	2,000,000	Second by both count and volume
Michigan	410	268,660	21st by volume despite third-largest count
Vermont	Smaller count	357,138	Per-capita leader nationally
Maine	Smaller count	338,405	Out-brews far larger states

Two of those rows are more informative than the headline numbers.

Michigan is the clearest illustration of how definitional counting distorts the picture. The state has 410 craft breweries, third most in the country, but ranks 21st by volume at 268,660 barrels. The gap opened when Bell's moved into non-craft ownership under Kirin and Lion, which removed a very large producer from the craft column without a single building going dark. Anyone comparing state volume across years needs to check for ownership reclassifications before drawing a conclusion about capacity.

Vermont and Maine run the other way. Both produce more beer than states several times their size, which means their brewing capacity is disproportionately export-oriented rather than taproom-oriented, and therefore disproportionately exposed to the distribution model that contracted hardest in 2025.

The growth history explains where the newest and least seasoned buildouts sit. On a per-capita basis between 2010 and 2025, North Dakota grew fastest at roughly 1,449 percent and Arkansas second at 1,304 percent, while Nevada at 121 percent and Oregon at 122 percent grew least. Mississippi remains lowest per capita.

Read that as a vintage map. The mature markets, Oregon and Colorado and the Pacific Northwest generally, built their capacity early and have already been through one shakeout. The markets that grew tenfold or more after 2010 built theirs into the 2015 to 2019 window, financed at the top of the enthusiasm curve, and are carrying the least seasoned buildings and the least seasoned debt.

The most over-improved small industrial product in America

Now the physical problem, which is the article's actual subject.

Tenant improvement for a full-service restaurant runs $200 to $400 per square foot, and quick service $260 to $480, the highest of any commercial category. Plain industrial and warehouse space runs $25 to $70.

A production brewery with a taproom is both buildings at once.

The line items are what make the space unlettable afterward. Trench drains and floor drains cut into sloped slabs, which one contractor guide describes as non-negotiable. Grease interceptors at $15,000 to $80,000. A 15-barrel electric brewhouse alone can draw 150 to 200 amps, and a full operation needs 400 to 800 amp three-phase service, which older industrial buildings frequently lack; upsizing a panel to 600 or 800 amps runs $35,000 to $180,000. Add glycol chiller loops, a boiler and steam, grain handling, walk-in cold storage, sanitary wall finishes, and the ceiling height to stand a fermenter upright.

At the top end the numbers get large. A new 33,900 square foot brewery in McKinney, Texas carried an estimated project cost of $18.3 million on the state licensing record.

Here is the asymmetry that makes this a lending problem rather than a beverage problem. Almost none of those improvements transfer value to the next tenant. A logistics user does not want trench drains in the slab. A retailer does not want a 600 amp service and a glycol loop on the roof. To the next occupant, the previous tenant's capital is demolition scope.

And the burden has been shifting onto the operator. Tenant improvement allowances tightened 8 to 15 percent in the first half of 2026 as landlords repriced concessions against softer rent growth. More of every brewery buildout now sits on the tenant's balance sheet, where it strands completely if the business fails.

What actually backfills a brewery

Rarely another brewer.

Neal Bowman of Sturges Property Group, working the former Junk Ditch Brewery in Fort Wayne, Indiana, put the obstacle precisely: "The capital requirement to open to the public and stay relevant is the biggest challenge even if landlords are willing to participate."

The documented reuse pattern points somewhere unglamorous. A former brewery now houses a 165,000 square foot CubeSmart. An early 1900s Newark brewery became a 67,500 square foot storage facility. Self-storage adaptive reuse now accounts for roughly 179 million square feet nationally, about 10 percent of total storage inventory.

That is not coincidence. Storage is one of the few uses genuinely indifferent to a floor with drains in it, tolerant of awkward electrical service, and happy to have the ceiling height.

The best summary of the landlord's position came from the Brewers Association's own staff economist, Matt Gacioch, speaking to Bisnow: "A lot of these former brewing operations are sitting shuttered right now. It definitely puts the property owners in a tough spot right now if they don't have someone who's coming and knocking on their door."

And here is the gap that should bother anyone underwriting this asset class. Nobody counts it. There is no public tracker of how many closed brewery facilities are currently vacant, listed, or backfilled, or at what discount they clear. Two years of net contraction have produced an inventory of hard-to-relet space, and its size is unknown.

The cities that asked for this

There is a public-sector dimension to the vacancy that has gone almost entirely uncovered.

Between roughly 2012 and 2020, breweries became a favored instrument of American downtown and industrial-district revitalization. Cities wrote brewery-specific zoning categories, created new license classes, extended facade grants and in some cases tax increment financing, and marketed obsolete industrial fabric to brewers precisely because brewers would take space nobody else wanted. The logic was sound at the time. A brewery brought foot traffic to a block with none, it tolerated a building with a freight door and no windows, and it drew other tenants behind it.

The strategy worked, which is why the best examples are now genuinely valuable neighborhoods. San Antonio's Pearl District turned a shuttered early 1900s brewery into a 21-acre mixed-use quarter. Charlotte's Camp North End has used brewing and adjacent uses as anchors for a much larger adaptive reuse program, including concepts that pair a brewer with a recreation operator in the same envelope.

But the same policy that produced the Pearl produced hundreds of smaller versions in markets that could not support them, and those municipalities now hold the consequence. A district zoned specifically to attract brewing, in a building improved specifically for brewing, with a license class written specifically for brewing, has fewer alternative tenants than a generic commercial strip would.

For a lender that is not an abstraction. It changes the entitlement question on any workout. Converting a former brewery to storage, light manufacturing, or recreation frequently requires a use change through a body that wrote the original overlay to prevent exactly that kind of substitution. The zoning that made the brewery easy to open makes the building hard to repurpose.

The cities that will handle this best are the ones that treat their brewery overlays as legacy instruments rather than permanent policy, and move early to broaden the permitted-use schedule before the vacancy compounds. The ones that do not will discover that a revitalization tool with a ten-year life span leaves a twenty-year building behind.

The auction floor is the distress signal nobody watches

The cleanest real-time data on this sector is not a beverage statistic. It is an equipment auction result.

Grafe Auction's 2025 market report, covering six craft-beverage auctions, recorded 2,221 lots offered and 2,009 sold. That is a 90.5 percent sell-through across 466 unique bidders.

The equipment is liquid. That cuts against the simple version of the distress narrative and deserves to be said first.

The prices are where the story turns. The top lot of the year, a complete DME 10-barrel brewhouse, brought $47,500. A 40-barrel JVNW system brought $4,000. A 15-barrel NSI Newlands brought $7,500. Forty-five fermenters averaged $3,029 with a median of $2,750, and even the sweet-spot 10-barrel tanks averaged $9,125. Glycol systems ran a $2,100 median. Canning lines held value best at an average $6,186, against $25,000 to well over $100,000 for a new automated line.

For comparison, new tank pricing in 2025 ran about $6,100 for a 5-barrel jacketed fermenter, $7,100 for a 7-barrel and $8,100 for a 10-barrel.

The conclusion for a lender is specific and uncomfortable. The gear sells, and it sells at four figures against a buildout financed in six or seven. It is worth more than the leasehold improvements, which are worth roughly nothing to the next tenant. It is worth far less than the debt raised to install it.

Used tank clearing prices are a genuine real-time distress indicator for this sector, and essentially nobody tracks them. At the moment they are signaling abundant supply.

The collateral rules caught up

The federal underwriting standards moved in the same direction, and the timing is notable.

SOP 50 10 8, effective June 1, 2025, defines a special-purpose property as a limited-market property with a unique physical design, special construction materials, or a layout that restricts utility to the specific use for which it was built. That is a brewery, described in a rulebook.

The practical consequence follows. On a change of ownership carrying more than $250,000 of intangible value, the lender must obtain an independent going-concern appraisal from a Certified General appraiser that separately allocates value across land, building, equipment and intangibles. The equipment appraisal must state both Fair Market Value and Orderly Liquidation Value.

That second figure is precisely what the auction data speaks to, and the standard now forces it onto the page rather than leaving it as an assumption.

Two other provisions matter. The small-loan ceiling reverted from $500,000 to $350,000. Manufacturers in NAICS codes 31 through 33, which includes breweries, received an upfront guaranty fee waiver on loans up to $950,000 for fiscal 2026. And effective July 4, 2026, an outstanding 7(a) balance no longer reduces available 504 capacity, allowing a borrower to reach $10 million combined.

On the loan book itself, honesty requires two admissions.

Breweries are a modest SBA category, roughly fortieth by 7(a) dollar volume, with about $273 million authorized across fiscal 2020 and 2021. Pennsylvania is disproportionately represented at roughly 8.7 percent of national brewery 7(a) dollars against 2.6 percent of all 7(a) volume. Activity ran thin through 2025 before a first-quarter 2026 uptick to 21 loans averaging $778,633 at a 9.7 percent average initial rate.

And the figure this article most wants cannot be sourced publicly. There is no free brewery-specific charge-off rate by approval-year cohort. The SBA does not publish loss experience by industry code, and the commercial providers gate it.

What free comparator data does show cuts partly against the thesis. On a lifetime dollar-weighted basis, breweries, wineries and distilleries do not appear in the top-50 charge-off table at all, while limited-service restaurants sit at 6.6 percent and full-service at 5.9. The vintage stress that is visible is program-wide rather than sector-specific: the 7(a) portfolio's trailing twelve-month default rate reached 4.8 percent by March 2026, its highest since 2013, with 2022 through 2024 vintages defaulting roughly twice as fast as 2016 through 2020 cohorts at the same loan age.

Anyone asserting that the closing cohort and the defaulting cohort are the same should compute it from the loan file first. It is a reasonable hypothesis and it is not yet a demonstrated fact.

Why the cohort is failing

The demand backdrop is not ambiguous and it is not cyclical.

Gallup's 2025 consumption survey found 54 percent of American adults drink alcohol, the lowest reading in nearly ninety years of the trend and a point below the previous 1958 low, down from 62 percent in 2023 and 58 percent in 2024. Average weekly intake fell to 2.8 drinks, the lowest since 1996, from 3.8 a year earlier. For the first time a majority, 53 percent, describe moderate drinking as bad for health, up from 45 percent. Drinking among young adults fell from 59 percent to 50 percent.

Costs moved the other way. Aluminum can prices rose more than 25 percent after tariffs, with the aluminum import tariff doubling from 25 to 50 percent in June, and cans account for roughly 78 percent of packaged craft beer. Malt was still running 5 to 7 percent above the prior year in 2025, following a surge above 30 percent between 2021 and 2023.

Substitution is structural. Dan Abel, chief executive of Pilot Project Brewing, told Bisnow that non-alcoholic drinks went from one in fifteen of the company's Chicago taproom sales when it opened in 2019 to one in three today. Athletic Brewing, which produces nothing but non-alcoholic beer, is now the sixth largest craft brewer in the country.

The distress followed on schedule. Rogue Ales, founded in 1988, filed Chapter 7 in November 2025 with $4.9 million of assets against $16.7 million of liabilities, roughly $10 million of which is an unliquidated and contested claim, having already closed a 47,000 square foot production facility and three pubs. Iron Hill Brewery, founded 1996, closed its 16 remaining locations overnight in late September and filed with more than $20 million of debt against about $125,000 of cash. 21st Amendment ceased operations after 25 years when its lender withdrew support. Three Weavers, Dissent, Strike and Bosque all filed during 2025, and Bosque's Chapter 11 was dismissed in December because the company carried too much debt to reorganize.

What cuts against this

Five things complicate the reading above, and they deserve stating rather than burying.

Three hundred openings is not zero. New operators are still forming, and the Brewers Association characterizes 2025 as a year of correction showing early signals of recovery.

Craft gained share. A 13.2 to 13.4 percent move while the category fell 5.7 percent means craft outperformed beer, which is not what a failing product category looks like.

The equipment market is functioning. A 90.5 percent sell-through with 466 bidders is the opposite of frozen. Buyers show up and compete, which means the shuttered inventory has an exit even if the pricing is punishing.

Breweries are not obviously poor federal credit. Their absence from the lifetime charge-off leaders is weak but real evidence that this has not historically been a large-dollar loss category.

And the failure is concentrated by business model rather than spread across the sector. Microbrewery production fell 8.9 percent against 1.7 percent for brewpubs. What is failing is disproportionately the distribution-dependent format, which points to a model correction rather than sector-wide impairment.

What we are watching

Five measurable things will settle this.

Used tank clearing prices are the first and the most under-followed. If fermenter and brewhouse pricing firms, the shuttered inventory is being absorbed and the correction is working through. If it softens further, more equipment is arriving than the market can take.

The openings-to-closings ratio in the next annual release is the second. Two years of net contraction is a trend. Three would make it a structural reset.

The third is whether anyone starts counting vacant brewery facilities. The absence of that number is the single largest data gap in this sector and the reason the real estate consequence has gone unquantified.

The fourth is SBA brewery approvals after the first-quarter 2026 uptick. Twenty-one loans in a quarter is not a trend, but it is the first sign of lender appetite returning.

The fifth is whether the Orderly Liquidation Values now required under the current underwriting standard start showing up in realized loss experience. If appraisers have been marking brewing equipment near going-concern value, the auction data says they are wrong, and the correction will appear in recoveries before it appears in anything else.

Until those move, the accurate description of the American craft brewery contraction is this. The beer story is a demand story, it is well documented, and it is mostly about people drinking less. The building story is a collateral story, it is unmeasured, and it will outlast the beer by a decade.

Somebody paid for those trench drains. Nobody is going to pay for them twice.

Methodology

Brewery counts, openings, closings, production, retail value and employment figures are from the Brewers Association annual production report published April 14, 2026 and revised May 29, 2026, with segment detail from the same release. Readers should note two things. The Brewers Association count is definitional, covering small and independent brewers producing six million barrels or fewer with less than 25 percent non-craft ownership, so third-party trackers using broader definitions report a higher figure, near 9,696 for 2025 against the association's 9,578. And the association revised its own 2025 production figure after initial publication, from a 5.1 percent decline to 4 percent; the revised figure is used here.

There is no federal brewery permit series. The Alcohol and Tobacco Tax and Trade Bureau treats the Brewer's Notice as protected taxpayer information under Internal Revenue Code section 6103 and excludes brewers from its public List of Permittees, though it publishes permittee lists for wineries, distilleries, importers and wholesalers, and publishes beer statistics by state. Any figure presented as a federal brewery count is not one.

Equipment auction figures are from Grafe Auction's 2025 craft beverage market report, covering six auctions. These are realized sale prices, which makes them unusually reliable as pricing evidence, but they are a single auction house and a limited sample, and should be read as directional rather than as a national index.

Tenant improvement, electrical and buildout cost ranges reflect published 2025 and 2026 contractor and construction management estimates and vary substantially by market and scope. The McKinney, Texas project cost is from a state licensing record.

SBA figures are drawn from published analyses of the agency's loan-level FOIA data at data.sba.gov rather than from a direct re-derivation, and are flagged as secondary. The SBA does not publish charge-off rates by industry code; no free brewery-specific default rate by approval-year cohort exists, and the article does not assert one. Comparator charge-off figures use a lifetime dollar-weighted basis and are not comparable to resolved-loan default rates published elsewhere, which use a smaller denominator and produce materially higher numbers.

Consumption figures are from Gallup's 2025 Consumption Habits survey. Bankruptcy figures are from court filings as reported in trade and local press; note that reported secured debt in the Rogue filing has been cited at both $1.355 million and $2.3 million to the same lender in different accounts.

Key figures for citation

Metric	Value
Craft brewery openings and closings, 2025	300 and 481
Operating count	9,578, down 2.9%
Prior year, 2024	518 openings, 591 closings
Craft production, 2025	22,034,000 barrels, down 4%
Craft volume share of beer	Rose from 13.2% to 13.4%
Total beer category	Down 5.7%
Retail dollar value	$28.0bn, down 2.8%
Employment	191,000, down 3%
Microbrewery vs brewpub production	Down 8.9% vs down 1.7%
Restaurant tenant improvement cost	$200 to $400 per sq ft
Industrial and warehouse TI cost	$25 to $70 per sq ft
Electrical service required	400 to 800 amp three-phase
Panel upgrade cost	$35,000 to $180,000
Grease interceptor	$15,000 to $80,000
TI allowance tightening, H1 2026	8% to 15%
Equipment auction sell-through, 2025	90.5%, 2,009 of 2,221 lots
Top lot, DME 10-barrel brewhouse	$47,500
40-barrel JVNW brewhouse	$4,000
Fermenters, average and median	$3,029 and $2,750
New 10-barrel fermenter, for comparison	About $8,100
Self-storage adaptive reuse inventory	About 179m sq ft, 10% of the total
US adults who drink alcohol, 2025	54%, lowest in nearly 90 years
Average weekly drinks	2.8, lowest since 1996
Adults calling moderate drinking unhealthy	53%, up from 45%
Aluminum import tariff	Doubled from 25% to 50%
Cans as share of packaged craft beer	About 78%
SBA 7(a) portfolio default rate, March 2026	4.8%, highest since 2013

Frequently asked questions

How many craft breweries closed in 2025?

The Brewers Association recorded 481 closings against 300 openings in 2025, bringing the operating count down 2.9 percent to 9,578. That is the second consecutive year of net contraction, following 518 openings and 591 closings in 2024. Closures represented roughly 4.4 percent of operating breweries.

Is the craft beer industry actually shrinking?

By volume and count, yes, but craft is losing more slowly than beer generally. Craft production fell 4 percent in 2025 while the total beer category fell 5.7 percent, so craft's share of beer volume actually rose from 13.2 percent to 13.4 percent. Retail dollar value fell 2.8 percent to $28.0 billion, with craft holding 24.8 percent of beer retail dollars. The contraction is a beer-category problem more than a craft-specific one.

Why is former brewery space so hard to lease?

Because brewery buildouts are extremely expensive and almost none of the improvements transfer. Restaurant tenant improvement runs $200 to $400 per square foot against $25 to $70 for plain industrial, and a brewery is both at once. Trench and floor drains in sloped slabs, grease interceptors at $15,000 to $80,000, 400 to 800 amp three-phase electrical service, glycol loops, boilers, grain handling and cold storage serve almost no other tenant. To the next occupant those improvements are demolition scope rather than value.

What backfills a closed brewery?

Rarely another brewer. The documented pattern favors uses indifferent to drains in the floor and tolerant of awkward power and high ceilings, which in practice frequently means self-storage. One former brewery now houses a 165,000 square foot storage facility and an early 1900s Newark brewery became a 67,500 square foot one. Self-storage adaptive reuse now accounts for roughly 179 million square feet nationally, about 10 percent of total storage inventory.

What is used brewing equipment worth?

Far less than it cost. In 2025 auction results, a complete DME 10-barrel brewhouse brought $47,500 as the top lot of the year, but a 40-barrel JVNW system brought $4,000 and a 15-barrel system $7,500. Fermenters averaged $3,029 with a $2,750 median, against roughly $8,100 for a new 10-barrel unit. Canning lines held value best at an average $6,186 against $25,000 or more new. Sell-through was 90.5 percent, so the market functions; the pricing is the problem.

How does SBA SOP 50 10 8 treat breweries?

As special-purpose property, defined as a limited-market property with a unique physical design, special construction materials, or a layout that restricts utility to the specific use for which it was built. On a change of ownership above $250,000 of intangible value, the lender must obtain an independent going-concern appraisal from a Certified General appraiser allocating value across land, building, equipment and intangibles, with the equipment appraisal stating both Fair Market Value and Orderly Liquidation Value. Manufacturers in NAICS 31 through 33, including breweries, received an upfront guaranty fee waiver on loans up to $950,000 for fiscal 2026.

What is the SBA default rate for breweries?

No free source publishes one. The SBA does not release charge-off rates by industry code, and commercial providers gate the brewery breakout. What is publicly visible is that breweries, wineries and distilleries do not appear in the top-50 lifetime dollar-weighted charge-off table, where limited-service restaurants sit at 6.6 percent and full-service at 5.9 percent. Program-wide, the 7(a) trailing twelve-month default rate reached 4.8 percent by March 2026, its highest since 2013, with 2022 to 2024 vintages defaulting roughly twice as fast as 2016 to 2020 vintages at the same loan age.

Why are Americans drinking less beer?

Gallup's 2025 survey found 54 percent of US adults drink alcohol, the lowest in nearly 90 years of the trend, down from 62 percent in 2023. Average weekly intake fell to 2.8 drinks from 3.8, the lowest since 1996, and for the first time a majority, 53 percent, described moderate drinking as bad for health. Drinking among young adults fell from 59 percent to 50 percent. Non-alcoholic products are absorbing part of the shift; one Chicago taproom operator reported non-alcoholic going from one in fifteen sales in 2019 to one in three today.

Analytics.loan produces lender-grade feasibility and market analysis for SBA, USDA and conventional commercial real estate credit.

Sources:

• Brewers Association, annual production report, published April 14, 2026 and revised May 29, 2026

• Grafe Auction, 2025 craft beverage equipment market report

• U.S. Small Business Administration, 7(a) and 504 loan-level FOIA datasets, NAICS 312120 (Breweries)

• U.S. Small Business Administration, SOP 50 10 8, effective June 1, 2025, and the July 4, 2026 program decoupling

• Alcohol and Tobacco Tax and Trade Bureau, beer production and tax statistics by state

• Gallup, 2025 Consumption Habits survey

• Bisnow, reporting on vacant brewery real estate, May 2026

• Court filings in the Rogue Ales, Iron Hill Brewery and Bosque Brewing bankruptcy proceedings

• StorageCafe, self-storage adaptive reuse analysis

• Texas Department of Licensing and Regulation, project cost records

• Published 2025 and 2026 contractor and construction management estimates, brewery buildout and electrical costs