Source: MPA Mag —
Commercial real estate officials gathered this week to discuss the impact of inflation on development and construction amid a backdrop of inflation.
“The big picture out there, certainly from a capital markets perspective, is difficult right now,” Spencer Levy, global client strategist and senior economic advisor for CBRE, summarized during the company’s weekly discussion. “Things are expensive. There’s not a lot of labor, but at the same time, really busy.”
How does inflation affect CRE?
Danny Monteiro, chief operating officer of the Reidy Contracting Group, concurred but noted how busy things are: “We have a good backlog into 2023 for the majority of the year,” he said. “I would say that our challenge is right now our schedule. Understanding the budgets, I think is something that is manageable to a certain perspective, as long as the pre-construction period is over a year, where then you have to worry about the volatility of material costs going up or down. But then the scheduling as far as getting the jobs released and getting forward, moving on from a pre-construction perspective has been going pretty well. The challenge, of course, is you’re entering into a market now where you have sub of subs per se that potentially are either going out of business or there’s challenges with them. So managing that perspective, as well, is something that we’re keeping on top of. But for the most part, I think it’s busy out there right now.”
The Reidy Contracting Group has been operating in the tri-state area since 2010, focusing mainly on interior construction.
The standard cost of construction per square foot
