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Analysis

Project Costs Are Changing the CRE Landscape

Developers and operators are having to prioritize spending in new ways.

By Erik Sherman | March 16, 2022 at 07:39 AM

For some time, a lot of commercial real estate news has focused on the pain of macroeconomics—inflation, labor shortages, and supply chain disruptions.  According to a new analysis from Gensler, that’s causing developers and tenants alike to better direct and prioritize their spending.

That there would be an impact on strategy and business planning shouldn’t be a surprise. Building commodities have been expensive all through the pandemic. By February, material prices overall were up 20.3% year over year. And lumber spot prices are again over $1,400 per thousand board feet. Still shy of the over $1,600 back in May 2021, but not by that much.

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