NEW YORK CITY – Stirling Properties, a full-service real estate advisory firm operating across the south, is exercising greater flexibility as it navigates rising construction costs passed through from steel tariffs, shortage of skilled labor and inflation of construction materials, said Donna Smith, senior vice president of asset management and new business at Stirling, at the International Council of Shopping Centers' Deal Making Conference 2019.
Due to labor shortages, particularly in the Southeast region where the firm operates, Stirling has had to actively work with clients to redirect costs from working with a freight that is farther away from a development or redevelopment site to execute projects.
Generally, dealing with changing variables around rising construction costs, Stirling has had to put its head down with clients, including tenants they represent, to change a project's development or redevelopment design to manage unexpected costs from tariffs and mounting expenses from raw materials, while maintaining a project's intended purpose and use, according to Smith. "We had to be flexible with tenants because we would have a whole different design and tenants would have theirs," Smith said. "Ultimately, you have to massage a layout to work for them."
Getting into the habit of cost flexibility is going to remain a theme going into 2020. The market is fairly active, and although there is not a lot of new development, there are numerous possibilities for redevelopment to add value for projects, Smith said. "The firm looks at a project to think about the value-add," she said. "We're looking at the changing world we face in terms of redevelopment."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Mariah Brown
Mariah Brown is the New York Bureau Chief and Real Estate Reporter for GlobeSt.com, covering the New York Metro area, Northeast region and national real estate trends. She is responsible for producing multi-media content, including articles, podcasts and video. Before joining the GlobeSt team, she served as a New York Times fellow, reported for the Associated Press in New York and Philadelphia and several other New York City-based outlets.
