A new crop of investors is staring down the barrel of rising inflation for the first time, and the impact on the CRE market—long viewed as at least a partial hedge against such increases—remains to be seen.
Shortages for everything from computer chips to lumber have led to mounting concerns about inflation in financial circles over the past year, and that debate has magnified recently as it's become more clear that demand for many materials is far outstripping supply.
This dynamic "typically happens during recoveries, but the unique nature of this crisis, creating both voluntary and involuntary supply bottlenecks, will take longer to rectify," says Ryan Severino, Chief Economist at JLL in a new post. "It is always easier to take supply offline than it is to bring it back."
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