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.
However, while the ongoing pandemic shocks have driven many prices to historical highs, this isn't an issue of the last two years. The data for the analysis was "sourced from more than $7 billion in actual hard costs from more than 1,000 U.S. interior design projects completed between 2017 and 2021 across more than 70 major markets."
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