Impacts on CRE: Construction Costs & Labor Shortages

[vc_row][vc_column][vc_single_image image=”861″ img_size=”full” alignment=”center”][vc_raw_html]JTNDZGl2JTIwaWQlM0QlMjJidXp6c3Byb3V0LXBsYXllci04Nzk1NDYyJTIyJTNFJTNDJTJGZGl2JTNFJTBBJTNDc2NyaXB0JTIwc3JjJTNEJTIyaHR0cHMlM0ElMkYlMkZ3d3cuYnV6enNwcm91dC5jb20lMkYxNzQwMjc5JTJGODc5NTQ2Mi1pbXBhY3RzLW9uLWNyZS1jb25zdHJ1Y3Rpb24tY29zdHMtbGFib3Itc2hvcnRhZ2VzLmpzJTNGY29udGFpbmVyX2lkJTNEYnV6enNwcm91dC1wbGF5ZXItODc5NTQ2MiUyNnBsYXllciUzRHNtYWxsJTIyJTIwdHlwZSUzRCUyMnRleHQlMkZqYXZhc2NyaXB0JTIyJTIwY2hhcnNldCUzRCUyMnV0Zi04JTIyJTNFJTNDJTJGc2NyaXB0JTNF[/vc_raw_html][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]As we inch our way out of the artificial recession created by the pandemic, there is a pent-up demand to pick-up where things left off. Especially in the construction sector. However, those with grand intentions of building their next project have been slapped in the face by an increase in construction costs and an unforeseen, baffling labor shortage.

Material costs across the board, from lumber to concrete, have risen to historical highs. Supply chain issues are the root of this problem as well as tariffs. Labor shortages, on the other hand, are the unintended consequence of the federal stimulus packages. In short, qualified workers have been disincentivized to return to the labor market.

Some developers are opting to push the start dates back on some of their projects to alleviate this headache. Others, including the larger developers, were able to hedge on construction costs and have kept the wheel turning on their projects. Then, of course, the projects that had financing in place were greenlighted and they have adhered to building schedules. The unintended consequence is lower supply, revenues are increased on existing properties and an increase in pricing.

This dilemma is not limited to one asset class. However, the sectors that performed well throughout the pandemic will continue to do so. The other asset classes, such as, hospitality and retail will simply take longer to go from start to finish due to difficulty in underwriting and financing. But, as real estate has shown before, it is resilient and will correct itself in the near-term future.

Contact Info

To learn more about how property tax issues can affect your investing strategies, please reach out to Tim Feagans directly at[/vc_column_text][/vc_column][/vc_row]

RETC Group was recently acquired by Ryan, a leading global tax services and software provider and the largest Firm in the world dedicated exclusively to business taxes. The combination of RETC and Ryan creates the largest property tax team in the United States with the most local expertise of any provider. RETC’s existing clients will continue to receive the excellent service they have been receiving and will now have access to Ryan’s value-added services and tax-saving strategies across more than 50 global tax disciplines.

Please follow Ryan on LinkedIn to receive updates on our next chapter, and visit to learn about all of the comprehensive property tax services now available to you.

Read the Press Release


This will close in 0 seconds