Rising Costs Hamper Industrial Development
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Industrial developers are now having to compete with not just one, but two new stadium developments—at least when it comes to labor. That's the word we heard this morning during our 5th Annual Atlanta Industrial Real Estate Summit. There's a serious shortage of skilled labor coming our way, says Alston Construction's CEO Paul Little. And it doesn't help that building materials are also rising, making it more expensive for developers to build warehouses. Just how expensive? Paul says a max 5% this year. "But I do anticipate some higher construction costs next year primarily due to labor,” he says.
Paul isn't the only one sounding the alarm on development pricing. Others on our panel of industrial developer experts told our audience of more than 350 that next year should see steeper price hikes, especially with a pipeline of some 5M SF of new warehouses planned. “In a three- or four-month window, my pricing went up on my pro forma,” Trammell Crow Co's Mark Dishaw says. Stay tuned for more event coverage tomorrow.