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2023 CRE Construction Trends

February 27, 2023 by Marcus & Millichap Research Services

What New Construction trends mean for investors?

Some Construction Costs Ease, While Others Climb

  • The price of steel, lumber and shipping costs have retreated from historic highs
  • At the same time, financing new development has become dramatically more difficult and expensive

New Development Likely To Ease After Current Supply Wave

  • Projects that with financing in-place are still working through the pipeline, but the number of new projects are limited
  • Record completions for multifamily and industrial are in the pipeline, but pressure from new builds should begin to ease as financing limits new starts

How Will Waning Supply Risk Impact Investors?

  • Less competition from new construction will aid the owners of existing space across property types
  • While there are no broad-based CRE shortages today, the reduced number of projects could fall well short of demand when the economy strengthens

*Through January
Sources: Marcus & Millichap Research Services, BLS

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Filed Under: Research Brief

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This information has been secured from sources we believe to be reliable, but we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Buyer must verify the information and bears all risk for any inaccuracies. Any projections, opinions, assumptions or estimates used herein are for example purposes only and do not represent the current or future performance of the property. Marcus & Millichap Real Estate Investment Services is a service mark of Marcus & Millichap Real Estate Investment Services, Inc. © 2020 Marcus & Millichap and Limon Net Lease Group

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