CONSTRUCTION COSTS & VALUE

COVID-19 is credited with significantly increasing construction costs. The length of the pandemic has to some degree disrupted supply chains and dwindled inventory levels in certain sectors. How do you think this will impact valuation of real estate? When we conduct feasibility studies cost is of paramount importance. If increasing construction costs prohibit or reduce new construction would existing commercial/industrial buildings contribute more value than they do now? If you were contemplating a design build project would you shift your consideration to existing buildings for retrofit over new construction? There are many questions that should be asked. It will depend on the degree to which construction costs continue to rise along with availability of building materials since "time" is an important element to consider due to holding costs. Furthermore, waiting for just the right building may reduce business income (value) so in some cases a forced decision may be made out of necessity. COVID-19 has caused us to re-consider many components of value. #recg #feasibility #construction #commercialvaluations