www.REBusinessOnline.com January 2022 • Volume 22, Issue 10 2022 IS BRIMMING WITH UNCERTAINTY By John Nelson Survey takers forecast another uneven year as the industry grapples with inflation, supply chain issues and COVID-19 variants. Of all the potential factors, which do you think will affect the commercial real estate industry the most in 2022? $1 trillion infrastructure bill 9% GDP/job growth 7% Pandemic restrictions 13% Inflationary pressures 45% Supply chain constraints 26% Source: SREB 2022 Developer/Owner/Manager Forecast Survey f last year was any indicator, 2022 is shaping up to be another mixed bag for the overall commercial real estate industry. For the 11th annual edition of the Southeast Real Estate Business reader forecast survey, we polled our readers across two separate surveys: one for the brokerage community and another for developers, owners and managers (DOM). We also polled lenders and financial intermediaries in a separate survey. ( Go to page 17 to read the analysis of those findings, which are presented from a national perspective. ) When asked what is the single-most pressing factor facing the commercial real estate industry this year, brokers selected supply chain constraints the most at 38 percent of responses. The No. 2 selection was inflationary pressures at 28 percent. Meanwhile 45 percent of DOM I survey takers selected inflation as the No. 1 factor and supply chain constraints the second-most at 26 percent of responses. Developers and owners are particularly concerned with inflation as it has gotten more expensive to buy their needed construction materials, including lumber, steel and concrete. The Producer Price Index (PPI) for construction materials increased in November 2021 by nearly 35 percent from November 2020, according to the U.S. Bureau of Labor Statistics. Over the past five years the PPI for construction materials has risen by 53.4 percent. On the supply chain front, the long lead times for certain construction materials is complicating matters for developers and owners as they budget for their new construction see SURVEY, page 19 INDUSTRIAL PLAYERS OPEN WALLETS NEAR PORTS Due to renewed e-commerce demand and multibillion-dollar expansions at Southeastern ports, there has been a greater need for industrial projects in the surrounding areas. By Julia Sanders he Southeast is home to several major seaports including the Port of Baltimore, Port of Charleston, Port of Virginia and the Port of Savannah, among others. Industrial parks and facilities have started flocking to the areas near these ports because tenants realize these locations are well-positioned for reaching a wide range of customers. Steve Rowley, the Southeast market officer at CA Ventures, says he is T seeing the most industrial activity in the Sun Belt, and he says this high demand is directly tied to population growth. “The Southeast has great weather, relatively low taxes, good schools, good educational opportunities and then a great job market, so you’re going to see people continue to move into the [region],” says Rowley. “And industrial properties follow population.” CA Industrial, which is part of Chicago-based CA Ventures, is one of the developers for the I-16 Port Logistics site in metro Savannah in a town called Bloomingdale, which is close to the Port of Savannah. CA Industrial’s plans include developing a nine-building, 4 million-square-foot industrial park, and the firm is currently constructing the first three buildings. The project is slated to deliver by the first quarter of 2023. Rowley says his firm had its eyes on the Savannah area because of the positive changes happening in the market. “The growth of the Southeast and the growth in the city of Savannah, with the port improvements and just the way the public-private partnership works in Savannah, has been attractive to us,” says Rowley. “The labor availability there is still strong. We’re see PORTS, page 21 INSIDE THIS ISSUE Lenders place their bets on apartments and industrial in 2022, survey shows pages 17-18 New Hires and Promotions page 6 Lowe's Global Tech Center in Charlotte sells for $318 million page 7 Raleigh-Durham Market Highlights pages 14-16