South Florida CRE Leaders: What’s To Come In 2022

Bisnow // December 17, 2021

By Deirdra Funcheon

The past two years have been hectic, to say the least, with the coronavirus pandemic upending lives and markets around the globe. Among the regions that fared better than others is South Florida, which emerged relatively unscathed.

Regional commercial real estate experts are now looking ahead to 2022, and they spoke with Bisnow regarding what's on tap for the new year. These comments have been lightly edited for style and clarity.

CONSTRUCTION COSTS

Ian Weiner, President and CEO, PEBB Enterprises

“The biggest macro concern is inflation and how that will affect the overall economy. We’re seeing it on the construction side, with construction costs surging. But we’re fortunate to have rents rising in lockstep with those cost increases. That will continue in 2022. We’re seeing land costs increasing because of the multifamily and industrial construction going on, so it’s getting expensive to acquire land with such limited supply. I’m still bullish, but we’re getting to the point in the market where land prices and construction costs will make it a little more challenging to make deals work … The land constraints and rising prices could lead to some investors looking for opportunities just north of the tri-county area, such as the Treasure Coast.”

Chris Jahrling, Vice President and General Manager, Turner Construction, Miami

"We are facing impacts from rising costs, increased lead times, source material delays, transportation delays and worker shortages. And it is not going to change soon .... We track availability and costs for all major construction commodities so that we can provide our clients the most current market information so they can make informed decisions. There are several measures that can be taken to mitigate these risks. For example, it is important to lock down critical commodity-based items as early as possible (i.e. Mechanical & Electrical Equipment, Specialty Glass, Steel) as well as to buy as close to the source as possible. This does increase complexity in managing but savings can be realized. Additionally, early involvement by the general contractor or construction manager on the project is the best way to optimize design, cost and schedule."

Adam Mopsick, CEO, Amicon

“Markets are smart and have a tendency to work themselves out, even if it takes a while. During this near-term surge, projects are at risk of taking longer and costing more as there are shortages of labor and materials. In 2022, I believe we will see labor pools from other, less active locations finding their way into more heated areas like South Florida and I have confidence the supply chain issues will eventually ease. Use a large local expert or project manager with a strong local network and larger portfolio to help mitigate these issues.”