Commercial Mortgages: Real Estate Developers Have To Be Worried About Today’s Economy | Economic news

This time around, the market looks set to absorb the tapering, but inflation fears are mounting due to soaring oil prices and lingering supply chain problems. Other inflationary concerns revolve around rising wages, skyrocketing commodity prices, and unprecedented government money for infrastructure that is pouring into the system at some point.

It is virtually impossible to lock in costs on new development projects. For apartment and industrial property developers, a major consolation is that rental growth is expected to continue to outpace inflation costs as demand continues to outstrip supply.

For owners of other types of real estate, the concerns are different. For office owners, the question is whether working remotely leads to lower demand for space occupancy? This concern took on more life when the delta variant of COVID-19 forced several heavy users to change posture and extend remote working indefinitely.

PricewaterhouseCoopers, which is a heavy user of office space and advises other heavy users of space, reported just a few weeks ago that most of their staff can now live anywhere and work remotely from permanently (which is different from undefined).

In Richmond, several large employers have recently changed their policies. On October 7, Capital One decided to postpone the reopening of its office indefinitely. Genworth has postponed their reopening until at least January. Banks are grappling with their delta variant response. Wells Fargo and Truist have changed their previous plans and will now return to their offices in November.

About Robert Valdivia

Robert Valdivia

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