Key Take-Aways
• Business is strong on the legal, environmental and 1031 transaction front.
• Report of a research group on officing both now and in the future shows:
o Currently – 15% of companies are officing
o By January 1 – 25% of companies will be officing
o By July 1 – barely 50% will be officing
o Biggest reason is due to liability concerns re: COVID.
• Industrial/residential activity is still strong
• Financing for retail projects is very difficult.
• 33,000 restaurants have closed nationwide due to COVID. Many more restaurants are reducing their footprints.
• Construction costs are easing a bit, but starting to see supply shortages. Lumber prices are definitely increasing, due to the mill shutdowns during early days of COVID. Other supplies will be similarly impacted with price increases: windows, piping, etc. Competition on the construction side/bids should help even out some of the total project costs.
• The six-month deferrals that were offered starting in mid-March due to COVID will start coming due later this month and for the next few months. Banks will find out what real problems they have on their books.
• Many customers are moving from the large banks to the smaller, community banks.
• Low interest rates are keeping banks busy with refinancing; increasing the volume of 1031 transactions; helping with residential sales.
• Seeing a tale of two markets: a real divide between Main Street and Wall Street. Also seeing this in the land world: nothing on retail/hospitality end; residential/industrial lots of activity.
• Seeing a slowdown of activity on the construction side; lots of RFPS going out, but no one is taking action on them.
• The Architectural Building Index is currently below 50. 50 is the median point for growth.
• Savannah is a strong market; the downtown area is back to normal with activity and the hospitality occupancy on the weekends is up to about 70%.