9/21/21 – Detroit Mastermind Group

Detroit September 2021- Key Takeaways

• • • Many businesses are facing decisions about returning to the office.  Some are already back in the office with no masks, while others are requiring full vaccination and not allowing any business meetings outside of the office. (Rick Mattoon – Federal Reserve Bank, Tom Barrett – The State Bank)
    • Unemployment in Michigan fell a bit, but there is still a 6% gap from Feb 2020.  There is also a concern in the gap with motor vehicle manufacturing employment. (Martin Lavelle – Federal Reserve Bank)
    • In a survey, parents of children expressed more opposition to vaccinating children in the 5-11 age range than expected.  This could continue the transmission of new cases and could prolong the economic issues connected to Covid. (Martin Lavelle – Federal Reserve Bank)
    • The supply chain bottleneck is getting longer and with Covid concerns continuing it’s unclear how long it will remain. (Martin Lavelle – Federal Reserve Bank, Matteo Passalacqua – Etkin Real Estate Solutions)
    • Most companies and organizations remain very busy while experiencing issues due to labor shortages.  General labor positions are especially difficult to fill. (Todd Shelly – Professional Engineering Associates, Dave Dismondy – District Capital, Tom Barrett – The State Bank, Steve Sallen – Maddin Hauser, Matteo Passalacqua – Etkin Real Estate Solutions)
    • Industrial, commercial and residential remain strong.  There are a lot of new residential developments going up, despite higher cost of construction supplies. (Todd Shelly – Professional Engineering Associates, Dave Dismondy – District Capital)
    • Life insurance companies are shifting some of their investments to real estate. (Dave Dismondy – District Capital)
    • There has been an uptick in occupancy with kids going back to school.  Occupancies in some areas are at about 75% of pre-pandemic levels, which has scaled back a bit with cases rising. (Matteo Passalacqua – Etkin Real Estate Solutions)
    • Construction liens have leveled off while there has been an uptick in disputes among family members who co-own properties. (David Hart – Maddin Hauser)
    • Recently, EGLE presented a 2-day webinar on policy guidance.  Presented about contaminated sites and exacerbation,  environmental investigations and discussed key changes to the guidance, though there was conflicting information even within the agency. (Nick Maloof – Associated Environmental Services)
    • There is some concern about interest-only and low-amortization deals going through that don’t make sense economically. (Tom Barrett – The State Bank, Martin Lavelle – Federal Reserve Bank)
    • ESG is a growing field and something companies are paying more attention to as a way to appeal to shareholders and consumers.  It includes issues in the areas of Environmental, Social and Governance and companies are looking for guidance on how to identify both opportunities and risks in these areas. (Stuart Brodsky – NYU Schack Institute of Real Estate)
    • There is a robust history of companies paying attention to ESG-type issues, including shareholders and consumers protesting against companies profiting from apartheid, companies like Walmart funding the education of employees, and HP working toward both gender parity and environmental sustainability. (Stuart Brodsky – NYU Schack Institute of Real Estate)
    • The environmental piece of ESGs is one of the largest factors affecting real estate.  LEED rating system covers many of the same environmental concerns. (Stuart Brodsky – NYU Schack Institute of Real Estate)
    • The United Nations created 17 sustainable development goals, including ways to reduce poverty and social inequity, encourage responsible consumption, and protect the environment. (Stuart Brodsky – NYU Schack Institute of Real Estate)