Detroit October 2021- Key Takeaways
- Martin Lavelle with Federal Reserve Bank said, as far as the economy goes, we are still trending at a 5% growth, although it is down from the recent 6.5%. But it is strong. Some news now is that only 61 ships are anchored in the harbor off of Los Angeles. Larger companies are paying a premium and chartering ships to get their goods ashore faster. Money is available for durables. Prices are definitely going up. There is still worry about COVID. There is talk about whether or not to make the vaccines mandatory for schools and loop it into the mandatory vaccine schedule. When a poll was taken about that, the votes were roughly half and half. Maybe the Merck pill will pull some anti-vaxxers into the mix of protection.
- Retail is very, very strong. No slow down at all. Brad has some new clients and new things to worry about. Business is the best in many years, and it looks like we will have a record year. There are no new Targets, Kohls, or other stores like that. The new businesses include industries like restaurants, groceries, fitness, optical and physical therapy. Pricing is pushing up on most things. (Brad Rosenberg, Mid-America Real Estate)
- Now there is an auto supplier talking about having to let some employees go because the chip shortage in the supply chain is still a big issue. Nick commented he recently lost 2 Ford deals to another company down south. We have teamed up with PEA to go after, identify and pre-screen sites for approval. As a result, we have 500 to 600 acres ready to go. Unfortunately, policies are being changed so often. (Nicholas Maloof, Associated Environmental Services)
- Steve Sallen with Maddin Hauser – Our office is basically back, but with fewer people, because they have a hybrid attendance now. More people are working remotely than before the pandemic. This is not negatively impacting our business. We submitted a purchase agreement for three industrial buildings. We thought we had a chance, but it sold to someone else who must have way overpaid for the assets.
- Tom Barret with The State Bank’s office is in Livingston County, and they have been back since June or July with no masks, no social distancing requirements, and no talk about vaccines or testing. Not at my branch, but some of our branches have had to change their office hours and lock up between noon and 2:00 because of the shortage of staff. Business is very strong right now. The cost of capital has gone up, and that impacts several things. There are several PPP loans that still need forgiveness.
- Industrial properties are in higher demand than there is supply. That goes for investments too. The office sector is picking up. There are now more reasonable deals with office space.
Supply chain difficulties are impacting us. Employers are struggling to get workers. Inflation is also affecting businesses. Inflation makes higher bumps easier. Business is very good right now. (Michael Ziecik, Farbman Group/NAI Farbman) - David Hart with Maddin Hauser says disputes are developing because of supply chain difficulties. While cases are starting to develop, courts are taking steps to get back in their courtrooms. He recently tried one case in person. Only one. Most of the cases are still handled on Zoom.
- Large buildings have plenty of office space available. Some are 100% vacant. Hard to believe the amount of office space available right now. The demand for medical office space is strong and more medical is coming on the market. There is a lot of money chasing that space too. COVID has been very good for this asset industry. There are a lot of ambulatory surgical centers. Beaumont is still trying to find the right partner to merge with. They have been very aggressive with their growth and are carrying a lot of debt. They really need a partner now. (Matt Fenster, Etkin Real Estate Solutions)
- Peter Rogers with CBRE said even though they are tracking 553,000 square feet right now, inventory is low. We did lease a few million square feet this year so far.
Business is strong, but they do have their share of woes about supply chain, labor, components, and they also have to pay attention to the weather more in Michigan. The outdoor building is not year-round here. eCommerce is a big factor in their business, and fortunately, Amazon and others continue to grow, so their business is good.
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