Hampton Roads September 2021 – Key Take-Aways
- Guest Speaker, Stuart Brodsky with NYU Schack Institute of Real Estate provided and overview of ESG and the role that it is playing in business. Companies are being judged by not only their consumers, but also their investors, making ESG an important element to consider.
- The concept of ESG is not new and we can look back to historical milestones in large corporate activity for examples of ESG. Such as, in 1914 Henry Ford implemented a policy to double the wages of his employees and support the idea of having an 8-hour day. The idea behind this was to stabilize the workforce and to guarantee people showed up to work. This encouraged high productivity for Ford’s employees.
- This past August, Business Roundtable issued a statement of purpose that said companies should not only serve their shareholders, but also deliver value to their company, to their customer, invest in employees, deal fairly with suppliers, and support the communities to which they operate in. This 2021 policy overturned a 22-year-old policy that specifically defined corporations principle purpose as maximizing shareholder value. These leading corporations are saying that it isn’t just about maximizing shareholder value, but it’s about doing it in a way that serves a greater interest for a broader number of stakeholders within a corporation and community.”
- Chris Ambrosio with Vandeventer Black said that the current focus seems to be on storage space and the multifamily unit. These two toggle back and forth between first and second place. Not so much can be said for the desire for office space.
- There seems to be a large overall trend of people being more mobile which requires more multifamily units as well as self-storage…causing a loose correlation between the two.
- Higher education building seems to be on fire. Sizeable universities with a sizeable operating budget are building left and right.
- Greg Schmitt with Kimley Horn says that Industrial development has been more than steady. There is not land available to support the desire for industrial development. You can’t find the land, and if you do find the land, there is usually already a deal in place for it. The outlook is that industrial is going to continue to show solid growth for at least the next two years.
- The quick service retail market continues to grow. Companies are branching out of their home market, raising Canes coming in from Texas and Del Taco coming in from California.
- John Berotti with Whiting-Turner says there is a big push for HBCUs to get funded which would lead to some development. NSU would see some growth because of this.
- The healthcare market does not seem to be slowing down. There is a continuing need to see what the next pandemic is and how people are reacting to this one. The bed space is necessary for the emergencies.
- There is a lot of opportunities for industrial work locally and nationally, however the market is very volatile, and it is a challenge to keep clients of trouble. Delays or dramatic increases in building materials are to be expected. Contractors are currently holding pricing for only 24 hours when it was customarily 30 days due to these potential increases in materials.
- The supply chain currently is also posing a problem in the current market under COVID. Single points of failures exist that can derail or delay a job.
- The current labor shortage isn’t really due to the government unemployment programs, as most of those have ended, it is basically just backlog. Companies can’t operate at the number of hours necessary to catch up.
- Companies are going automated for their warehouses, and they need the newest building to accomplish that. Speed and the speed of the traffic in and out of the warehouse is a priority for companies.
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