Quote:
Originally Posted by Ant131531
All this talk on how Midtown office vacancies are at historic lows, yet none of these office projects seem to be in any rush to break ground. I'm afraid a recession is right on our doorsteps and that will be it for any talks of these breaking grounds for years.
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It's kind of an awkward time right now for projects breaking ground in general (whether it's retail, office or residential developments), despite the otherwise decent economy.
There's also:
*Rapidly rising interest rates, after several years of them sitting at record lows (which is making the cost of financing more expensive).
*Material costs at historic highs (this is only being worsened by Trump's recent hard line on trade).
*A historically tight labor market for construction workers (this is only being worsened by Trump's recent hard line on illegal immigration).
Developers and the banks are risk-averse by their nature, especially after being so badly burned during the Great Recession, and not many of them are willing to take the risk and build/finance property just for the sake of building/financing property without having tenants lined up.
IMO, a lot of people also got ahead of themselves as far as projects they proposed and investment plans when Trump was elected and boasted about his massive tax cuts (which he accomplished), yet they didn't actually expect him to follow through on his trade/immigration promises. So it will be interesting to see if all of these proposals/investment plans actually come to fruition.