Looking forward, not behind
Financial analysts are split on their predictions about the 2022 economy. Fluctuation in supply chain bottlenecks and staffing issues, along with lingering COVID concerns, have only raised uncertainty. Prognosticators in real estate, design, and construction all see a positive year ahead. The AIA Consensus Construction Forecast has a generally positive outlook, predicting an increase in construction spending due to pent-up demand. Their estimate is a 4.6% increase in non-residential construction, with health care facilities expected to be the strongest performing sector, with a 1.4% increase. Across other sectors, industrial will likely lead the charge again in growth. The huge spike in shipping transportation costs will have companies looking for more warehousing space. Multifamily will be the contender for growth, with a projected capital investment of $234 billion. The lingering questions about how to bring employees back into the office will remain. Lease transactions are rebounding but office vacancy is expected to hit its highest level since 1993, due to 53M s.f. of new office construction hitting the market. Retail, and especially grocery-anchored centers, are expected to be strong this year due to the expected 20% growth in grocery-based e-commerce. Credit to CBRE for market data. All eyes will be intently monitoring spending under the Infrastructure Investment and Jobs Act. The $550 billion earmarked is spread across several major initiatives, ranging from public transit projects to climate resiliency projects. The Houston Ship Channel is already a big winner under the Act, recently receiving $142.5 million to deepen and widen the critical container channel.