In April 2020 — just as the pandemic was becoming a reality — NAIOP began surveying our members on how the coronavirus was impacting their businesses.
The survey results have provided real-time insights into how the outbreak was affecting development and the measures that commercial real estate firms were taking to retain tenants, improve safety and shore up their operations. Respondents represented a range of professions, including developers, building owners, building managers, brokers, lenders and investors.
During the 15 months spanned by the survey, expectations for a steady but sluggish recovery were a consistent finding. During our final survey in June, one of the biggest repercussions of the pandemic was revealed: Although business conditions have improved for commercial real estate, 86.6% of developers reported delays or shortages in obtaining construction supplies — an all-time high since the survey began in April 2020. This suggests that supply chain disruptions may outlast other effects of the pandemic, increasing construction costs and slowing new development.
Respondents reported rising deal activity for office and industrial properties, and for the first time since NAIOP began the survey, most participants reported retail property acquisition or development activity in their markets. Long-standing delays in permitting or entitlements remain a hindrance to development.
While we were all surprised by the fast-rising pandemic and couldn’t have been fully prepared for the unthinkable, the lessons we learned from past downturns helped inform our decisions as we navigated these uncharted waters. Our industry wasn’t over-leveraged or overbuilt; we rapidly adapted to new ways of working; and companies made strategic decisions to expand or refinance as opportunities allowed.
As our industry and global economy rebounds, I encourage you to look to NAIOP for knowledge and connections, whether through our upcoming conferences, our robust library of courses
or our research. I couldn’t be prouder of how much we have shared with
each other throughout the pandemic. I look forward to a stronger organization and industry as the recovery moves forward.
Molly Ryan Carson, Senior Vice President
of Real Estate Development, Market Leader,
Ryan Companies US, Inc.
2021 NAIOP Chair