Keeping an Eye on What’s Ahead
NAIOP has had a solid start to the year, with strong membership engagement, successful conferences bringing together thousands of CRE leaders, and timely and valuable research recently published by the NAIOP Research Foundation.
Although commercial real estate was not untouched by the pandemic, it was largely spared the unprecedented economic impact felt by other industries. While we’re all hopeful that the darkest days of the pandemic are behind us, there are small warning signs that it may not be all blue skies ahead.
Intense geopolitical strife and supply chain disruptions have heightened our awareness of how global events profoundly impact the U.S. economy, in this case producing inflationary increases to the highest levels in 40 years. While American households have largely pocketed significant savings during the pandemic – an I.CON West keynote economist noted that various stimulus funds helped increase collective household net worth by $30 trillion, a 25% increase in average household net worth in just two years – skyrocketing fuel and grocery prices will inevitably impact consumer confidence and slow spending.
Thankfully, it doesn’t appear that our industry is overheated or overextended, and so our biggest challenges likely remain in materials supply and labor shortages. Many of you have probably experienced struggles to obtain everything from roofing trusses to electrical panels, ordering materials sometimes a year in advance and still not having them available when needed. Unfortunately, I don’t see an end to this in sight, and so again we’ll pivot and adapt to these ongoing constraints.
The recession of 1990-1991 came just a few years after I’d become a partner in my business. Lines of credit were frozen as banks were failing. It was a frightening but valuable learning experience for me. While I don’t anticipate that’s the direction we’re headed today, signs of a slowdown in the capital markets, adjustments in the economy, and the cost and availability of products do remind me of that troubling time.
I believe that our industry is more disciplined than it was in 1990, prepared to identify and overcome these issues. NAIOP members should know that the association is also ready and equipped to guide our industry through any challenges that emerge.
Our conferences – I.CON East in June, and CRE.Converge in October – will share expert outlooks and case studies on the issues surrounding us today and in the future. New on-demand courses on adaptive reuse and starting a private equity fund will inform learners about all aspects of the adaptive reuse approach (as redevelopment opportunities abound), and the intricacies of establishing a new source of capital, respectfully.
On the research front, our Foundation’s newest reports on industrial demand and U.S. seaports and conversion of former office space to life science, medical and multifamily are especially timely as opportunities abound in these sectors. Development magazine’s new issue delivers meaningful explorations of adaptive reuse, multilevel industrial, demographic demands and more.
Our advocacy efforts remain strong as our team focuses on issues both in Washington, D.C., and in states and provinces across North America. Keeping our members informed and engaged legislatively is among our leading priorities and one that sets NAIOP apart from other organizations.
As we enter the second half of 2022, I am confident that the support NAIOP provides its members will help guide, inform and connect us. I encourage you to take advantage of member resources, and if you’re not a NAIOP member, to consider joining our organization. There’s strength in numbers and NAIOP is a tremendous investment in your career and business.
Jeff Milanaik is a Partner – Northeast Region with Bridge Industrial. Milanaik opened the Northeast Region office in Parsippany, New Jersey, in October 2014, and is responsible for the acquisition and development of investment-grade industrial buildings that provide opportunities to add value. He is the 2022 NAIOP Chair.