The current environment continues to affect our businesses in rapidly evolving ways. Most municipalities have deemed construction an essential activity and, as such, the majority of our jobsites are pushing forward. However, in some parts of the country, it is unclear if all construction projects qualify as essential activities, or in a couple cases there are conflicting directives from cities, counties and states. Another challenge we see on several jobs is reduced crew sizes, which causes decreased productivity and could result in schedule delays. As can be expected, many new safety practices are being implemented on jobsites, including controlled access zones to enforce mandatory distancing and no-contact thermometers to ensure that anyone with a fever is made aware and sent home. Additionally, to prevent delays while maintaining social distancing, a few municipalities have begun to implement virtual inspections. We have a unique opportunity in the construction industry to lead the way in finding safe ways to keep our economy alive and people working, so we will continue to advocate for safe working environments and continued progress for our clients.

As I said last week, developments are not all impacted in the same way. Some projects in earlier planning stages have been put on a temporary hold, as uncommitted construction debt will be difficult to access in the coming weeks—or even months. For capitalized projects that are seeking entitlement approvals or that are in mid-construction, schedule delays continue to be the most common short-term consequence. In the long term, the effects are likely to vary by product type. A few prominent examples of this are decreased demand for new hospitality developments and increased demand for more affordable housing. In the industrial landscape, leasing is still ongoing but expected to continue at a slow pace in the coming months. Additionally, we are seeing fewer developers take their stabilized or mature product out to market, preferring to let the peak of the crisis pass before exiting their investments. We are also expecting a smaller pool of buyers in the short to medium term. However, there will likely be a long-term increase in demand from e-commerce businesses, as well as warehousing as current inventory levels for many products have proven to be insufficient. We are also anticipating that more companies will focus on diversifying their supply chains, which could bode well for both domestic manufacturing as well as secondary ports.

Written by Molly McShane, Chief Operating Officer of The McShane Companies
Published by ULI Chicago

Latest News

Molly McShane Named CEO of The McShane Companies

Molly McShane Named CEO of The McShane Companies

National real estate development and construction services provider The McShane Companies announced that its Board of Directors has appointed Molly McShane as Chief Executive Officer effective October 1, 2020. Ms. McShane previously held the position of Chief...

2020 ENR Midwest Best Project Award

2020 ENR Midwest Best Project Award

Bystronic's Experience Center in Hoffman Estates, Illinois has been named an ENR Midwest Best Project in the Manufacturing category. The new building offers 165,000 square feet of space to support Bystronic’s North American headquarters office, showroom, manufacturing...

2020 Industrial Influencers

2020 Industrial Influencers

John Dobrott, President - Industrial at Conor Commercial Real Estate, was named to GlobeSt.'s list of Industrial Influencers. The award recognizes leaders who have made a mark on the industrial real estate market. John's forward-looking view of the industrial market...

Conor Completes Bystronic’s New Experience Center

Conor Completes Bystronic’s New Experience Center

Bystronic Inc. has relocated their North American headquarters to Huntington 90 Business Park in Hoffman Estates, Illinois. Conor Commercial Real Estate served as the developer of their build-to-suit headquarters facility and Experience Center. “Bystronic is a...