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Future of Commercial Real Estate Construction

What to Know About the Future of Commercial Real Estate Construction

September 7, 2021

Commercial real estate construction professionals are navigating an unprecedented future where the demand for quality of work remains high, and formidable labor and supply chain obstacles make it difficult to stick to project timelines.

Understanding the scope and scale of these challenges and recognizing what construction professionals can do to mitigate and overcome them, is critical for organizations looking to thrive in today’s (and tomorrow’s) environment.

It’s Short on Labor & Talent

A chronic and continuing labor shortage has plagued the CRE construction industry—the result of an aging workforce and a woefully neglected pipeline of new talent. The outlook looks even more grim when you tack on the possibility of burnout in a job that’s often overworked and pushed to the limit.

It’s Short on Product & Building Material

An urgent issue for commercial real estate construction now and in the near future is the lack of available products and building materials due in large part to continued supply chain disruptions exacerbated by the lingering global effects of the pandemic. Even “quick ship” items that could formerly be relied upon to show up can no longer be guaranteed.

It’s Short on Time

The combination of supply chain disruptions and labor shortages have made, and will continue to make, setting and sticking to delivery schedules challenging. Building owners/landlords and CRE construction professionals are increasingly moving away from deadline clauses, and even inserting language that clears responsibility for any delays or disruptions due to supply chain issues.

The Model CRE Construction Company

Much of the hard work of commercial real estate construction takes place in the design stage. The standout commercial construction companies of today and tomorrow prioritize working with architects and materials companies who have demonstrated they can be creative with material selection and design choices. The need to be flexible, creative, communicative and collaborative is imperative.

It will also be important for CRE construction companies to negotiate enough time to successfully complete projects. Planning ahead as much as possible is vital for logistics and budgeting, and successful players should be ordering products and materials earlier than ever to lock in prices and bake in added time for potential disruptions.

Relentless creativity is also becoming a requirement for construction companies. Organizations that once required three bids for every major line item in a contract are now reaching out to dozens in search of highly specific services or materials.

Commercial real estate construction needs to be realistic. Delays are inevitable in today’s challenging environment, and communication helps shorten build delays.

Looking Ahead

As mentioned above, the labor shortage in Midwest real estate construction is considerable, but there are several long-term plays—like employment and skills development programs—that CRE construction firms are investing in today, in the hopes of bearing fruit in the future.

Huntington Construction, for example, works with local Midwest colleges to help create and fund programs that encourage young people interested in the skilled trades. The firm also partners with and supports trade schools and programs/academies that teach young adults vital skilled trades industry skills.

Programs like these support the next generation of talent and skilled workers. They also plant the seed for valuable relationships that will translate directly to hiring that bolsters the employment base in the not-too-distant future.

The commercial real estate construction industry of today and tomorrow demands you think and prepare differently than before—business as usual no longer equates to future success.


If you’re interested in receiving a complimentary, no-obligation commercial real estate consultation, contact Farbman Group and get in touch with an expert today.

Categories: Blog Post