The main commercial building trends for 2016 are mostly hinged on economics. The main focus is on increasing demand for building, increasing building costs and rising construction wages.
In particular, we are seeing growth in the United States. Nashville has seen a good deal of growth, while there is a pull back in Houston occurring. Despite retail claiming the focus for its customers is turning online, and despite seeing more than 100 Macy’s stores closing, and Sears and Kmart shuttering many stores, construction claims retail is a growing sector.
One large commercial real estate firm reports that in 2016, the year-over-year numbers are promising a 24% increase in retail building. The disturbing part of this trend is that despite vacancies, new buildings cost more to rent.
That means that even if there are fewer retailers in the field and in a position to keep bricks and mortars stores, those stores will pay a lot more to rent new space. This, along with the run-away rents in mostly empty high-rises in San Francisco’s housing market, are alarming for the construction industry.
At some point in the near future, it seems we will be reading about the construction workers who have no jobs and no wages, not increasing wages.