Let’s Talk Construction Costs (And What That Means for Your Property)
Over the last five years, construction input costs have risen by more than 40%, according to the Producer Price Index (PPI).
When costs climb this quickly, fewer projects get built. Layer in higher interest rates, and it becomes even harder for developers to make new deals pencil out.
That shift directly impacts property owners. With fewer new buildings hitting the market, existing properties naturally become more valuable. Reduced supply paired with steady demand creates upward pressure on pricing.
We’re already seeing signs of this in the industrial sector. Despite a market cooldown, available inventory continues to get absorbed. In 2024, the industrial vacancy rate was over 14%. Today it’s closer to 12%.
For property owners, this means two things:
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Your existing assets may be positioned for stronger demand.
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Timing and market knowledge matter more than ever in maximizing value.
I track these trends closely and help owners understand how shifting costs and market dynamics affect their properties.
If you have questions or would like to discuss your commercial real estate needs, let’s connect!
Emma McDaniel CCIM
emma@mcdanielandco.com
864-576-4660
