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Category: Apartments, Healthcare, Industrial, Multifamily, Net Lease Retail, Office, Shopping Centers Tags: construction, Development, Supply Constraint

New commercial real estate construction is limited as inflation continues to put barriers on building material acquisition yet simultaneously drives the value of existing properties. According to Trading Economics, the current inflation rate sits at 8.5 percent as of March 2022. Experts predict that the record growth in industrial and multifamily in 2021 cannot be sustained into 2022. Pricing surges occurred across all asset types, according to RCA data, due to the scarcity of new properties. All retail assets, including shopping centers and freestanding retail, climbed 16.3 percent year-over-year in pricing, while apartment assets increased 22.4 percent, industrial pricing hiked 30.1 percent, and office pricing grew 10.3 percent. Property growth will likely be stagnant across CRE sectors as supply shortages prevent developers from breaking ground.

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