At KPRS, we value providing real time data on the construction industry as a resource to our clients to help them build better and smarter. Given the current state of the market and what we have seen over the last two years, we decided to put into production a Quarterly Market Update outlining some of the key items we are paying attention to on a daily basis. The data provided will be an amalgamation of various sources along with proprietary data collected through our estimating process. The KPRS Preconstruction Group provides estimates for roughly $3Bn worth of work on any given year.
For this first issue, we decided to start by focusing on the hot industry of the last two years: The industrial market. With the increased interest in convenience, the industrial industry has exploded as companies like Amazon, Walmart and Target fight for market share in providing faster and faster delivery timeframes. JLL reported on the United States staggering industrial market:
• Over 137.9 million sf of industrial product was leased in Q3 2021
• U.S. Industrial rents increased this quarter to $6.76/sf (7.1%) since Q3 2020
• Vacancy rate hit a new record low of 4.3%
• The market delivered 85 million sf of industrial space in Q3 2021
Points of Interest
So how have these changes affected the market? At KPRS we are tracking the following elements to ensure on-time, budget-conscious projects for our clients:
• Increased lead times on materials
• Increased costs
• Material shortages
Due to the high demand of projects, lead times are increasing. Below are some materials experience increased lead times:
• Overhead doors, piping (underground and overhead)
• Tube steel, wide-flange material
• Roof metal decking, roof joist, roof fasteners, traffic signals, pre-fabricated guard booths, roof davit design & supports
With increased lead times on materials, KPRS has begun initiating orders earlier on to ensure the material is provided in a timely manner that fits into our project schedule. With constant tracking of these lead times, we have ensured no delays on previous projects.
As of September of 2021, Angel Barrera, KPRS Industrial chief estimator, noted the following figures based on 1.2mm sf developments. Since then, we have seen roughly a 3.5% price increase as of January 3, 2022.