Industrial Construction Costs Ease But Remain Elevated

Cushman & Wakefield has launched its North American Industrial Costs Guide, showing that pandemic-related supply chain constraints, which helped drive commodities costs up, continue to have a lingering impact on overall costs and material lead times for construction of new industrial buildings. A significantly higher interest rate environment in the United States and Canada has also provided additional upward pressure to costs.

“Construction activity in the industrial sector has raced to keep up with robust demand of the last two years in North American markets. While industrial construction pipelines continue at historically high levels, the sector is facing several headwinds,” said Brian Ungles, President, Project & Development Services at Cushman & Wakefield. “The demand for industrial space — largely fueled by the e-commerce sector, has led to historic levels of construction, and competition for materials and labor. This along with widespread inflation, has driven construction costs higher.”

Surveyed by Cushman & Wakefield, Construction contractors expect increased challenges in project execution timelines and material lead times. The vast majority (85%) expect slight (66%) to significant (19%) increases in material lead times. This is marginally more optimistic than sentiment from a year ago when 88% of GCs

Facility Management (Continued from page 20) in the number of dedicated workspaces, while the spaces devoted to communal areas and amenities would increase. The ratios of private-to-public space will shift in the public’s favor. w SMEs recommend developing new industry metrics and benchmarks for understanding how organizations plan and measure space.

Expect More Digital Twins and Virtual Office Environments

w The rapid inclusion of IoT devices in the built environment will enable digital twins. Debate raged about whether most buildings would have a digital twin by 2030. While expected material lead times to increase slightly (36%) to significantly (52%). While the industry may see material lead times easing, significant issues remain with electrical gear and regionally with core materials, such as cement and sand. w Virtual office environments will continue to grow in importance, though many do not think that cartoon-like avatars would be the preferred choice.

The priciest markets are located in the Western U.S. and Canada. Of the top six most expensive markets, four are located on the West Coast and two are located in Canada. The most expensive market is Portland, where costs for medium buildouts average $105 psf and large buildouts average $98 psf.

The industrial sector has been among the winners in the wake of the pandemic. Skyrocketing e-commerce demand — along with focus on improved supply chains and increased interest in manufacturing onshore — has driven North American industrial demand over the past three years. In the U.S. alone, over 1.3 billion square feet (bsf) was absorbed between 2020 and the end of 2022.

40% believed buildings would have a digital twin, the majority did not.

Resist Employee Monitoring

w Employee monitoring is on the rise. Yet, SMEs resist the use of digital employee monitoring, noting that for knowledge work, measuring by results and trust are more effective means for increasing productivity.

w 60% expect governments will enact more limits on workplace monitoring.” on-site private members club CORE, hospitality-grade amenities and service elevate the offering. Further incentivizing the return to the office, retail is carefully curated, and two floors in the middle of the tower are dedicated to wellness, a lounge and conferencing facilities — all with panoramic city views. Additionally, the top floor below the spire culminates these amenities with an enchanting private bar and lounge.

The Redwood Park, which consists of nearly 50 mature redwood trees transplanted from the Santa Cruz Valley to the site in 1974 and now over 100 feet tall, is also upgraded and additional landscape activates the site perimeter. Adding seasonal color to the space, Mark Twain Street — the alleyway from Sansome Street — is lined with plum blossom trees, leading up to the base of the pyramid featuring curated cafes, shops and restaurants.