Real Estate & Construction News (10/23/24) – Construction Backlog Rebounds; Real Estate Sustainability Grows and Split Incentive Gap Continues to Build Decarbonizing Barrier
In our latest roundup, construction output decreased, office utilization unchanged, September apartment starts fell 15% from a year ago as developers pulled permits, and more!
- Developers pulled permits for a seasonally adjusted rate of 398,000 apartments in buildings with five units or more, a 17.4% YOY drop and a 10.8% decrease compared to August 2024. (Leslie Shaver, Multifamily Dive)
- Construction input prices decreased 0.9% in September due to dips in two of three energy subcategories, reflecting the trend of overall material price stabilization over the past 12 months. Construction Dive (Sebastian Obando)
- In part due to the Federal Reserve lowering the interest rate, the construction backlog rebounded after a slump at the end the summer. Joe Bousquin (Construction Dive)
- The split incentives gap, where landlords and developers pay for energy efficiency upgrades while tenants enjoy lower energy costs, remains a major barrier to decarbonizing building. SmartCities Dive (Nish Amarnath)
- The Federal Reserve started its interest rate-cutting cycle in September. The Fed funds rate was lowered for the first time since the year 2020 by 50 basis point, giving the interest rate-sensitive sector of commercial real estate a long-awaited boost. Paulina Likos (CNBC)
- Despite the attention that has been drawn by prominent companies’ return-to-office mandates, office usage has remained largely the same. Michael Gerrity, World Property Journal).
- As the demand for mandatory ESG reports grows, the commercial property sector is moving towards sustainability. (Felicia Jackson, Forbes)
