Supply-Chain Issues and the Multifamily Industry
Construction costs, labor challenges and a lack of supply are all still affecting the apartment business. But unlike in the recent past, owners and operators are finding workarounds.
When I was in junior high, my dad waited in line at Toys “R” Us for hours to get my brother and me Tamagotchis for the holidays. Tamagotchis are virtual pets that people have to feed and take care of. They were the hot toy of the season, and of course they were practically impossible to get. People had to wait forever at the store, and sometimes there weren’t even enough. (And even if you were lucky enough to get one, it was likely that your teacher was just going to confiscate it anyway because you were fiddling with it during class, even though I just needed to feed him for like one second so he wouldn’t starve!)
Which is all to say that supply-chain delays have always caused issues.
Of course, the pandemic made these even worse. The past couple of years led to even bigger supply-chain issues, and not just for retail goods. Multifamily owners and operators were also hit pretty hard. It looks like the worst of the issues are over, but there are still some problems getting supplies and finding labor.
How is the multifamily industry coping? By taking projects in house, buying in bulk and thinking ahead.
“We knew where the pricing was going,” Joe Goldstein of Concord Real Estate Services told Gail Kalinoski during an interview for “Value-Add Projects Set Back by Supply Delays and Now Inflation.” “As long as we were able to project that things would cost this much more, the deal still penciled.”
NMHC reports that labor costs, the availability of labor and construction delays are all pressing issues. But the industry is adjusting.
“It’s not something that is keeping me up at night,” Brennen Degner of DB Capital Management, told Kalinoski.
I hope if you are experiencing supply-chain issues, you’re finding ways around them. And I hope you have a very happy holiday season.