7 Ideas for Containing Construction Costs
Though the real estate industry has seen a development rebound over the past decade, rising construction costs are weighing down the buoyant market. The persistent skilled labor shortage makes staffing and maintaining sites expensive. Materials are pricier, and now tariffs on steel, aluminum and lumber imports may only make the problem worse. At the same time, interest rate growth is converging with all these issues, making project financing more difficult to obtain and more costly.
A recent survey of top construction lenders conducted by Construction Lender Risk Management Roundtable found that almost two-thirds said they saw projects running over budget either more often or much more often, and 87 percent said they saw projects running behind schedule, driving up the risk of project defaults and unfinished sites.
Everyone involved in the built environment — including real estate investors, developers, lenders, contractors and architects — is looking for ways to keep costs down without sacrificing quality, as well as eliminate the delays, mistakes and course corrections that bust budgets.