2021: Growing Construction Delays, Higher Costs in Multifamily Construction
(and how to avoid them)
Industry survey asked multifamily construction firms how the spread of COVID-19 is affecting construction permitting, starts, completions, materials, labor and financing.
Argo Property Group & GC Tester Construction finished The Icelandic in 2020 without delays by working with Mega Supply Pro to circumvent supply chain issues and cost increases facing the industry.
According to a survey of Multifamily Developers conducted in March of 2021 by the National Multifamily Housing Council, – a record 75% of the sector is experiencing major construction delays.
Of this group, 77% reported delays in permitting due to COVID-19, and a solid three quarters still reporting delayed starts one year into the pandemic. The main reasons cited for delays in starts were permitting, entitlement, and professional services (72%).
Additional findings include:
83% reported significant impact by the lack of building materials and finishes, the highest share recorded since the survey began in the first months of the pandemic.
A record-high 93% of respondents cited price increases in materials, an increase from the 82 percent of respondents in the previous round. Of those developers who saw price increases for materials, 40 percent reported price increases of over 20%.
36% reported being impacted by constraints in labor availability.
The greatest share of respondents in history of this survey reported experiencing deals being repriced since the last time they were surveyed.
Construction companies and real estate developers continue to innovate in the face of economic and logistical challenges posed by the outbreak, with half of respondents implementing new strategies to better navigate the hurdles posed by the virus.
While the above stats and prognoses are pretty grim, Mega Supply Pro is one of few players in the business of construction sourcing and materials procurement that has a feasible solution:
We act as a manufacturer-direct wholesaler of construction supplies and finishes, handling sourcing of all materials – from concrete and lumber to plumbing fixtures and appliances, all under one roof.
Mega Supply Pro has eliminated third-party markups by shipping products from its global distribution network directly to the job sites or to Mega’s facilities for short- or long-term storage. Instead of relying on one supplier, or even a handful of suppliers in major markets, we work with a diverse network of producers from all around the world to get developers the materials they need, when they need them.
Our existing relationships with manufacturers paired with our logistical expertise allow us to prioritize our customers' orders, and bypass the hurdles experienced by everyone else in the industry, as seen from the report outlined above.
Developed by The Riverwards Group, Kensington Courts complex consists of 150+ residential properties, and with Mega Supply Pro’s help being build as you’re reading this, without delays or material shortages.
Mega Supply Pro will review your specs, and present a submittal package, all within the existing budget. Then, we’ll handle logistics for when and where the materials need to be delivered. Mega Supply Pro also has the capacity to store materials for clients if needed. That way, clients can purchase materials in advance without having to worry about storing them until they are ready to build.
Contact us for more info.