The Long-Term Impact of the Supply Chain Crisis on Commercial Real Estate

Supply chain stories continue to make headlines as manufacturers and retailers struggle to keep shelves filled, and consumers feel the pain of product shipping delays and price surges. This global traffic jam began when the logistics pipeline that delivers $1 trillion worth of electronics, games, toys and furniture each year was abruptly disrupted, leading to downstream effects for industries that provide critical components and raw materials. Not only are freight costs up, but the entire supply chain is backed-up, and it’s taking twice as long to receive goods as it did prior to the pandemic.

The bottom line is that the COVID-19 pandemic was the catalyst of supply chain problems and transitions that were already underway and were only exasperated. It’s impossible to point to just one reason for this back-up. It’s the confluence of multiple issues that has led us to rethink the true impact of supply chain and the domino effect that will have lasting effects across industries for years to come. Now, experts estimate things won’t be back to status quo until 2023.

This has particular implications for commercial real estate, from building material shortages in the development and tenant improvement phases of projects, to operators rethinking their strategies around offshoring production and leaning into just-in-time inventory strategies. Click to read more at www.dmagazine.com.