By March 11, 2019
As you travel around the Front Range you will notice the following under construction:·
New Medical Facilities However, you will not notice new office buildings under construction. What gives? I thought we had a booming economy. Why no new office buildings? There are a couple of reasons:
First, construction costs have sky rocketed. In ten years, construction costs have gone from about $200 per square foot to over $300 per square foot.
Rental rates have not increased at the same pace as construction costs so speculative investors can’t make their numbers work. It’s too expensive to build compared to the rents that can be charged. One reason why rental rates haven’t increased at high rate is property taxes.
Property taxes on Class A office buildings have basically doubled in the last 10 years in many cases.
So, until rental rates catch up with construction costs, we won’t see many new office buildings under construction.
By February 12, 2019
Higher prices, lower quality and delayed developments are looming not just in northern Colorado, but across the U.S., as the construction industry faces a shortage of skilled laborers in the field, experts say.
Brandon Myers is the chairman of the Northern Colorado Home Builders Association. As chairman, he helps member home builders find quality labor during the industrywide squeeze.
He said most workers entering the labor force are set up to learn on the job. With a model like that, many workers are entering the field as helping hands rather than skilled workers. That not only slows productivity, but threatens the quality of projects.
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