In an inflationary environment, what are the keys to addressing the labor and real estate cost challenges?
At the moment, the interruption of the supply chain, be it in the procurement of raw materials or direct delivery to consumers, is an important issue. SIOR brokers are involved in problem solving to address these bottlenecks – including a trend to relocate part or all of production.
However, it is currently difficult to secure industrial land in Chicago. According to Newmark Research, the industrial level fell to a new record low of 5.7% in the third quarter. The actual rents are rising rapidly and have exceeded the asking rents in several sub-markets. This dynamic is likely to continue for the foreseeable future.
As a result, a customer may find their options quickly dwindling. Companies should forecast growth as best they can and get involved in space now. For example, SIOR brokers have already supported customers in renting space in new buildings before construction began. If a tenant waits too long, no more space is available or the price has risen by 10% or even 20%.
We also advise companies on finding locations to meet their labor needs. Although Illinois has more workers available than many other states, labor shortages are still a real problem in most industrial sectors and types of employment. Real estate can be part of a larger solution to solving problems in the workplace. All workers value a shorter commute, a clean, safe and modern work environment and access to amenities that make the working day easier.
Experienced SIOR Designated Brokers excel at understanding market dynamics and building the relationships necessary to uncover opportunities and complete transactions. They meet strict membership requirements, adhere to a code of ethics and values, and provide the highest value to their customers. The SIOR network fosters relationships among leading brokers and builds trust over time – something that pays off when agreements have to be made quickly and carefully.