2021 has been one of the most volatile years in history. While it seems that the pandemic is now in our rear-view mirror, we will continue feeling the effects for years to come. Whether it be Bitcoin, houses, or plywood, we are seeing unprecedented price swings over such a short period of time. And not to mention the rollout of the various Covid-19 vaccines, we in Southern California have seen the “reopening” of our home with massive consumer demand. Movie Theaters, gyms, indoor dining, it is all back and the summer tourism is in full swing. This in turn has created an environment, we in the construction industry like to call, “hurry up and wait.”
This means that as people are leaving their homes for the first time in a year, companies are having their employees come back into the office. But their existing office, as it was, is no longer suited for their ‘Post-Covid’ needs. So as companies come to negotiations with their office building’s leasing agents, all of a sudden there is a huge demand for pricing new Tenant Improvements. The leasing agent then needs to scramble and get a pricing plan put together, send it out to General Contractors, and give them a quick deadline to reach in order to continue moving the lease negotiations forward… but then everything stops. The negotiations hit a snag, or the company would now like to look at a different space, or they decide to leave their existing office as is. So we, the General Contractors, keep waiting.
And then, once the new lease is signed we are told to commence construction immediately. That means ordering materials and mobilizing crews to prepare to be on site as soon as possible. The only problem is that last year, as Covid surged across the globe, the manufacturer’s of steel, wood, rubber, basically any and all construction materials, stopped producing because their was no demand. So now that their is such a high demand to start building again, the mills cannot keep up. As a result we saw prices of wood skyrocket, the lead times for steel and metal products reach upwards of 9 months, and basically all construction materials cause serious delays across the industry.
What that leaves us with is an unstable construction industry that is constantly being told to hurry up, then only to be hamstrung by the side effects of the pandemic. But there is so much to be excited about at DBAC. Prices are beginning to settle down, the commercial office market is stabilizing, and material lead times are shrinking. Not to mention, our job list is growing, our clients are happy and we are looking forward to another banner year for our company, as we ring in 30 years of business this fall!