OUR TAKE ON THE CONSTRUCTION OUTLOOK

Written by: Collin Fitzgerald

Columbus Business First recently published an article about what’s likely to shape the construction industry’s outlook in 2025. Collin Fitzgerald, Research Manager at Colliers Columbus offers his perspective on the article.

Impact on the Columbus Commercial Real Estate Market

The outlook for Columbus’ commercial real estate market is intricately tied to the evolving construction landscape as highlighted in the article. The industrial sector, particularly large manufacturing facilities and data centers, may continue to experience robust demand but at elevated costs due to potential tariffs and labor shortages. The retail sector, already under pressure from e-commerce trends, could see fewer new developments as developers shift toward renovating existing properties. Multifamily housing may face slower growth due to high financing costs and immigration policies affecting the labor force. The office sector, grappling with post-pandemic hybrid work models, might find challenges in securing financing for speculative projects, exacerbating a cautious development environment.

Our Take

The article underscores the growing uncertainties for developers, contractors and investors as 2025 approaches. While tariffs and labor shortages pose immediate cost challenges, they also highlight opportunities for local manufacturing growth that could benefit industrial real estate in Columbus. Developers may need to adapt strategies, prioritizing value-add acquisitions over new builds to mitigate high construction costs. Preparation through pre-development and efficient sourcing will be crucial. Despite the hurdles, Columbus’ market resilience, supported by its diverse economic base, offers a cautiously optimistic long-term outlook amidst these near-term headwinds.