2nd Quarter 2021
by Joe A. Hollingsworth, Jr.
As far as industrial real estate goes, what is the biggest challenge today?
• One challenge is certainly not the economy with the GDP (in spite of COVID) continuing to provide reasonable growth. The economy seems unlikely to fail.
• Another challenge is industrial building codes or related problems such as construction shortages? While construction costs and inspections always seem ridiculously high and we continue to experience a high level of frustration over shortages and delays, it does not seem that construction will be a big impediment. Also, another challenge for development are lenders…But, they are everywhere, so let’s not consider that to be a problem.
• The biggest challenge is an “administration induced labor shortage”. This is consequential because of several factors. The workforce is being coddled to the point where their attitudes about working (as being a requirement for life) is resulting in the workforce being less committed to actually working. It seems like the ones that want to work and fulfill a psychological need by working are very committed. However, the very sizable market of workers on the margins have had their work ethic greatly diluted to the point of the comment, “It just doesn’t make sense.” However, this is not the whole story. The globalist theory that there “are no borders” is being experimented, again, with an onslaught of illegal immigrants. While there is still a way to legally become a citizen, the vast majority are simply skipping that step, because there is no penalty for doing so. This is forcing America to “dumb down” the manufacturing or distribution floor, introducing several new languages, accommodating several new religions (or other forms of worship), and tolerating the additional company burdens of communication and culture.
Included in the recent stimulus bill that was just passed is to extend additional funds for unemployment to September 2021. This is paying those in the workforce to stay at home instead of them even applying for a job. Why would they look for a job when the majority of them are making as much money (and in some cases more money) by staying at home instead of working, putting them totally out of the labor market? Small businesses are experiencing a huge drop in job applicants, and they are having to contend with existing rebellious workers and their demands instead of firing them. This is because employers do not have a labor market to replace those rebellious and insubordinate workers.
The above-mentioned trends are solidly in place. At least through September 2021, this could be the most difficult time for companies wanting to “fulfill their growth patterns”. Good, easy-to-train, and qualified workers are being paid to stay at home and exchanged for a set of challenges to accommodate illegal or unqualified workers. The “I am getting paid to sit at home” mentality is a huge nanny state problem instead of each individual being a contributing member to society and enjoying their individual success.
However, more importantly, it is contributing to a totally “unemployed qualified workforce”. Most industries have to adjust to the new reality and pay the cost associated with it, but some cannot “afford the freight”. I think this will show up in our larger cities and metro areas before it shows up in semi-rural areas. It is clearly a concerning pattern that affects our industrial partners’ abilities to grow the economy for all.
Prince George industrial park plans huge spec warehouse expansion
February 18, 2021
The Richmond market’s industrial real estate sector continues its strong start in 2021, with a complex in the region’s southern half set to expand by nearly 50 percent.
Tennessee-based The Hollingsworth Cos. is preparing to begin work on a 650,000-square-foot industrial building in the Southpoint Business Park in Prince George.
Located at 6162 Quality Drive, the park currently houses about 950,000 square feet of industrial space across 11 buildings on its 152 acres. Hollingsworth began developing the park 15 years ago, adding to a portfolio of 18 million square feet of industrial space, located mostly in the Southeast.
Tom Mann, a VP at Hollingsworth, said the new building will be built on spec, an approach he said has been fruitful for the company recently.
“A lot of our customers will see rapid growth, and we get a call right away because we have a building that’s almost ready,” Mann said. “When COVID hit we thought it’d grind to a halt. It ended up being the opposite. Retail declined but industrial picked that back up because people were ordering from home. 2020 was great for us because we had spec buildings out there.”
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