Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/390025
54 S C T / O c t O b e r 2 0 1 4 hopping center developers are carefully eyeing construction costs, which have been creeping upward these past few years and have even spiked dramatically in certain locations. some de- velopers blame the rising cost of materials, while others point to a big jump in labor costs. still others insist that the increases are not at a level that is worrisome. S Building pressure cOnstructiOn cOsts are climbing faster in sOme markets, slOwer in Others By Steve Bergsman "it's a great time to be an owner of shopping centers — if you want to sell," quipped stephen coslik, chairman of the fort Worth, texas–based Woodmont co. "But it is a challenging time to be a developer; construction costs, which were rising at a pace of 15 percent annually for the last two years, are jumping very quickly: in a 90-day period this year, we saw a 40 percent increase in steel prices." and rents may have risen but they have not kept pace with the cost of materials and land, coslik says. "years ago we used to try to build a 12 percent return on costs — now you work to get a 9 percent to 10 percent return." and even that is tough, he asserts. Meanwhile, in the gulf south, cost woes typically involve labor more than