Construction Pipeline 2022 ✈️
COVID, supply chain issues, the war in Ukraine, rising inflation, and economic fears, among other challenges had a profound impact on the hospitality, senior living, and multifamily industries. A key indicator to the health of our business is the demand for new construction. Let’s take a peek at the construction pipeline and see what the future holds in store.
U.S. Hotel Construction Pipeline Climbs 9%🍍
There are 965 hotels with 130,914 rooms currently under construction, down 17 percent year over year by projects and 18 percent year over year by rooms.
Projects scheduled to start in the next 12 months, at 2,009 hotels with 232,163 rooms, are up 9 percent year over year by projects and 9 percent year over year by rooms. Projects and rooms in early planning reached a record high in the second quarter, standing at 2,246 hotels with 258,191 rooms, up 26 percent year over year by projects and 15 percent year over year by rooms. Continuing the trend seen over the past several years, the upscale and upper-midscale chain scales continue to lead the pipeline with 68 percent of projects concentrated in these two chain scales.
This Year’s Multifamily Pipeline to Set Record👩👦👨👩👦👨👧
Marcus & Millichap is expecting the US to add roughly 400,000 new rentals in 2022, a record for the last few decades. Rental demand is anticipated to increase this year with rising interest rates and elevated single family home prices.
“The new supply will play a key role in appeasing the housing shortage,” Marcus & Millichap predicts.
The Sun Belt is poised to account for one-fourth of the new units with Dallas-Fort Worth, Phoenix, Austin, Houston, Nashville and Atlanta leading the way with each expected to add more than 10,000 units in 2022.
Migration to those metro areas is expected to combine to 250,000 new households this year.
Senior Living Construction Demand Rises in 2022👴🏻👵🏻
Demand among developers and operators for new senior living projects is higher in 2022 than in the prior year, even while construction costs and interest rates remain elevated.
Driving that increase in demand are favorable demographics, an expectation that construction prices will level off in 2023 and a shift in mindset from surviving the Covid-19 pandemic to planning for the future, according to construction firm Weitz Company’s latest Senior Living Construction Costs report.
The construction industry is moving at a brisk pace in 2022 and there is more than enough demand to subsist on for the foreseeable future.