Des Moines Speculative Builds Pause Amid Credit Tightening
Challenges in Industrial Speculative Development Industrial speculative development faces significant turbulence. Rising tariffs on steel and equipment have escalated construction costs by approximately 5%. This places projects in uncertain territory as budgets are squeezed. Margins diminish, making it challenging for developers. Developers face construction delays. Supply chain disruptions extend delivery schedules for essential materials like steel. Many speculative projects are paused. They require pre-leasing commitments to proceed. Furthermore, the Port of Los Angeles reports a 35% drop in arriving cargo vessels by May 2025, exacerbating supply chain issues. The industrial pipeline has contracted markedly. The construction footprint has shrunk from over 400 million to about 300 million square feet. Speculative developments now depend on significant sponsor equity. Pre-leasing risk mitigation is crucial to proceed. Project timelines extend amid supply chain obstacles. Elevated int...