Will the Labor Shortage Impact Commercial Real Estate?

• Job openings surged to a record high 10.1M in June – Boosted by economic reopening

• Meanwhile, the labor force had 8.7M unemployed persons in July

• This hiring disconnect is weighing on economic growth and CRE property performance

• Builders are struggling to find workers, which could slow real estate development

• Additionally, shortage of labor stokes wage growth – A very sticky form of inflation

• If inflation gets out of control, the Fed may be forced to raise rates early

• Looking forward, more workers may return to the workforce in the coming months as enhanced unemployment benefits expire and children return to school

• Investors should closely monitor the labor market in the near-term as it has a broad-based impacts across all types of commercial real estate and the economy as a whole