Welcome to our fourth edition of the Construction Lender Risk Management Journal. For nearly a decade, the Roundtable has provided a forum for construction investors, lenders, and other stakeholders to share ideas and solutions to help mitigate the unique risks associated with construction projects. There is no one-size-fits-all approach to managing construction risks; however, the opportunity to share ideas here can help to create consistency, which benefits us all.
Economists are projecting a continued recovery in construction during 2022. Residential and multifamily construction have fully recovered. Based on total costs, non-residential commercial also seems to be doing well; however, volume has not kept pace with cost increases. After adjusting for cost increases, non-residential construction is still lagging behind the 2019 pace but is expected to recover fully this year, subject to continued material and labor availability.
This year’s journal includes insights from our CLRM community covering the market forecast, key construction trends, tips for addressing supply chain issues, adjusting for unknowns in loan structures, monitoring LIHTC, non-performing construction and development loan workouts, setting up for smooth funds control, the impacts of slow payments, ESG, pre-construction environmental due diligence, construction technology, among other great pieces.