Banks and corporations have lots of cash on hand—record amounts—and there is pent-up demand in the economy. The federal government is finally funding long-needed infrastructure projects. The real estate sector sees conditions lined up for a strong 2022 with big projects and plenty of home construction alike. Chances are strong that it will be a record year, especially if the pandemic can get its foot on the brakes.
“The U.S. economy will continue growing but at a lesser pace than 2021, bringing costs back into a reasonable inflation-measured level. The infusion of $8.5 trillion into our economy in 2020 and 2021 is not yet absorbed by GDP growth, so there is still much fuel to support spending and investing. Given inflationary trends, interest rates will rise, reducing valuations and amounts borrowed proportionately; home appraisals will flatten or reduce and relieve pressure on many building materials and related services. Corporations are more trim and are generating more bottom line with the help of increased pricing for goods and services. Corporate America is loaded with cash and will invest to increase capacity to meet demand; this will help level or bring down costs and add to the GDP. The banking industry is flush with more cash than it has ever experienced and is looking for loans. Many industry sectors, i.e., travel, have yet to recover fully and have much room to rebound. Corporex is commercial real estate-centered and heavily invested in hotels and will benefit from the improving economy. While accustomed to video conferencing, people have money to spend and are anxious to get out and travel. The hotel sector recovery may take at least two years to stabilize again. Corporex in 2021 embarked on the biggest development project of its 56-year history, the largest of its nature to be undertaken in the Greater Cincinnati region, and maybe in Kentucky. Work is well underway on The Ovation mixed-use development at the confluence of the Ohio and Licking rivers, which will ultimately cost in excess of $1 billion in capital spending. We are bullish about the future for our OneNKY Community. We expect staff to grow another 20% in 2022.”
–William “Bill” Butler Chairman Corporex Inc.
“There are reasons to be optimistic about Kentucky’s economy in 2022. Ford’s Blue Oval SK Battery Park, its Tier 1 and Tier 2 suppliers, federal infrastructure funding, and American Rescue Plan Act funds will all support job creation. Specific to the Coldstream Research Campus, the 40,000-s.f. CoRE building (office/laboratory space) will open in the second quarter. Later in the year the new 260-unit FIFTEEN51 Apartments will create a live-work-play-innovate environment, attracting young professionals and high-tech talent. The mid-year completion of the land swap with the City of Lexington will create a new 200-acre industrial park adjacent to Coldstream.”
–George Ward Executive Director, UK Coldstream Research Campus
“With pent-up demand, we expect considerable growth in the U.S. and Kentucky economies in 2022. Hopefully Louisville can pick up where it left off in 2019, when tourism, conventions and “bourbonism” were significant drivers for restaurants, museums, sporting events and authentic Kentucky activities. The federal infrastructure bill will drive the economy while improving our transportation needs in Louisville and the commonwealth—like the Ohio River Bridges Project’s immense improvements brought business growth, good-paying jobs and a better-functioning traffic system. With our development company, Hollenbach Oakley, and brokerage company, Horizon Commercial Realty, we’ve seen projects in all sectors in different stages of development. The pandemic created a tremendous uptick in what was already an evolving buy-cycle in retail e-commerce for consumers. With UPS Worldport, Louisville will continue to benefit. Our company’s capital spending and staffing will grow in 2022. We have grown year over year and recently occupied a new building with flexible innovative workspaces and technology, creating a collaborative culture. Investing in our human capital development and attracting new talent remain as top priorities.”
–John Hollenbach Managing Partner, Hollenbach-Oakley
“We achieved all-time high residential home sales during the pandemic. More than 55,000 homes were sold in Kentucky ($12 billion in sales and a 10% increase over the previous record in 2019), driven by historically low mortgage rates and a robust economy. Housing markets made another surge this year and although sales volume has shown signs of slowing down in Q4, Kentucky is on track to meet or exceed its previous record. Consumers feel good about personal finances, but there is concern inflation will continue to drive up home prices, and this hurts first-time buyers. Low mortgage rates help keep real estate attractive but are expected to increase steadily and stay under 4% next year. Commercial markets should remain soft, as people continue to work from home. If the state and national economies return to a more “normal” state without an infusion of federal money, we see increased housing construction, continued low mortgage rates and another strong year in real estate.”
–Steve Stevens Chief Executive Officer, Kentucky REALTORS