Q&A with Peak Construction’s David Michael on Supply Chain Challenges 

Supply chain challenges continue to confront commercial real estate developers and construction firms nationwide—challenges that may be aggravated or alleviated to some extent by local market conditions. Peak Construction, headquartered in Rosemont IL and active nationally, has experienced these challenges and found ways to work around them. Connect CRE spoke recently with David Michael, Peak Construction’s VP | Sales, for some on-the-ground insights. Here’s what he told us: 

Q: Are you encountering supply chain issues in all regions where you are active?  

A: Yes, in every market we are experiencing supply chain challenges for materials and supplies in almost every trade. The supply chain issues have been difficult to manage with many large material suppliers changing policies and operating practices with limited notice to contractors or subcontractors.  

Q: How much of an impact have these issues had on schedules? Have you devised workaround methods?   

A: These impacts have been anywhere from a couple weeks to multiple months, depending on the project. Our teams have devised many workarounds plans on a case-by-case basis once the root issue of the delay is discovered.  In many instances the only solution is to provide temporary solutions until the required materials or equipment can be shipped. 

Q: What materials are especially affected by the supply chain backlog? 

A: Roof, steel, precast, electrical switch gear, HVAC RTUs, dock equipment, fire sprinkler piping and fire pumps, piping for exterior utilities and plumbing, public utility transformers and meters. Additionally, local to Chicago, add in stone, concrete, asphalt and trucking from the recent mining strikes. These issues have pushed jobs that were supposed to be completed over the past couple months to being finished now, coinciding with other scheduled work, ultimately, exacerbating existing major labor, trucking and material shortages from the increased demand and furthering strains on the supply limitations of the market. 

Q: Is any one property type affected more or affected less than others by these issues?   

A: Industrial, multifamily, assisted living and university housing are the property types being hit the hardest due to the very large influx of projects hitting the market.