Making Multistory Industrial Work

Posted on October 10, 2019

By Kathryn Hamilton

E-commerce is driving growth in neighborhoods where malls used to stand tall, and multistory is the name of the game in industrial development today. In Brooklyn, an 18-acre site in the Red Hook district will be the future home to a four-story, 1.3-million-square-foot distribution center – the largest multistory warehouse in the U.S. It’s groundbreaking in its scope and design, but not without its own issues. So what are the challenges with multistory and how can developers make it work? A panel at NAIOP’s I.CON East 2019 sought to answer the tough questions.

Leslie Lanne, managing director with JLL, said the primary driver behind multistory is getting as close as possible to the consumer base. This proximity is more than just mileage – it’s the time it takes to get the goods to the consumer. For example, a warehouse in New Jersey is located only five miles from Brooklyn, but it can be tough to achieve a trip from the warehouse to consumers and back in less than two hours.

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Welcome New NAIOP Charlotte Members

Posted on October 8, 2019

We are proud to introduce our new association members! The following is a list of individuals who have joined NAIOP Charlotte since April 22, 2019:

  • Blake Bickmore, Crescent Communities LLC
  • Nathaniel Buhler, Cambridge Properties, Inc.
  • John Core, Beacon Partners
  • Dave Dabson, Beacon Partners
  • Thomas Efthimiades, Childress Klein
  • Chad Frye, Graycor Construction
  • Madelyn Furr, ECS Southeast, LLP
  • Andrew Geuss, Builtech Services, LLC
  • Paxton Hollar, SunCap Property Group
  • Greg Icenhour, Mid-Atlantic Associates, Inc.
  • Robert Jeffway, The Fallon Company
  • William Joslin, McMillan Pazdan Smith Architecture
  • Corey Knuckles, LaBella Associates P.C.
  • Dan Mainous, BB&T
  • Derek Mathis, SunCap Property Group
  • Christopher McCain, Entinu Communications LLC
  • Chris Morgan, Walbridge
  • Rob Nanfelt, REBIC
  • Grant Oldenburg, UNC Charlotte Real Estate Club
  • Ross Pope, KDC Real Estate Development & Investments
  • Kenny Sommerkamp, Metrolina Builders
  • Seth Spears, Batson-Cook Construction
  • Madison Stewart, Builtech Services, LLC
  • Evan Synstad, Gilbane Building Company
  • Heidi Team, Batson-Cook Construction
  • David Truesdale, Choate Construction Company
  • Mike Tulini, Encompass Building Group
  • Tony Wilk, Builtech Services, LLC
  • Matt Williams, Metrolina Builders
  • Edward Wolynec, Clarion Partners
  • Kate Zawacki, Grandbridge Real Estate Capital, LLC

New Report: The Evolution of Suburban Office Parks

Posted on October 7, 2019

The NAIOP Research Foundation has published a new report titled "Profiles in the Evolution of Suburban Office Parks," by Dustin C. Read, Ph.D./J.D.

The author interviewed five developers who have recently updated suburban office parks in the United States and Canada to learn how they made these properties relevant for today's market.

Key Takeaways:

  • Redeveloped office parks must fit the preferences of the local workforce and the needs of local employers.
  • Developers should seek to understand local officials' priorities.
  • Developers should build flexibility into their plans and partner with creditors who understand that they may need to adapt to unforeseen circumstances.
  • Developers can maximize the value of their improvements by leveraging design, technology and amenities to develop a property's identity and build community.
  • Rebranding is often a critical component of a successful redevelopment strategy.
 Read the Report.

TONIGHT: CLT Development Center Brainstorming Session – The Customer Experience

Posted on October 4, 2019

Friday, October 4th

1:00 - 2:30 p.m.

CMGC 8th Floor - Planning Innovation Center

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Solving the Construction Worker Shortage Puzzle

Posted on October 1, 2019

By Shawn Moura

In recent years, builders have faced a shortage of workers that has only grown more acute amid increasing demand for construction and record-low unemployment. Many of the 2.2 million construction workers who lost their jobs during the last recession either retired or found employment in other industries. At the same time, fewer new workers are taking their place because millennials are less attracted to careers in construction than past generations. Workers under the age of 25 make up only 9.0% of the construction workforce in the United States versus 12.3% of the nation’s overall workforce, according to data from the Bureau of Labor Statistics.

A report published by the NAIOP Research Foundation in July , “Addressing the Workforce Skills Gap in Construction and CRE-related Trades,” examines how employers are partnering with local communities in innovative training and recruitment programs to boost the supply of skilled construction workers in both urban and rural areas.

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Profiles in the Evolution of Suburban Office Parks

Posted on September 22, 2019

By Dustin Read

The NAIOP Research Foundation has published a new report titled "Profiles in the Evolution of Suburban Office Parks," by Dustin C. Read, Ph.D./J.D.

The author interviewed five developers who have recently updated suburban office parks in the United States and Canada to learn how they made these properties relevant for today's market.

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REBIC BBQ & Candidate Meet & Greet Recap

REBIC held their annual BBQ & Candidate Meet & Greet on August 28. More than 22 candidates and 130 people were in attendance. NAIOP Charlotte sponsored this event.

REBIC Primary Election Voter Guide is Now Available

Service Resiliency is Make-or-break for Today's Tenants

Posted on August 22, 2019

By Linda Strowbridge

Strategically parked over a manhole on a downtown Manhattan street, John Meko spent months working inside a 20-foot storage trailer and learning about resiliency the hard way.

Meko was wrestling with the immediate aftermath of Hurricane Sandy in 2012. His employer at the time was an internet service provider (ISP) that supported about 200 office buildings in New York City, primarily in the Financial District. The massive storm and flooding had destroyed electrical and internet infrastructure throughout large sections of the city, and businesses were desperate to regain service so they could resume their operations.

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Parking Perplexities Facing Developers

Posted on August 21, 2019

By Mark L. Elliott, David C. Kirk and Jenna E. Lee

Shared parking paired with technology offers solutions for changes in building usage.

Providing parking for commercial properties has always been a challenge for developers, but it’s even more so today. Why?

First, no one really knows where parking needs and requirements are heading, especially for commercial office space. On one hand, there is the densification of work space, which has seen the square footage per employee decrease. According to research from Cushman & Wakefield, the national average in 2018 was 194 square feet per employee, which is down 8.3 percent from 2009. That suggests more parking is needed for office users and their buildings, which now have more people working in the same amount of space.

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Industrial Demand Forecast Decreases as Economy Slows

Posted on August 19, 2019

By Dr. Hany Guirguis and Dr. Joshua Harris

The NAIOP Research Foundation has published the NAIOP Industrial Space Demand Forecast for Q3 2019.

Key Takeaways

  • The forecast for net industrial space demand has decreased amid slower growth in the U.S. economy. Absorption is now expected to average 37 million square feet per quarter for the next two years. This is a significant slowdown from the average 60 million square feet of quarterly net absorption experienced during 2017 and 2018.  
  • The average quarterly completions fell to 42 million square feet in the first half of 2019, down from an average of 54 million square feet per quarter during 2017 and 2018. Supply and demand are likely to stay in balance for the industrial sector; therefore, rents and vacancy rates should remain stable in many markets nationwide. 
  • A recession is not likely in the near term, but a general slowdown appears already underway; the first report of GDP growth in the second quarter fell to 2.1% from the 3.1% annualized result of the first quarter.
View the Forecast

Opportunity Zones Investment Strategies Take Hold

Posted on August 14, 2019

By Rich Tucker

In an era of divided government and even more divided politics, there are still public policies that can unite the left and right. One is opportunity zones.

Opportunity zones (OZs) – defined by the IRS as economically-distressed communities where new investments, under certain conditions, may be eligible for preferential tax treatment – were added to the tax code by the Tax Cuts and Jobs Act of 2017.

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Real Estate Industry Legislative Priorities Continue to Advance in Raleigh

Posted on August 13, 2019

Despite the ongoing stalemate over the state budget, legislation supported by the real estate and home building industry continues to make progress in Raleigh. Over the past few weeks, Governor Cooper has signed into law a variety of bills supported by the North Carolina Home Builders Association (NCHBA), the North Carolina Realtors®, NAIOP North Carolina, and other trade groups. Here’s a summary of some of the key laws that will benefit the residential and commercial real estate industries in the years ahead:

  • HB 675 — 2019 Building Code Regulatory Reform, sponsored by Representatives Mark Brody (R-Union), Dennis Riddell (R-Alamance), Jon Hardister (R-Guilford), and Billy Richardson (D-Cumberland). This is the fifth successful bill over the past several sessions of major reforms to the state building code and inspections process Key provisions in this year’s act include:
    • Prohibits local governments from requiring developers/builders to bury existing power lines or bury relocated power lines that are located outside the subdivision.
    • Prohibits local governments from setting minimum square footage requirements for residential structures.
    • Requires the North Carolina Building Code Council to conduct a cost/benefit analysis for all proposed changes to the North Carolina Energy Conservation Code since January 1, 2018.
    • Requires the North Carolina Building Code Council to create an inspection form to be used by engineers and architects and clarifies that they can inspect foundations and underslabs.
    • Adds a new level of inspector, residential changeout inspector, to assist with minor inspections.
    • Requires that a local government chooses to have plan review that the initial review for residential building plans must be performed within fifteen (15) business days after submission.
    • Requires that a local government can issue a temporary certificate of occupancy if the requirements of the NC Building Code are met.
  • HB 492 — Simplify Builder Inventory Exclusion, sponsored by Representatives Mark Brody (R-Union), Julia Howard (R-Davie), and Brian Turner (D-Buncombe), will eliminate the need for a builder to file annually in order to take advantage of an important property tax exclusion.The new law permits a builder to file a one-time application to claim an exemption from higher property taxes on land and houses held for sale by a builder to the extent that the tax increase is attributable to subdivision of the property or improvements made such as the installation of infrastructure or the construction of a single-family or duplex house on the property.
  • HB 620 — Street Database/Manual/Public Record Exemption, requires the North Carolina Department of Transportation to create a “Public Street Information Database”, by 01/10/20 and update it regularly, for the purpose of conveying the status of roads within the State. This publicly-available database will indicate whether the road is (1) federally owned, (2) State-owned with State road number assigned, or (3) State-maintained with a State road number assigned.
  • SB 355 — Land-Use Regulatory Changes, sponsored by Senators Dan Bishop (R-Mecklenburg), Paul Newton (R-Cabarrus) and Sam Searcy (D-Wake), helps level the playing field between landowners and local governments by integrating permit choice and vesting laws to ensure that the rules are not changed in the middle of a development project. In addition, the law:
    • Protects landowners against 3rd party rezoning efforts
    • Allows certain claims to bypass the Board of Adjustment and proceed to Superior Court.
    • Places limits on conditional zoning abuse, while preserving flexibility for developers.
  • SB 523 — Revenue Laws Clarifying & Administrative Changes, requires Property Management companies to charge and remit RMI sales tax only in the following circumstances:
    1. They provide repair, maintenance, installation services for an additional charge above what is stated in the management contract.
    2. They arrange for a third party to provide the repair, maintenance, and installation services and impose an additional charge for arranging these services.
    3. More than twenty-five percent (25%) of the time spent managing an individual real property during a billing or invoice period is attributable to taxable repair, maintenance, and installation services. The property manager can voluntarily provide a written affidavit to attest that no more than 25% of their services on a given property constitute taxable RMI services, which would clear them of liability for taxation on any portion of the contract amount.

Source: NCHBA & NC Realtors®

Eight Things to Know About Industrial Real Estate Demand

Posted on August 12, 2019

By Gillam Campbell

Tariffs are in the air, but dealmaking continues on the ground in the U.S. industrial property market. Despite a slight softening, vacancy continues to hover at all-time historic lows. So, what’s driving the action? The following are eight things to know about demand for industrial property, according to JLL’s latest research Cheat Sheet:

  1. More tenants on the move, more locations needed. A year ago, our research showed 1,200 tenants seeking 439 million square feet of space. Now, roughly 1,600 tenants are in the market, looking for approximately 600 million square feet of space. The growing number of tenants includes not only new-to-market occupiers, but also companies that are looking to expand or replace square footage – whether  that means a last-mile e-commerce delivery center close to consumers or a more modern, flat-floor big-box warehouse that is ready for today’s high-tech distribution.
  2. Less is more when it comes to square footage. As consumers begin to expect next-day or even same-day delivery from their e-tailers, distribution strategies increasingly include smaller delivery centers, some of them in urban infill locations, that help companies cover the last mile to the customer. No wonder the average square footage requirement has shrunk by 10,000 square feet over the past year to reach 360,000 square feet.
Click here to read more.

The Future of 5G in the Commercial Real Estate Industry

Posted on August 9, 2019

By Jeff Gudewicz

According to the Pew Research Center, 95 percent of Americans own a cellphone, with 77 percent owning smartphones. As traditional broadband usage has dropped in recent years, keeping tenants connected through a cellular signal has become more important than ever for those who want to stay competitive in the commercial real estate industry. And with 5G on the horizon and poised to become a disruptive threat to traditional Wi-Fi and wired internet systems, as well as a key force behind the rise of smart cities, connectivity is going to become more integral to daily life than ever before.

What is 5G?

5G, or the fifth generation of wireless technology, is a standard designed to deliver data speeds greater than 1 gigabit per second and low latency of less than 1 millisecond. This means much faster data speeds (100 times the speed of 4G LTE) and less delay between the request for a data transfer and the start of the data transfer in a cellular environment.

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City Hosting Meeting Next Wednesday on Sign, Tree Ordinance Revisions

Posted on August 9, 2019

New Report: Addressing the Workforce Skills Gap in Construction and CRE-related Trades

The NAIOP Research Foundation has published a new report titled "Addressing the Workforce Skills Gap in Construction and CRE-related Trades," by Barry E. Stern, Ph.D.

A shortage of construction and logistics workers has increased the cost of construction for developers and hampered the expansion and profitability of warehouse and distribution centers. The NAIOP Research Foundation commissioned this report to explore some of the contributing factors to the workforce shortage and how the construction and logistics industries can improve worker recruitment, training, productivity and retention.

Key Takeaways:

  • Contractors will increasingly need to adopt new technologies to improve worker productivity.
  • The most successful workforce development programs rely on multisector collaboration.
  • It is important to align workforce development programs with local trends.
  • Demonstrating that a job can be part of a long-term career is important to recruitment and retention in the logistics and construction industries.
  • The construction and logistics industries need to invest in training and recruiting high school students and recent graduates.
  • Investing in ongoing training for current employees ensures that workers have the latest skills and improves worker recruitment and retention.
 Download the Report

2019 REBIC BBQ & Candidate Meet & Greet is on August 28

Posted on August 2, 2019

REBIC’s annual BBQ & Candidate Meet & Greet is fast approaching on August 28, 2019! Make sure to get your tickets early! This annual bi-partisan Political Pig Pickin’ brings state and local candidates together with hundreds of members of the Charlotte real estate, homebuilders and development industries for an afternoon of food and fun!

WHEN: August 28, 11:30-1:30 p.m.

WHERE:  SMS Catering, 1764 Norland Rd., Charlotte, NC 28205 | View Map

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Charlotte Modifies Proposed Sign Ordinance to Allow Real Estate Directional Signs

Posted on July 31, 2019

Revised amendments to the Charlotte Sign Ordinance now permit the use of weekend directional signs for new home construction and real estate open houses, after REBIC raised objections to their elimination.

The proposed regulations for Temporary Off-Premises Signs now read as follows:

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Governor Cooper Signs Law Clarifying Taxation of Property Management Contracts

Posted on July 30, 2019

Governor Roy Cooper last week signed into law a bill supported by REBIC, the North Carolina Association of Realtors® (NCR), NAIOP Charlotte, BOMA Greater Charlotte, and other industry trade groups, clarifying that residential and commercial Property Management agreements are largely not subject to the state’s Repair, Maintenance & Installation (RMI) sales tax.

SB 523 — Revenue Laws Clarifying & Administrative Changes, passed the General Assembly earlier this month with an amendment that requires Property Management companies to charge and remit RMI sales tax only in the following circumstances:

  1. They provide repair, maintenance, installation services for an additional charge above what is stated in the management contract.
  2. They arrange for a third party to provide the repair, maintenance, and installation services and impose an additional charge for arranging these services.
  3. More than twenty-five percent (25%) of the time spent managing an individual real property during a billing or invoice period is attributable to taxable repair, maintenance, and installation services. The property manager can voluntarily provide a written affidavit to attest that no more than 25% of their services on a given property constitute taxable RMI services, which would clear them of liability for taxation on any portion of the contract amount.

The legislation also provides specific exclusions to RMI services, which help ensure much of the work done by property management companies is not subject to taxation. They are:

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