Directing Multiple Project Teams Toward One Shared Goal

Originally published on October 30, 2024 by Joel Brenner for NAIOP.

It took more than 3,500 workers to build the Empire State Building in the early 1930s. Nearly 100 years later, commercial construction projects still require the work of hundreds to thousands of people to complete. Depending on their size, these projects can take anywhere from six months to 10 years to deliver. Managing that volume of workers across an extended period of time is a considerable undertaking. Success doesn’t just hinge on technical expertise; each and every member of the project team must be engaged, working together toward one common goal that unites them.

Building a Team Family

Whether it’s the CEO or one of their executives from the owner’s side, the program or construction manager, project leadership has to set the tone for teamwork from the beginning. Key to this is building the entire team as an extension of the client’s organization, rather than as outside consultants or service providers. Bringing them into the client’s vision, educating them on the brand, sharing communication and accounting platforms all help to create a more seamless workflow and culture of whole-team integration. When people feel like they’re part of something bigger, they’re not just checking boxes; they’re invested in the outcome – and they know that others are, too. This sense of ownership is critical to long-term project success.

The process requires a level of humility, and not every person or company you interview is going to be able to take that step. Even if they are the most technically qualified for the job, if they can’t rally around the one-organization mentality, they’re not going to do the best work for the project. You need ambassadors, not order-takers.

Read More

NAIOP Research Foundation Discusses Commercial Real Estate Challenges and Trends

Originally published on November 5, 2024 by Shawn Moura, Ph.D. for NAIOP.

NAIOP Research Foundation GovernorsVisionaries and Distinguished Fellows met in Las Vegas in October to discuss development challenges associated with water and power scarcity and possible research topics for future exploration. A panel, moderated by Marianna Hunnicutt, practice builder at Kimley-Horn, discussed how the development community in Las Vegas is working with utilities and municipal leaders to meet sustainability objectives and ensure access to water and power for future projects.

Michael Bernardo, enterprise conservation division manager at Southern Nevada Water Authority (SNWA), provided an overview of how Southern Nevada is planning for future development while facing a limited supply of water from the Colorado River, which supplies 90% of the community’s water. Southern Nevada receives 1.8% of the river’s flow annually as part of an agreement with neighboring states. SNWA augments this supply by treating any water that enters an indoor drain and returning it to the river. Every gallon returned to the river is one that SNWA can pump back out from Lake Meade. Water conservation efforts are focused on limiting uses that do not return water to the sanitary sewer. Evaporative cooling in the form of cooling towers and swamp coolers currently represents the second largest use of water after landscaping, which uses 50-60% of the available water supply.

Steve Neiger, principal/managing broker, CAST, and Rod Martin, senior vice president, Majestic Realty, explained how NAIOP Southern Nevada worked with SNWA to come up with a workable plan to limit evaporative cooling. The water authority explained to the development community that if no limits were placed on evaporative cooling, all new construction would have to come to a halt within several years. NAIOP Southern Nevada made it clear that a complete ban on all evaporative coolers would impose large costs on existing buildings and would force many to close if they could not be retrofitted with new roofs or expanded power capacity to support new HVAC systems. As a compromise, since the end of last year, evaporative cooling systems are now prohibited from being installed on new projects or added to existing buildings, but buildings with existing evaporative cooling systems can keep them.

Read More

Office Market Update: Where Are We Now and Where Are We Going?

Originally published on October 11, 2024 by Ginger Meurer for NAIOP.

The supply imbalance in the office market has been stark the last few years, but panelists at NAIOP’s CRE.Converge conference this week identified bright spots and emphasized the possibilities for creative investors.

Rich Gottlieb, president and COO, Keystone Development & Investment, moderated the panel that featured John Weidner, AIA, NCARB, LEED AP, principal, Global Media Practice Area Leader, Gensler; Adam Showalter, managing director at Stream Realty Partners; and Connor Greissing, founder and managing principal, Brick Row.

Showalter said he hoped to “talk about some green shoots in office and not just a bunch of crabgrass.”

Read More

Tax Relief for Section 1031 Exchanges in the Aftermath of Hurricane Helene

Following the impacts of Hurricane Helene on the Southeastern United States, the Internal Revenue Service (IRS) has provided targeted tax relief for certain affected individuals and businesses in the region. The relief automatically extends various tax deadlines to May 1, 2025, for taxpayers who live or operate a business in impacted areas. 

  • Learn more from Elliott Davis HERE
  • Read the IRS announcement HERE.

IRS announces tax relief for victims of Hurricane Helene in North Carolina; various deadlines postponed to May 1, 2025

Originally published on October 1, 2024, by the IRS.

The Internal Revenue Service announced today tax relief for individuals and businesses in the entire state of North Carolina that were affected by Hurricane Helene that began on Sept. 25, 2024. These taxpayers now have until May 1, 2025, to file various federal individual and business tax returns and make tax payments.

Following the disaster declaration issued by the Federal Emergency Management Agency (FEMA), individuals and households that reside or have a business in the entire state qualify for tax relief.

Affected taxpayers with returns and payments with due dates postponed until Feb. 3, 2025, due to Tropical Storm Debby in North Carolina (NC-2024-07) will also now have until May 1, 2025, to file and/or pay.

Read More

Developing Leaders Serving Our Community

Special thanks to the Developing Leaders who participated in a community service project earlier this month. Partnering with The Y to support Loaves & Fishes, volunteers helped distribute food to local communities in need. They packed large quantities of donated food into individual boxes and handed them out to cars in a drive-through line. It was a fantastic experience!

View Photos

The Impact of the Federal Reserve Rate Cuts on Commercial Real Estate Markets

Originally published on September 26, 2024, by Morris Davis, Ph.D. for NAIOP.

Citing progress on inflation and the balance of risks, last week the Federal Reserve announced rate cuts of 0.5%, to 4.75% to 5%. Can we expect additional cuts from the Federal Reserve and when, and how would these cuts impact commercial real estate markets?

How deep are the cuts? 

According to data from the Fed, on Sept. 20, Treasuries were trading as follows: 

  • 1-month Treasury           4.87%
  • 3-month Treasury           4.75%
  • 6-month Treasury           4.43%
  • 1-year Treasury                3.92%

After some math, we can use these yields to compute market participants’ beliefs on future Fed actions as follows:  25bp rate cut on Nov. 7, 50bp rate cut on Dec 18. and 75bp rate cut on March 19. In sum, markets are expecting the Fed to cut rates by 1.5% over the next 6 months, and if that occurs, the Fed funds rate will fall from 4.75% to 3.25%.

Read More

Competitive Advantage through Property Tax Mitigation

Originally published on October 24, 2024 by Ginger Meurer for NAIOP.

As developers reduce every possible expense in a tight market, what are overlooked ways to improve their competitive position? Tax attorney Ben Blair, a partner at Faegre Drinker Biddle & Reath LLP, said that while you may not be able to move the building to a better location or put an intensive capital investment into improvements, you can work to lower your tax bill.

During a CRE.Converge conference presentation on property tax mitigation, Blair shared tips for making your case for property tax mitigation.

Any assessment that is based on pre-pandemic data is ripe for challenge. Assessment data is inherently backward-looking while values for income-producing properties are (and should be) forward-looking. Many municipalities are assigning higher values for properties today than pre-pandemic, which Blair said is not reflective of the economic reality.

Read More

Plan to Widen the South Section of I-77 Encounters Some Drama

What’s happening here? Make sure you read to the end:

In an earlier edition of Two For Tuesday, we reported that the Charlotte Regional Transportation Planning Organization (CRTPO) Board had requested that the North Carolina Department of Transportation (NCDOT) prepare a comparative analysis to compare a traditional toll alongside and a Public Private Partnership (P3) delivery for additional lanes for the eleven-mile segment of I-77 running through the City of Charlotte and south to the border of South Carolina. Those results were presented by representatives of NCDOT at the August 21, 2024, Board Meeting (Agenda, Minutes - item 14, pages 5-8).   

During a recent Charlotte City Council business meeting, an update was provided by NCDOT containing highlights of its NCDOT: I-77 South Express Lanes Supplemental Report and the next steps were discussed.

Some of the details of the project along with recommendations include:

Read More

NCDOT Presents Options to Charlotte City Council on Widening I-77


Earlier this year, the Charlotte Regional Transportation Planning Organization (CRTPO) Board requested the North Carolina Department of Transportation (NCDOT) prepare a comparative analysis between a traditional toll and a Public Private Partnership (P3) delivery for additional lanes for the eleven-mile segment of I-77 running through the City of Charlotte and to the border of South Carolina. Results were presented by representatives of NCDOT at the August 21, 2024, Board Meeting (Agenda, Minutes - item 14, pages 5-8).   

During last night’s Charlotte City Council business meeting, an update was provided by NCDOT containing highlights of its NCDOT: I-77 South Express Lanes Supplemental Report and the next steps were discussed.

Some of the details of the project along with recommendations include:

  • New managed lanes/express lanes to be constructed next to existing lanes
  • 11 miles of I-77 widening
  • The project scope is I-277 to the South Carolina State Line
  • Total Project Cost: $3.2 - 3.7 billion
  • NCDOT suggests a P3 engagement is currently the only financially feasible delivery method for the construction of the project.
  • Also, crash rates for this segment of I-77 are two and a half times higher than the statewide average for urban interstates.
Last night’s meeting was informational. The City Council will likely deliberate at next week’s meeting and determine if it can make a formal recommendation to the CRTPO on moving forward with a P3 engagement for the future expansion of I-77 South. 

Bonds on the Ballot

This fall, several communities within the region have referred bond measures to the voters for their consideration. Today we are highlighting two of those efforts.

***

The City of Charlotte is asking residents to approve three measures related to housing, neighborhoods, and transportation.

Housing - The housing bond will invest $100 million into new affordable housing for low and moderate-income residents. The breakdown looks like this:

Read More

Charlotte Storm Water Services Making Changes to Design Manual

Charlotte Storm Water Services has updated the draft Stormwater Control Measure (SCM) Design Manual based on feedback provided over the past year. This draft update is available and may be found at:

Stormwater Control Measure (SCM) Design Manual​ - City of Charlotte

This draft contains feedback from the previous year’s use along with an increased allowance of compliance options for individual residential lot projects.

As has been the case over the previous year, designers may ‘opt-in’ to use the draft SCM manual before its official adoption.

For additional questions please contact Andrew Poindexter, Senior Project Manager at Charlotte-Mecklenburg Storm Water Services at [email protected].

IRS announces tax relief for victims of Hurricane Helene in North Carolina; various deadlines postponed to May 1, 2025

Originally published on October 1, 2024, by the IRS.

The Internal Revenue Service announced today tax relief for individuals and businesses in the entire state of North Carolina that were affected by Hurricane Helene which began on Sept. 25, 2024. These taxpayers now have until May 1, 2025, to file various federal individual and business tax returns and make tax payments.

Following the disaster declaration issued by the Federal Emergency Management Agency (FEMA), individuals and households that reside or have a business in the entire state qualify for tax relief.

Affected taxpayers with returns and payments with due dates postponed until Feb. 3, 2025, due to Tropical Storm Debby in North Carolina (NC-2024-07) will also now have until May 1, 2025, to file and/or pay.

Read More

REBIC Public Policy Event - CLT Water November 12th

Meet Angela Charles, Director of Charlotte Water

As the director, Angela is responsible for the county-wide water treatment and distribution, wastewater treatment and collection, utility planning, and most recently the city's stormwater system along with management activities. She leads a staff of approximately $2.46 billion. Charlotte Water maintains more than 11,000 miles of water, sewer, and stormwater pipelines, with nearly 300,000 active water connections county-wide. 

She will be updating attendees on Charlotte Water's current operations as well as sewer capacity and other relevant matters.

RSVP Now

State Legislative Elections Affect Policy Outcomes

Originally published on October 16, 2024 by Toby Burke for NAIOP.

U.S. citizens will go to the polls on Nov. 5 to cast their votes in the 2024 election at each level of government. The outcome of this election may have an impact on the policies affecting commercial real estate, the economy, communities and families. At the state level, 44 states will hold elections for representatives within their state legislature. The significance of the outcomes of these state elections cannot be overlooked in setting policy for the commercial real estate industry.

There are 5,808 state legislative seats up for election in November, according to the National Conference of State Legislatures (NCSL). This equates to 78% of all legislative seats. Therefore, these elections should not be overlooked in setting state policies that Impact the commercial real estate industry.

According to the NCSL, Republicans currently hold 4,023 out 7,386 legislative seats and control 58 of 98 legislative chambers. Republicans control both legislative chambers in 29 states compared to 19 states by the Democrats with a divided legislature. There are also states where one political party holds both legislative chambers and governorship, also known as the trifecta of government. The pre-election trifecta is 23 Republicans and 16 Democrats with 10 divided state governments.

Read More

Powering the Real Estate Investment Process with GPT

Originally published on October 11, 2024, by Ginger Meurer for NAIOP.

Generative AI is not just a tool of the future. Practical applications are already at work today in investment, acquisition, financing, asset management, debt management and more. At this week’s NAIOP CRE.Converge conference, Laura Krashakova, CEO at Smart Capital, shared insights into ways companies can use generative AI to cut costs and automate their way to peak efficiency.

While most hadn’t tried the technology a year ago, especially not in a workplace setting or to automate workflow,  she said that today adoption of generative AI is growing faster than adoption of many other significant technologies like the adoption of internet or mobile technologies.

“Already 40% of people in the U.S. use generative AI,” Krashakova said. “Of this 40%, 10% already use it every day. And this is just U.S. statistics. That’s a huge number.”

Read More

NAIOP's Crowned Developer of the Year at CRE.Converge

 

NAIOP, the Commercial Real Estate Development Association, has selected Crescent Communities as its 2024 Developer of the Year – the association’s highest honor. The award was presented during NAIOP’s CRE.Converge conference in Las Vegas this month.  

“It is NAIOP’s honor to recognize the tremendous work of Crescent Communities as the 2024 Developer of the Year. Their ongoing commitment to advancing the commercial real estate industry through cutting-edge innovation and exemplary real estate development across many property sectors is impressive,” said Marc Selvitelli, NAIOP president and CEO. “Crescent Communities has demonstrated significant market resilience and adaptability, overcoming economic headwinds to deliver value consistently.”

Since 1979, the NAIOP Developer of the Year award has been presented to a development company that best exemplifies leadership and innovation in the commercial real estate industry. Crescent Communities was selected from an impressive slate of nominees and was evaluated by a team of seasoned developers on the following criteria: outstanding quality of projects and services; active support of the industry through NAIOP; financial consistency and stability; ability to adapt to market conditions; and support of the local community.

Read More

Navigating Trends in Industrial Real Estate Development

Originally published on October 10, 2024, by Ginger Meurer for NAIOP.

The ideal industrial real estate site criteria have evolved with the economy.

“It’s power, power, power instead of location, location, location,” said Damon Austin, managing director, global head of customer-led development, Prologis. “Power from a logistics perspective, it really is more critical than ever.”

Experts who joined Austin on a panel discussing industrial real estate development trends at NAIOP’s CRE.Converge conference this week agreed. Denice Tokunaga, partner, Seyfarth Shaw LLP, moderated the conversation joined by Adam Mullen, CEO, KBC Advisors; Greg Pearson, managing director, Fortress Investment Group; and Reon Roski, CEO, Majestic Realty Co.

Read More

Innovating Urban Spaces: The Future of Mixed-use Real Estate Development

Originally published on October 10, 2024 by Chanelle Hayes for NAIOP.

When it comes to mixed-use real estate development, it isn’t just a trend but a transformative force that’s reshaping our cities in today’s rapidly evolving urban landscape.

At CRE.Converge 2024 this week in Las Vegas, a panel of distinguished speakers gathered to discuss the latest trends, challenges and opportunities in mixed-use developments. The panel, moderated by Steve Smith, principal of Cooper Carry, Inc., featured Jay Curran, president of multifamily for Crescent Communities, LLC; Matt Friedman, managing director for Rockwood Capital, LLC; and Tom van Betten, vice president for Matter Real Estate Group.

Retail is a huge component of mixed-use developments, but it can be tricky, Curran said. “We aren’t retail experts, so we partner with retail experts.” Curran explained that Crescent Communities has done a fair number of mixed-use projects where the ground floor is either co-developed or owned by someone with extensive experience.

Read More

Automation, Solar and Tools Driving Cold Storage Design

Originally published on October 8, 2024 by Kathryn Hamilton, CAE for NAIOP.

Cold storage warehouses differ from traditional buildings in more ways than just temperature, and new technologies and trends are reshaping the sector as it grows.

Vince Free, president and CEO, FREEZ Construction, moderated a panel this week at NAIOP’s I.CON Cold Storage that featured experts Jeremy Bentley, NCARB, director of architecture, United Insulated Structures; Michael Jones, AIA, president, Primus Design; and Gary O’Donnell, vice president of construction, Karis Cold.

Their conversation ran the gamut, from design and construction to automation trends to best practices in refrigeration, electrical, structural, fire protection and thermal systems and beyond.

Read More