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Creating a Private Equity Fund: A Guide for Real Estate Professionals

Posted on April 16, 2019

By Jan A. deRoos, PhD and Shaun Bond, PhD

The NAIOP Research Foundation has published a new white paper titled "Creating a Private Equity Fund: A Guide for Real Estate Professionals," by Jan A. deRoos, Ph.D., HVS Professor of Hotel Finance and Real Estate at SC Johnson College of Business, Cornell University; and Shaun Bond, Ph.D., West Shell Jr. Chair in Real Estate at Lindner College of Business, University of Cincinnati.

Key Takeaways:

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City Council to Vote Next Monday on TOD Ordinance

Posted on April 12, 2019

The Charlotte City Council will vote next Monday night on the new Transit-Oriented Development (TOD) Ordinance, following a unanimous recommendation of approval today by the Council’s Transportation & Planning Committee.

REBIC and our members have been closely engaged in the process of drafting the new TOD ordinance over the past 18 months, and the City planning staff, have incorporated many of our suggestions into the ordinance — from changes in maximum parking ratios to reduced open space requirements. And while we are pleased with many aspects of the TOD, we remain concerned that its limitations on building height could negatively impact economic development in Charlotte’s transit corridors.

The ordinance currently caps base height at a maximum of 130’ in the TOD-UC district, its most dense, and offers developers additional height in exchange for bonus points that advance other City objectives, like affordable housing, transportation improvements or energy efficiency. While we support each of these policy goals, we believe City Council should do everything possible to encourage density in our transit corridors, and not restrict itself from considering economic development opportunities that would otherwise be limited by the building height caps in each TOD district.

Click here to read more.

Charlotte Housing Policy Conference on April 24

Posted on April 11, 2019

Join UNC Charlotte Childress Klein Center for Real Estate for the Charlotte Housing Policy Summit on Wednesday, April 24 at UNC Charlotte’s Center City Campus. This event will address Charlotte's housing policy implications based on the analysis discussed in the “State of Housing in Charlotte” report and summit.

 

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2019 NAIOP NC Statewide Conference Keynote Presentation Offers Great Insight

Posted on April 9, 2019

On March 21, John W. Martin, CEO of the Institute for Tomorrow, presented Transcendent Trends Shaping the Future of North Carolina and the Future of Built Environments. In this highly entertaining and thought-provoking keynote presentation, John W. Martin, CEO of the Institute for Tomorrow, outlined the top “must know” demographic and cultural trends shaping the future of North Carolina. As a research-based futurist, John shared the implications of each trend on the built environment and the commercial real estate development industry, including how buildings, developments, activity centers, and even entire communities will be designed and constructed in the decades ahead.

Click Here to view the PowerPoint

LUESA Proposes Dramatic Development Fee Hikes for FY 2020

Posted on April 8, 2019

Mecklenburg County LUESA is proposing dramatic increases to its Land Development, Zoning and Floodplain Permitting Fees for FY 2020, as it seeks to end a longstanding practice of supporting Land Development Services with excess stormwater fee revenue.

The proposed increases, combined with the elimination of two vacant stormwater positions, will allow Land Development Services to cover 100% of its operating costs, says Land Development Director Dave Canaan. With the Town of Huntersville starting its own land development permitting operation this summer, the County's Land Development Services division will handle projects in the five remaining towns and the ETJ. The City of Charlotte charges separate fees for land development permitting within its boundaries.

Both REBIC and the Greater Charlotte HBA have voiced our strong opposition to the proposed fees (listed below), which represent year-to-year increases of nearly 200% in some cases. Fees for multi-year projects will be phased in over two years, and new fees will be implemented for re-inspections and re-reviews of development plans.

Click here to read more.

Congratulations to Phil Kuttner on Being Named One of CBJ's Most Admired CEOs

Posted on April 8, 2019

This year, the Charlotte Business Journal added a new awards program to recognize established local leaders who have a strong vision for their companies, have shown commitment to culture in the workplace and made significant contributions to the community. 

The Most Admired CEO Awards was held on March 29 at The Westin Charlotte hotel uptown. Thirty-nine leaders were recognized across more than a dozen industry categories.

Nominations for this program were open to the public and came from members of the business community, within the honorees' organizations and externally. The CBJ editorial team selected honorees to recognize within each industry category.

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Carried Interest, QIP Bills Introduced in Congress

Posted on April 1, 2019

Lawmakers return to Washington, D.C., this week after spending time in their districts. Several measures have been introduced that are important to NAIOP and commercial real estate. The Carried Interest Fairness Act of 2019, introduced in the House by Rep. Bill Pascrell (D-NJ) and in the Senate by Sen. Tammy Baldwin (D-WI), aims to treat certain income currently taxed at the capital gains rate as ordinary income. This would be a major change, since the top capital gains rate is 20 percent and the highest rate on ordinary income is 37 percent.

Less than two years ago, Congress passed the Tax Cuts and Jobs Act of 2017 (TCJA), a law that NAIOP strongly supported. Lawmakers recognized that taxing carried interests at a lower rate than ordinary income provides the necessary incentive for entrepreneurs to undertake risks inherent in development. The provision was therefore kept in place in the new tax law, though a new three-year holding period was imposed. The three-year holding period was intended to ensure that “carried interests” were used primarily for longer-term capital assets.

NAIOP has opposed changes to the taxation of real estate carried interests, and is working with its real estate allies to educate lawmakers in both the House and Senate on the changes already made to carried interest taxation.

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Big Data in Office Buildings Holds Promise Despite Privacy Worries

Posted on March 29, 2019

By Margarita Foster

Property managers are using “dynamic and multidimensional” information for operations but not yet for tenant engagement.

A white paper published by the NAIOP Research Foundation titled “The Office Property and Big Data Puzzle: Putting the Pieces Together”found that office building owners are capturing, storing and analyzing data to operate building systems but not to recruit and retain tenants.

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NAIOP Insights: Blurring the Retail Line

Posted on March 28, 2019

 

Redevelopment is almost 100% of what's going on in retail real estate.

Today developers are selecting premier spots where they have access to customers, and that often means reusing existing retail locations.

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South Chapter Luncheon: The Future of Real Estate Development in Charlotte

Posted on March 28, 2019

Join the South Chapter of the Charlotte Regional Business Alliance for our first discussion of the year focused on Charlotte area real estate developments. Our industry experts will cover LoSo Station, RailYard South End, The River District, Apex SouthPark and more. 

Guest Speakers:
Chris Thomas, Partner, Childress Klein
Elizabeth McMillan, LEED AP, Crescent Communities
Matt Lucarelli, Director of Project Management, Beacon Partners

Moderator:
Alyson Craig, Deputy Director, City of Charlotte 

Agenda: 
11:30 - Noon : Registration and Networking
Noon - 1 p.m. : Lunch and Program 

*This event is $30 for members, $40 for access and $60 for non-members.









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Construction Momentum to Continue Through First Half of 2019

Posted on March 25, 2019

By Todd Burns

Facing a mix of potential risks and boosts, the U.S. construction industry is positioned to provide ample excitement in 2019. Forward indicators are flashing green, but with project margins facing pressure from all sides, a year with growth equal to that of 2018 would be considered a success.

Risks to the sector – including trade war escalation, deteriorating macroeconomic conditions and the worsening labor shortage – have many of us in the industry watching closely for signs of a slowdown. Meanwhile, potential boosts such as a large-scale federal infrastructure package, relief from tariffs and the continuation of 3.5 percent annual GDP growth, generate confidence that momentum in the industry will continue for the next few months.

Click here to read more.

Current Kannapolis UDO Assessment Report

Posted on March 25, 2019

As REBIC previously reported, the City of Kannapolis is rewriting its UDO.  In November 2018, City Staff along with the consultant team, Clarion, began that process.

Clarion has prepared a UDO Assessment Report for public review.  The report is diagnostic in nature, and serves as an outline of recommended changes that should be considered as the text of the UDO is drafted.

REBIC and the City of Kannapolis invite you to review the  UDO Assessment Report and provide your feedback.  You may do so by email or phone (contact information found below).

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House Lawmakers Prepare to Discuss Infrastructure

Posted on March 22, 2019

The House Ways and Means Committee will hold a hearing on Wednesday to discuss what the committee calls: “Our Nation’s Crumbling Infrastructure and the Need for Immediate Action.” The committee handles federal spending matters and is chaired by Rep. Richard Neal (D-MA).

The availability of modern and efficient infrastructure systems is a major factor in real estate development and investment decisions. The success of commercial real estate projects is largely dependent on access to quality roads, ports, rail and other infrastructure systems. Improving the nation’s infrastructure is one of NAIOP’s 2019 legislative priorities, and building the infrastructure the country needs will require federal investment.

In last month’s State of the Union Address, President Donald Trump said that infrastructure is an area that may be ripe for bipartisan cooperation. Rep. Peter DeFazio (D-OR) announced that he also hopes the parties can work together. “We face a $1 trillion surface transportation investment gap over the next 10 years to fix the infrastructure we have, meet future needs, and restore our global competitiveness,” he said in a news release. “Any serious infrastructure proposal must provide sustainable, long-term federal funding so we can make these necessary investments, create millions of living-wage American jobs, increase economic growth, and decrease congestion and emissions.”

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NAIOP NC Announces 2019 Award Winners at Statewide Conference

Posted on March 22, 2019

NAIOP North Carolina, comprised of NAIOP Charlotte, NAIOP Piedmont Triad, and NAIOP Raleigh Durham, held its annual statewide conference March 21-22, 2019 at the Pinehurst Resort, where over 240 real estate professionals were in attendance. At the conference, NAIOP NC announced the 2019 Award Winners, recognizing projects that positively influence our community and industry.

2019 Award Winners

New Development Project of the Year – BB&T Leadership Institute submitted by CJMW Architecture

In June 2018, CJMW Architecture broke ground on the BB&T Leadership Institute in Greensboro, NC. A study of the terrain and natural features helped integrate the building into the site with a soft footprint. The full program was broken into smaller building elements that are linked together to create a sort of “village,” lending to the nickname “a village in the woods.” Each element has views of the lake and woods and glass walls that bring the outside in, allowing guests and staff to connect with nature, eliminating the distractions of the outside world while promoting a more inward focus. As an executive leadership program, the Leadership Institute helps grow managers into current and future leaders. Leaders from numerous local and regional companies have attended the Leadership Institute’s programs – gaining insight and training that then help them grow their own companies.

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Industrial Demand to Remain Level as Economy Steadies

Posted on March 20, 2019

By Dr. Hany Guirguis and Dr. Joshua Harris

The forecast for net industrial space demand will remain steady in 2019. According to Dr. Hany Guirguis of Manhattan College and Dr. Joshua Harris of New York University, demand will remain at approximately 57 million square feet per quarter for 2019. That is unchanged from the average actual 2018 quarterly absorption of 57 million square feet. Industrial absorption in the final half of 2018 came in slightly above expectations due to higher consumer spending and retail sales, which were buoyed by a strong job market.

Industrial demand will be off to a strong start in 2019 with a potential tapering off into 2020 as rising interest rates moderate the economy’s growth rate. At present, the risk of a downturn in the industrial space market appears slim as the nationwide vacancy rate sits at a historically low 7.0 percent. Further, gross and net asking rents are at all-time highs, indicating that the market supply continues to tighten at a steady rate.

Click here to read more.

New Report: Industrial Demand to Remain Level as Economy Steadies

Posted on March 4, 2019

The NAIOP Research Foundation has published the NAIOP Industrial Space Demand Forecast for Q1 2019.

Key Takeaways

  • Demand will remain at approximately 57 million square feet per quarter for 2019. That is unchanged from the average actual 2018 quarterly absorption of 57 million square feet.
     
  • At present, the risk of a downturn in the industrial space market appears slim as the nationwide vacancy rate sits at a historically low 7.0 percent. Further, gross and net asking rents are at all-time highs, indicating that the market supply continues to tighten at a steady rate.
     
  • While data are somewhat suppressed due to the U.S. government shutdown that took place from December 22, 2018, until January 25, 2019, economic indicators point to moderate growth.
     
  • Overall U.S. economic activity will remain steady in 2019, with annualized rates of GDP growth in the mid-2 percent range. Steady growth is the biggest factor keeping the industrial demand forecast stable. The labor market and overall consumer confidence are also expected to grow for the year, with industrial space demand increasingly influenced by consumer spending.

Overall, the U.S. industrial real estate markets appear to be healthy and stable. It is the asset class that is potentially in the best position to weather any macroeconomic downturn that may come in the next several years.

View the forecast.

Charlotte Planners Release Revised TOD Ordinance, Set Public Hearing for March 18th

Posted on February 26, 2019

The Charlotte Planning Department late last week released a revised draft of its proposed Transit-Oriented Development (TOD) Ordinance, ahead of a March 18th public hearing.

REBIC is in the process of reviewing the ordinance, which is available for download HERE. We strongly encourage any developers considering projects in the City's transit corridors to look through the draft and provide us with any feedback you may have.

Some of the changes in the new draft include:

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New Report: Economic Impacts of Commercial Real Estate (2019 Edition)

Posted on February 20, 2019

The NAIOP Research Foundation has published the Economic Impacts of Commercial Real Estate report.

Combining the economic contributions of new development with the economic contributions from operation of existing buildings, the following economic contributions were made:

  • Contributed $1.0 trillion to U.S. GDP
  • Generated $325.9 billion in salaries and wages
  • Supported a total of 8.3 million new and existing jobs

Key factors impacting economic growth in 2019 and beyond include the following:

  • Interest rates. They are projected to move higher in 2019 as the Federal Reserve raises its rate three-quarters of a point in two or three increments over the year;
  • Labor shortages. They are already appearing in several key sectors—construction is one of them—and will tighten further in 2019 with resulting increases in wage inflation;
  • Energy prices. which unexpectedly declined during the second half of 2018 are expected to rebound in 2019 to their highest levels since 2014; and
  • The resolution of trade wars and higher tariffs instituted in 2018 and how these might affect U.S. exports, which increased their contribution to GDP expansion in 2018.
Read the Report

Tentative Agreement on Federal Spending Deal

Posted on February 19, 2019

With a Friday deadline looming, lawmakers in Congress say they have reached a deal on a spending bill that would keep the government open for the rest of the fiscal year. Without an agreement, funding for about a quarter of the federal government would run out on Feb. 15.

The spending agreement would reportedly include some $1.3 billion for barriers on the U.S.-Mexico border. That’s far less than the $5.7 billion that President Donald Trump had been demanding.

During NAIOP’s annual Chapter Leadership and Legislative Retreat in Washington, D.C., last week, keynote speaker Bret Baier of Fox News suggested a compromise. Baier said Trump probably will not get a physical “wall” on the border, but could get increased funding for border security. He predicted that might be enough for Trump to declare a win on the issue.

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Deadline Approaching: NAIOP/Prologis Inclusion Scholarship

Posted on February 15, 2019

NAIOP and Prologis are partnering to provide a program scholarship to up to 10 individuals, helping prepare a pipeline of women and minorities for development and operations positions in commercial real estate.

Women or other underrepresented minorities who are demonstrating leadership and responsibility in the CRE profession are invited to apply for this program that will advance your industry knowledge and connect you with leaders across North America.

Applications for the scholarship are accepted online. The deadline to apply is February 22, 2019.

Learn more.