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Top Five US Metros for Life Sciences In 2022

Life sciences

TOP FIVE US METROS FOR LIFE SCIENCES IN 2022

By 

Growth in the life sciences sector has driven demand in recent years for both commercial real estate space and labor to accommodate this specialized sector. A new study by commercial real estate platform CommercialCafe set out to identify the best metros for life science companies in 2022 and assessed more than 40 metropolitan statistical areas (MSAs) in terms of regional talent pool and workforce; accessibility of local office markets; the degree of availability of existing dedicated property; as well as the state of the local pipeline aiming to expand local life sciences capacity.

Boston took the number one spot on the list, with San Francisco in second place, then San Diego third, New York fourth, and Washington, D.C., rounding out the top five.

A longtime “flagship market” for life sciences, the Boston metropolitan area remains a leader in the sector. The MSA stood out for several key indices scored in the ranking: Boston boasts the largest labor pool among the metros analyzed, as well as the largest life sciences real estate market — nearly 25 million square feet of existing dedicated property, of which just under 14 million square feet was LEED-certified space. What’s more, with an additional 23.8 million square feet of new life sciences developments in the pipeline — under construction, as well as in the planned and prospective stages — Boston seems firmly placed at number one for the foreseeable future.

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The Unexpected Challenges (and Solutions) of Multilevel Warehouse Design

Costco
  • By Russ Hazzard, Jonathan Chang, Development Magazine (photo of Vancouver, B.C. Costco by Raef Grohne)

Experiences in Canada and Asia provide case studies for building these complex properties.

Over the past 15 years, multilevel warehouses — particularly those used for retail purposes — have been a growing trend across Asia and, more recently, in the United States. However, some challenges accompany their design and construction that are not encountered in the traditional approach to large-format retail. With operational criteria at the top of the list, these challenges vary heavily based on several factors, including location, footprint, environment, jurisdictional requirements, and cultural and community influences.

The increase in demand for and construction of multilevel warehouses has unearthed numerous unique considerations not present in traditional warehouse environments. These challenges — each intricate in their own right — have required creative solutions and careful programming to successfully bring each project to life.

Parking and Vehicle Flow

One of the most critical design challenges for vertical warehouses is the traffic flow of vehicles and the structure’s parking. While the goal is to keep the sales level on a single floor for ease of operations and the consumer’s shopping experience, parking for multilevel warehouses can reside either above or below grade. Both options have pros and cons: Below-grade parking requires excavation, which can increase costs and complications. However, it provides a solution for lot coverage or height restrictions in situations where those apply. Above-grade or rooftop parking is preferred as it saves both construction time and money.

Customized resolutions to optimize vehicle traffic flow and increase ease of parking have also been employed, varying from warehouse to country to country. For example, in Sinjhuang, Taiwan, indication lights for open parking spaces are used to determine capacity at a glance. In Suzhou, China, car ramps at the entrance steer customers directly up to each floor, allowing them to bypass complete levels. Larger-than-regulation parking spaces — typically very compact in Asia — are also used, granting customers peace of mind. There is no need to worry about maneuvering around tightly packed vehicles in the garage. As an added benefit, large spaces also increase vehicle flow; running in and out of an area is completed in one move vs. two or three.

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NAIOP on Carried Interest and Update on Senate Passage of Reconciliation Bill

Last week, the U.S. Senate passed the Inflation Reduction Act of 2022, a $740 billion budget reconciliation measure with provisions to address climate change and energy security, extend federal healthcare subsidies, and allow Medicare to negotiate prescription drug prices. As we informed you last week, the bill, which had been negotiated by Senate Majority Leader Charles Schumer (D-NY) and Senator Joe Manchin (D-WV), contained a proposal changing the taxation of carried interests that would have harmed the commercial real estate industry and real estate entrepreneurs.

When the Schumer-Manchin agreement was announced, NAIOP and NAIOP Arizona, along with our national real estate allies, mobilized to support Senator Kyrsten Sinema (D-AZ) in her efforts to oppose the proposed changes to carried interest. In order to ensure her vote, the proposal was dropped from the bill before the legislation was brought up for floor debate.

We are gratified that the concerns of NAIOP and the real estate industry were considered on this very important issue. For more than a decade, NAIOP has successfully opposed various proposals to alter the tax treatment of carried interests, or “promotes” as they are known in real estate. While characterized in the media as affecting Wall Street hedge fund managers, these tax increases would have had a much broader economic impact, impacting real estate partnerships, the venture capital industry and others. We have been engaged with policymakers long before this latest proposal was introduced, and our members’ support has been extremely helpful.

Senator Sinema promised to continue working with Senator Mark Warner (D-VA) to develop legislation reforming carried interest taxation. I want to assure every NAIOP member that, on this and the other important issues affecting commercial real estate, we and our NAIOP chapters will continue our strong advocacy on behalf of you and our industry.

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Crescent Managing Director Rathie a 2022 Developing Leader

Congrats to Sagar Rathie for being named a 2022 Developing Leader award winner by NAIOP. Sagar Rathie

Sagar joined Crescent Communities in 2016, and leads all aspects of Crescent Communities Commercial development and new investment growth through the East and West, including North Carolina, Tennessee, Georgia and Florida. His primary responsibilities include acquisitions, predevelopment, and financing, as well as managing Crescent Communities' $800 million commercial pipeline. Rathie has extensive capital markets experience, having collectively raised over $3 billion in capital throughout his career.

Previously, he was Crescent Communities' Director of Corporate Finance and Investor Relations, and led the execution of the Company's multiyear strategic plan. Sagar received his MBA from UNC-Chapel Hill, Master's in Engineering from Duke University, and BS in Biomedical Engineering also from UNC-Chapel Hill.

City Council Members Meet with NAIOP Charlotte for LWAL

Last week, NAIOP members met with City Council Candidates Dimple Ajmera and Marjorie Molina to discuss important issues impacting Charlotte’s CRE industry.

LWAL two

The Lunch with a Leader series provides NAIOP Charlotte members an exclusive opportunity to meet and interact with key leaders in our community. Look for upcoming NAIOP Charlotte fall events here.

LWAL one

UDO: Planning Committee to Review and Recommend

Compiled from REBIC, staff reports

REBIC’s Rob Nanfelt reported Tuesday that the City’s Planning Committee is taking up the matter of the proposed Unified Development Ordinance. Next month, committee members will take any additional recommendations before the third/final draft.

Last week, the Charlotte City Council received comments from the community during a public hearing on the proposed UDO. Click here to view the resolution. The entire hearing is available to view here – beginning approximately at the 2:51:30 mark.   

Next is a review and recommendation from the City’s Planning Committee scheduled to begin Tuesday, July 19, at 5 p.m. Those interested can view it on the City’s Planning Department YouTube Channel. The complete agenda and meeting packet is available here.

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Charlotte UDO Public Hearing Held Monday

UDO

On Monday, Charlotte's proposed Unified Development Ordinance (UDO) public hearing took place in the City Council Chambers. 

Many in the audience turned out for the Public Forum portion of the plan, but several neighborhood activists were also on hand. That group mainly wanted to challenge the ordinance provision allowing for higher-density dwellings in single-family neighborhoods. REBIC supports a wide range of housing types and believes the development of additional units is necessary to meet current and future demand.

The City Council also voted 9-2 to adopt a policy providing source of income protections to prospective renters of properties developed using a taxpayer-provided subsidy, conveyance of property, or infrastructure reimbursement incentive such as a Tax Increment Grant (TIG). The policy seeks to promote the use of Housing Opportunity Vouchers that some property managers and landowners have been reluctant to accept. Proponents have argued the policy is necessary to eliminate a discriminatory practice. Opponents are concerned it will result in less affordable housing units for future development.

More from the meeting

The Charlotte City Council received comments from the community on Monday at a scheduled public hearing on the proposed Unified Development Ordinance (UDO). Click here to view the resolution. The entire hearing is available here - beginning approximately at the 2:51:30 mark.   

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Charlotte Future 2040 Policy Map Now Official

The Charlotte Future 2040 Policy Map took effect on July 1. This map will replace the current Future Land Use tool. The city thanked all who participated and provided input.

To give some history about the plan, the Charlotte Future 2040 Comprehensive Plan was adopted in June 2021. Charlotte City Council adopted the Charlotte Future 2040 Policy Map on March 28. 2040 Map

To access the map, go to here. To see the 2040 Comprehensive plan, go here.

Have more questions about the Policy Map?
Planning Department staff will host virtual and in-person office hours each month
for the rest of the year to answer additional questions.

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Vacant Storefronts Can be Repurposed into Retail Incubators

Retail incubator

Vacant Storefronts Can be Repurposed into Retail Incubators

They can provide an immediate boost in shopping districts and grow future businesses into long-term tenants.

  • Written by Ilana Preuss, Development Magazine

The COVID-19 pandemic has left America’s retail districts pockmarked with empty storefronts, but there is a creative solution. These vacant spaces, which often can be purchased or rented at reduced prices, are prime targets for conversion into retail incubators.

Retail incubators, like business incubators, nurture new or small-scale entrepreneurs during the startup phase. They mitigate some of the challenges of opening a business by providing financial and technical assistance, such as the basics of marketing and business plans. Tenants typically share space, ideas and operating expenses in locations that they could not otherwise afford. Many spaces have flexible or temporary lease terms. Some allow for small-scale manufacturing and hold community events, such as product demonstrations, fashion shows and art openings.

In addition to real estate, retail incubators provide fledgling businesses with valuable resources such as technical and financial assistance.  

According to the U.S. Chamber of Commerce, new business applications in the United States set an all-time record of 5.1 million in 2021. At the same time, the pandemic has led to consolidation of space and locations by major retail brands, which reduced the prospect of attracting businesses. The challenge for small businesses is they can’t immediately fill the footprints of major store closings. However, they can make temporary use of retail space to establish their businesses, and occupying formerly abandoned stores can help energize struggling downtowns.

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2040 Planning Academy Starting Tuesday, June 21

2040 Planning Academy

2040 Planning Academy Starting Tuesday, June 21

Do you have questions about all the development you see in CLT? Do you want to know more about how CLT plans for its future? Are you interested in influencing the future of your neighborhood?

The 2040 Planning Academy, formerly the Community Planning Academy, is a free 5-class program aimed at helping residents better understand the role planning plays in building communities. Through group discussions, presentations, and interactive activities, participants will learn when and how they can be involved in planning processes and help influence the future of their community.

The application window is open starting today, Tuesday, June 21, 2022, and will close on Sunday, July 17, 2022, at midnight.

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Permit Reform Legislation Advances Following NAIOP’s N.C. Advocacy Day

BY TOBY BURKE,   

Members from NAIOP’s three chapters in North Carolina traveled to Raleigh last week to advance the priorities of the commercial real estate development industry in meetings with state lawmakers. The top priority for NAIOP of North Carolina, the state alliance of NAIOP chapters, is the passage and enactment of House Bill 291, permit reform legislation sponsored by State Representative Jeff Zenger.

Local building permits are an essential and fundamental requirement for the development and improvement of commercial and residential properties. However, the processes for obtaining these permits can vary by city and county in North Carolina. These variations lead to uncertainties and delays in projects moving forward, which can impact the costs, financing and contractional relationships with contractors and providers of construction equipment and materials.

The enactment of House Bill 291 would bring reforms to the permitting process similar to those advocated by our local chapter in Georgia which were ultimately enacted into law in that state. These reforms to the local permitting process bring more predictability and accountability, reducing uncertainty and unnecessary delays. Core elements of the bill include:

  • A local permitting entity has 21 days in which review the plans.
  • During the 21 days, the local entity shall resolve issues associated with the application and may seek additional information from the applicant.
  • If additional information is needed or the application must be resubmitted, the permitting entity has 15 days from receipt of the additional information to issue a permit.
  • If the local permitting entity is unable to meet the time parameters, the applicant or inspections department may seek approval from a certified third-party (engineer) or the Department of Insurance.

The North Carolina House of Representatives passed House Bill 291 in May of 2021 on bipartisan vote of 79-33, sending the bill to the state Senate. The legislation was eventually sent to the commerce and insurance committee in March for their consideration. Our meetings last week focused on urging Senate leadership and the committee chairs to move this important legislation forward before adjourning for the year as early as the end of June. NAIOP of North Carolina’s advocacy played a key role in HB 291 being scheduled the following day for a hearing before the insurance committee the subsequent week.


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NAIOP Charlotte visits Raleigh for Legislative Day

NAIOP three

As part of an annual visit, NAIOP members visited elected North Carolina's elected officials today in Raleigh. Representing the commercial real estate industry’s perspective is critical to cultivate future relationships when challenges arise in the state legislature. 

NAIOP two

 

Construction Sites Build a Circular Economy

Genesis Marina

 Phase 3 Real Estate Partners’ Genesis Marina, a 550,000-square-foot life science development south of San Francisco, is the nation’s first precertified TRUE zero-waste project. Photo courtesy of Phase 3 Real Estate Partners

 

By NAIOP Development writer Alice Devine

 

Zero-waste efforts attract greater attention, including a new certification program. 

New buildings can create architecturally pleasing skylines and yet leave construction debris in their wakes. In fact, the U.S. Environmental Protection Agency estimates that construction and demolition debris accounts for more than twice the amount of generated municipal solid waste in the U.S. 

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Class A Buildings Push Office Market Stabilization

Office market vacancy rates kept surging for the 10th straight quarter to start 2022, according to the NAIOP Research Foundation. The group recently published its Office Space Demand Forecast for Q2 2022. You can read the full report here
Office building
The group boasted that Class A buildings are key in many parts of the country, bolstering net absorption rates in areas like the Sun Belt. These work spaces are key in brining in skilled employees. The group said "suburban markets and life sciences hubs are recovering better than the national average as more employers embrace a return to the office and the pandemic eases."

Other key takeaways mentioned 

  • Leasing activity is up year over year, which signals that firms are more comfortable making longer-term commitments to office space. Property owners have been willing to offer greater tenant improvements to encourage signing, indicating that tenants still have the upper hand in lease negotiations. These signals indicate a move toward a more stable equilibrium as the office market finds its balance.
     
  • Given these trends and signs of a slowing – but still growing – economy, net office space absorption in the remaining three quarters of 2022 is forecast to be 46.9 million square feet, essentially unchanged from the previous forecast for these quarters (46.6 million square feet).
     
  • Total net absorption in 2023 is forecast to be 47.3 million square feet, with an additional 6.5 million square feet absorbed in the first quarter of 2024.

Strategic Mobility Plan Out Thursday


UDO graphic

Thursday will mark the release of the Strategic Mobility Plan (SMP) draft. The public can access the May 19 meeting at this link.

The SMP’s goal is to shape the mobility future for the City of Charlotte and expand on the “Safe and Equitable Mobility” goal of the Charlotte Future 2040 Comprehensive Plan (2040 Plan). The SMP dives deeper into the mobility policies of 2040 Plan to achieve a safe, connected, equitable, sustainable, prosperous, and innovative mobility vision for Charlotte. To learn more, follow this link to the Strategic Mobility Plan homepage.

SMP Virtual Engagement Sessions will be live on Thursday, May 26 (6 p.m.) and Tuesday, May 31 (noon). Meeting links will be available by visiting charlottenc.gov/smp.

Additionally, you can sign up to share input during the public comment portion of the City Council Business Meeting on Monday, June 13, at 6 p.m.

UDO – Updates

On Wednesday, there will be a presentation on the findings related to the Economic Analysis of the draft UDO.


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A Conversation with the 2022 NAIOP Chair

 

originally published by KATHRYN HAMILTON, CAE for NAIOP National with permission to share:

Leadership Compass

In the Spring issue of Development magazine, I shared some of my views on NAIOP’s value to our members and what I’m looking forward to as the 2022 Chair. As I wrote that column, I found I had much more to say than space allowed! So, I’m sharing a bit more of the conversation with our Market Share blog readers. If you already haven’t, I’d invite you to read the At Closing column in the Spring issue of the magazine.

Read the Full Article

Employers Continue Return-to-office Plans, Resulting in a 1.2% Increase in Office Listing Rates Year-Over-Year

 

originally published by IRINA LUPA for NAIOP National with permission to share:

Office Covid

Now that pandemic regulations have expired across the U.S., many companies are calling employees back to work. In the meantime, return-to-office techniques have changed dramatically in the last year, thereby ushering in a new era for the sector. In particular, the emergence of hybrid work arrangements has contributed to an increase in demand for high-quality office assets and has already widened the rate difference across classes in several markets.

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Reimagining the Post-pandemic Office

 

originally published by KATHRYN HAMILTON, CAE for NAIOP National with permission to share:

Office Pic

How we think about work and the workplace going forward has changed, explains Kristin Jensen, AIA, principal, and co-managing director, Gensler, in a new video. “Work” and “place” have been decoupled, and work can happen anywhere. Cubicle rows and private offices are replaced by open spaces and shared workstations used by different employees depending on the day of the week.

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A Compelling Argument for More Solar in CRE

 

originally published by BRIELLE SCOTT for NAIOP National with permission to share

Solar

Environmental, Social, and Governance mandates (ESG) are becoming a reality not only in large enterprise businesses but also in their entire supply chains. Forces from upstream as well as downstream, combined with pressure from stockholders, stakeholders, employees, and customers, are ushering in a new era where ESG practices are no longer considered optional.

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Commercial Real Estate’s Opportunity to Design a New Era of Human Experience

 

originally published by JANET POGUE MCLAURIN, AIA, FIIDA, NCIDQ, LEED AP  for NAIOP National with permission to share:

Office

 

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