Filtered by category: Industry Clear Filter

Survey Shows Progress in Diversity Efforts in Real Estate Investment Management

Originally published for NAIOP's Development Magazine Summer 2021 Issue by Trey Barrineau.

However, a lot of work remains despite tangible advances in recent years.

Women and minorities have made some progress in reaching the C-suite in commercial real estate investment management firms during the past few years, but the 2021 NAREIM Diversity & Inclusion Survey shows that there is still a lot of work to do.

“Material, sustained changes will take time to show through in the data,” said Zoe Hughes, CEO of NAREIM, in a release. “But what is clear is that there is a mandate and momentum for DEI (diversity, equity and inclusion) to be a priority within the real estate investment management industry.”

The survey, conducted by NAREIM and executive recruitment firm Ferguson Partners, reveals that the real estate investment management industry as a whole is mostly male and white. Men, who are 49.2% of the U.S. population according to the U.S. Census, comprise 60% of full-time employees in the real estate investment management, and non-Hispanic whites, who are 62.8% of the U.S. population, represent 73% of workers. (Blacks make up 6% of the industry, while Asians and Hispanics each represent 10% of CRE investment-management staffing.)

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The Acceleration of E-commerce and the Modern Supply Chain

Originally published on September 1, 2021, by Kathryn Hamilton for NAIOP Newsletter.

The term “supply chain” was coined on June 4, 1982, when the Financial Times published an article that used it as a replacement for “production and inventory management.” Now a permanent part of our lexicon, looking back at just how the supply chain has grown and changed over four decades is how a panel of industry leaders began their presentation at NAIOP’s I.CON West, held this week in Long Beach, California.

“Take a walk back to the 1980s,” invited Rich Thompson, international director, supply chain & logistics solutions, Americas, JLL. “There were no laptops, no internet, no cell phones, and no Amazon. Catalog orders took around 14 days to arrive, and retail real estate was hot.”

Today, the supply chain is an increasingly popular field of study, Amazon is the second-largest employer in the U.S. and the third most valuable in terms of revenue, and online orders are delivered in two days – or less – at no change. Industrial is hot.

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Four Perspectives on the State of the CRE Economy

Originally published on September 1, 2021, by Marie Ruff for NAIOP News.

Commercial real estate professionals always seek to determine where markets stand now and what to expect for the future. That future is particularly uncertain today as we see the continued impacts of the COVID-19 pandemic.

JLL Chief Economist Ryan Severino shared his economic analysis in a keynote address at NAIOP’s I.CON West this week in Long Beach, California. In his role at JLL, Severino is responsible for global and regional economic research, analysis and forecasting, as well as property market forecasting. He presented four perspectives on the economy ranging from the short-term to the industrial-specific.

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Transformative Lessons for Commercial Real Estate Leaders

Originally published on August 24, 2021, for NAIOP News.

Through his experience leading a turnaround as the former CEO of Prologis, Walt Rakowich realized leaders today must lean into timeless values and principles, but with a fresh perspective on the new and complex realities of our leadership climates. In a keynote address next week at I.CON West: The Industrial Conference, Rakowich will share advice on engaging your values and your organization with purpose and passion. Join the 700+ industrial real estate leaders planning to attend I.CON West next week in Long Beach.

 

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New Report: Industrial Space Demand Forecast

Industrial Space Demand Remains Strong 

Demand for industrial real estate continues to be strong as the long-term trend toward e-commerce (and away from in-store sales) continues with no end in sight. With nearly 100 million new square feet delivered nationally since the beginning of the year, 450 million square feet currently under construction and another 450 million planned, the demand for industrial real estate still outpaces supply.1

Because of this, authors Dr. Hany Guirguis and Dr. Michael Seiler forecast that the total net absorption in the second half of 2021 will be 162.6 million square feet with a quarterly average of 81.3 million square feet. In 2022, the projected net absorption is 334.6 million square feet with a quarterly average of 83.6 million square feet. An improvement in the outlook for the economy in 2021 and 2022 is behind the upward revision of the 2022 forecast. For example, the real GDP growth rate is now forecast to be 7% in 2021, above the previous forecast of 5% growth. As economic growth is projected to revert toward long-term growth rates in 2023, net absorption in the first half of the year is forecast to be 160.5 million square feet, for a quarterly average of 80.2 million square feet. 

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Two for Tuesday - 2040 Comp Plan Town Hall!

#1) 2040 Comprehensive Plan - Next Steps with Councilmembers Renee' Johnson and Victoria Watlington

The first draft of the Unified Development Ordinance (UDO) is expected to be released to the public on or around October 4th. A recent presentation from Planning Staff to Charlotte’s Transportation, Planning, & Environment Committee contained the following:

  • 6-foot sidewalks everywhere (increased from the current 5-foot regulation) (pdf page 20)
  • All parking to rear or side of attached housing (pdf page 18)
  • Future right-of-way exactions (pdf page 20 & 21)
  • The developer provides bus shelters as a condition of approval (pdf page 20)             
  • Traffic Impact Studies (TIS) for all development even “by right” (pdf page 21)
  • “By right” infill may be subject to greater stormwater regulations and tree save (pdf page 22 and 23)
  • Greater tree save rules (pdf page 23) 

These provisions will add substantial costs and likely disincentivize future infill development. We will continue to track them through the process and voice our concerns regarding adverse consequences.

 

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State and Local Governments Receive Federal Recovery Funds Under Interim Rule

Originally published on August 18, 2021, by Toby Burke for NAIOP.

The federal government has provided additional support for state and local governments in response to the COVID-19 pandemic. President Joe Biden signed the American Rescue Plan Act (ARP) into law on March 11, which established the Coronavirus State and Local Fiscal Recovery Funds. The new federal funds provide $350 billion to support state, local, territorial, and tribal governments in responding to the COVID-19 pandemic and spurring economic growth. These federal funds are a windfall for some governments that did not experience a fiscal shortfall, particularly at the state level.

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Important Government Affairs Update

Top 3 Items to Note:

  1. We are making significant progress on our efforts to identify and bring aboard a seasoned individual to provide additional eyes and ears on the ground in Iredell County and Cabarrus County.  More on that to come later this week.
  1. The City of Charlotte is seeking development/real estate representatives to serve on two advisory boards created by the passage of the policy section of the 2040 Comprehensive Plan.  It is essential we engage qualified and knowledgeable individuals to fill these positions.  We have an incredible opportunity here and I could use your help.  (Deadline is Friday, August 27th, details follow)
Charlotte Equitable Development Commission
The Charlotte Equitable Development Commission was created with the adoption of the Future Charlotte 2040 Comprehensive Plan by City Council resolution on June 21, 2021. The Commission is charged with advising in the assessment of infrastructure throughout the city and recommending strategies that balance equitable investments in areas most in need, including areas with absent and insufficient facilities, areas growing fastest, and areas targeted for growth. The Commission will work with the Office of Strategy and Budget to provide input on the development of the city’s proposed Capital Investment Plan. The Commission will provide regular updates to the Budget and Effectiveness Council Committee and quarterly reports to the entire Council.  The committee will consist of individuals with significant backgrounds in community development and infrastructure assessments. Examples of preferred experience shall include consulting engineers in the project development business; attorneys specializing in development; developers; independent business representatives; construction contractors; bankers or insurance agents engaged in the financial aspect of development; representatives from homebuilder's association; homeowners or neighborhood association representatives.
9 Members (3 appointments by Mayor, 6 appointments by City Council), Term Length – 3 years, 1 term
 
Charlotte’s Neighborhood Equity and Stabilization Commission (Charlotte’s NEST)
The City of Charlotte needs to address displacement caused by gentrification in a comprehensive, broad, and systematic, intentional manner. The recently adopted 2040 Comprehensive Plan includes the establishment of the Charlotte Neighborhood Equity and Stabilization Commission (Charlotte’s NEST). The City currently has an adopted Affordable Housing Framework coupled with a number of neighborhood programs that are used to address gentrification. However, the City desires to engage the community in developing additional strategies to limit displacement. Therefore, the Charlotte Neighborhood Equity and Stabilization Commission is established for a 3-year period and is charged with reviewing and recommending specific anti-displacement strategies and specific tools for protecting residents of moderate to high vulnerability of displacement. The Commission will make regular reports to the Great Neighborhood Council Committee, quarterly reports to the entire Council and provide recommendations for combatting displacement prior to the implementation of the Plan.
15 Members (5 appointments by Mayor, 10 appointments by City Council) who shall be appointed according to the following criteria:
- 3 appointees - Housing Advocates (1 appointed by Mayor, 2 appointed by Council)
- 3 appointees - Neighborhood Leaders or Community Organizers (1 appointed by Mayor, 2 appointed by Council)
- 3 appointees - Involved in the Real Estate Development Industry as specified below:
- Non-Profit Affordable Housing Developer (1 appointment by the Mayor)
- For Profit Affordable Housing Developer (1 appointment by the Council)
- Market Rate Housing Developer (1 appointment by the Council)
- 2 appointees - Residents who have experienced or are experiencing displacement (1 appointed by Mayor, 1 appointed by Council)
- 1 Urban Studies and Planning Representative with experience in displacement and gentrification and implementing equitable inclusive development strategies (1 appointment by the Mayor)
- 1 Housing Finance Representative with experience in rental housing finance and homeownership and affordable and subsidized housing (1 appointment by the Council)
- 1 Land Use Representative with expertise and experience in historic preservation and landmarks, zoning, and development rights (1 appointment by the Council)
- 1 appointee - Neighborhood Conditions Representative with expertise and experience in economic development, health, racial/ethnic segregation, schools and education and crime (1 appointment by the Council)
Term Length – 3 years, 1 term
 

For more information on the new advisory boards, please visit: https://charlottenc.gov/CityClerk/Pages/BoardsandCommissions.aspx

 

  1. The next phases of CLT Future 2040 (mapping and UDO) are underway –
    • Alan and I had our second monthly meeting with Taiwo and Alyson last Thursday.  As a result of that meeting, REBIC will be putting together a small group of design professionals that will meet with planning staff every two weeks (for as long as necessary) beginning a few days prior to the public release of the UDO on October 4th.  These meetings will allow REBIC representatives to provide feedback and to receive an immediate response, much earlier in the process, on elements of the proposed ordinance that could be problematic if implemented  It also allows us to be a cheerleader for those things in the UDO that help streamline the process and reduce development time frames.
    • Brenda Hayden will be joining Alan and me for the monthly meetings beginning in September.
    • A brief presentation containing the projected schedule for mapping/UDO is here.
  • Due to recent and higher than anticipated COVID infection rates, the Government Center has been closed to the public for the time being.

Charlotte Future 2040 Policy Map Survey

A special thanks to Elizabeth McMillan at Crescent Communities for sharing this information below.  Please pass along to your colleagues.

As a follow-up to the Charlotte Future 2040 Comprehensive Plan, the Charlotte Planning Department has moved into Part 2 of the implementation phase, the Charlotte Future 2040 Policy Map. This part of the process will translate the plan’s place-based policies to specific locations throughout the community.  The Planning Department has put out a survey to collect data and input from residents and professionals to help influence the Policy Map, which will help guide the UDO.

Please feel free to share this email with others in hopes that more of our voices can be heard.

Complete Survey

** The first page sets the stage for the previous work and gives an overview of the process, so may be helpful if you need a refresher.

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Stairs on the Rise

Originally published by Shantala Weiss for NAIOP's Development Magazine.

Monumental stairs can inspire greater interaction, reduce energy costs, and improve employee health and fitness.

In the wake of COVID-19, workplaces are presented with a unique opportunity to shape corporate culture's future and use physical space to foster a sense of community and innovation that can’t be offered when working from home. Building elements that align with the goals of active, sustainable, and universal design have the potential to play a crucial role in post-pandemic commercial real estate. 

COVID-19 has challenged vertical transportation strategies in buildings, which have historically relied on elevators. Ongoing concerns about physical distancing and touching surfaces mean that people may be reluctant to use elevators.  A well-dimensioned stair offers enough space for people to ascend and descend simultaneously, giving occupants more room to move than a narrow fire escape or elevator.

“COVID-19 noticeably accelerated the trend of monumental stairs in offices and other commercial spaces,” said Jim Admiraal, executive vice president of sales and preconstruction at Synergi, a national stair design-led subcontractor. “We saw an immediate spike in design plans featuring stairs as a primary vertical mode of transport for major projects all over the U.S.”

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New Report: Industrial Space Demand Forecast

Originally published by Hany Guirguis, Ph.D., Manhattan College and Michael J. Seiler, DBA, William & Mary in August 2021

Industrial Space Demand Remains Strong 

Demand for industrial real estate continues to be strong as the long-term trend toward e-commerce (and away from in-store sales) continues with no end in sight. With nearly 100 million new square feet delivered nationally since the beginning of the year, 450 million square feet currently under construction, and another 450 million planned, the demand for industrial real estate still outpaces supply.1

Because of this, authors Dr. Hany Guirguis and Dr. Michael Seiler forecast that the total net absorption in the second half of 2021 will be 162.6 million square feet with a quarterly average of 81.3 million square feet. In 2022, the projected net absorption is 334.6 million square feet with a quarterly average of 83.6 million square feet. An improvement in the outlook for the economy in 2021 and 2022 is behind the upward revision of the 2022 forecast. For example, the real GDP growth rate is now forecast to be 7% in 2021, above the previous forecast of 5% growth. As economic growth is projected to revert toward long-term growth rates in 2023, net absorption in the first half of the year is forecast to be 160.5 million square feet, for a quarterly average of 80.2 million square feet. 

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Asset Managers Can Play a Key Role in Tenants' Return-to-workplace Plans

Originally published by Rob Naso for NAIOP Development Magazine Summer 2021 Issue

A new framework for mitigating disease in the office focuses on air quality, changing behaviors and building occupant trust.

The COVID-19 pandemic has redefined the role that office landlords play in creating safe, healthy work environments. While most office workers packed up their laptops and headed home to ride out the pandemic, building owners and property managers had to pivot quickly to elevate safety measures for the essential workers who remained, in an environment with fast-changing public health guidelines. Now, they face the next stage of recovery — ensuring tenants feel comfortable returning to the workplace as vaccination rates increase.

The landlords that return their buildings to thriving, active communities will be those that expand the definition of their role to also become socially-minded strategists charged with creating safe and healthy environments, setting the stage for tenants to safely return to the workplace. Positioned at the forefront of containing future outbreaks while enabling businesses to resume activity, the responsible asset manager has become the tenants’ partner in their return-to-workplace strategy.

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Upcycling: Reimagining Underutilized Commercial Space as Public Space

Originally published by Philip Wilkinson and Teresa Bucco for NAIOP Development Magazine Summer 2021 issue.

A project in Pittsburgh demonstrates the potential of activating common areas in older retail destinations.

For nearly two decades, online shopping has seen steady growth in both traffic and sales, which has forced traditional retailers to think of new ways to draw people into brick-and-mortar stores. In more recent years, shifts toward experiential retail saw many retailers overhauling store designs to give shoppers more hyperlocal, boutique or high-end encounters while encouraging online buying and in-store pickup. 

However, concepts such as Wal-Mart’s Neighborhood Market and Target’s City Target — launched to reach transit-oriented communities and supplement declining sales at traditional big-box locations — were often slow to catch on or showed mixed results, according to a 2019 Mashed article.

Then the COVID-19 pandemic accelerated the decline of in-person buying. Digital Commerce 360 reports that total online spending in 2020 reached $861 billion, up 44% from 2019, accounting for 21.3% of total retail sales. Adobe’s Digital Economy Index shows that 2020 accelerated the typical year-over-year growth of e-commerce by four to six years. Conversely, sales from brick-and-mortar retailers fell an estimated 14%  to just $4.2 trillion in 2020, according to a June 2020 Insider Intelligence study. Due to the rise of e-commerce and the economic effects of the pandemic, it’s clear that commercial centers must evolve to become more than just shopping destinations.

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Industrial Solutions for E-commerce Grocery Fulfillment

Originally published  by Scott Murdoch for the Summer 2021 Issue of NAIOP Development Magazine.

The pandemic forced the industry to adapt quickly to meet soaring demand.

While grocery e-commerce was growing prior to the pandemic, the sector saw staggering market penetration over the course of 2020 and beyond. Concerned about safely accessing food, consumers across all demographics turned to online grocery shopping as a convenient, safe option.

A survey by LEK indicated that food e-commerce made up 3%-4% of total grocery retail sales before the pandemic and that overall penetration would reach 15%-20% by 2025. But in its February 2021 Online Grocery Report, Business Insider projected online grocery adoption will reach 55% in the U.S. by the end of 2024. Consumers have clearly grown accustomed to the convenience and safety of grocery e-commerce. 

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Commercial-Property Sales Volume Returns to Pre-Pandemic Levels

Originally published on July 27, 2021, by Ester Fung for the Wall Street Journal.

U.S. commercial real-estate sales this year have rebounded to pre-pandemic levels, fueled by historically low-interest rates and the belief of many investors that the worst of Covid-19 is over.

But the commercial-property sales landscape looks a lot different than it did before the health crisis hit in early 2020. Cities including New York and San Francisco have fallen in favor as have property types such as downtown office buildings and convention hotels.

Meanwhile, Sunbelt cities posted record sales and investors flocked to property types that performed well during the pandemic, including amenity-packed apartment buildings, warehouses and office buildings that cater to pharmaceutical and biotechnology industries. “There is a move to both new property types and new markets,” said a report recently released by data and research firm Real Capital Analytics.

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REIT Deal-Making is Robust in Light of Favorable REIT Outlook

Originally published on July 29, 2021, by Sheheryar Hafeez for the NAIOP E-Newsletter.

Real estate investment trust (REIT) merger and acquisition activity has emerged from the pandemic in full force with some $75 billion in investment nationally from January through mid-July 2021. This robust activity is expected to continue throughout what could potentially be a record-breaking year. While all 11 Global Industry Classification Standard sectors are in positive territory for the year, real estate ranks second highest with a strong 27% performance, just slightly below energy.

With the U.S. economy posting robust growth rates and expectations of a return to pre-COVID normalcy in many areas, investors are readjusting their views on various REIT sectors. Property sectors that felt the deepest impacts in 2020 – office, retail, and hotel, or “out-of-favor” sectors – are increasingly eyed by commercial real estate investors, who are betting on a strong rebound. Conversely, tech-driven and industrial REITs – or “in-favor” sectors – that benefited from the country’s increased reliance on e-commerce in 2020, have underperformed so far this year but are still in positive territory.   

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As Building Material Prices Skyrocket, Project Managers Offer Strategies to Mitigate Risk

Originally published on July 23, 2021, by Roger McCarron for NAIOP E-Newsletter.

The COVID-19 pandemic, and the waves of lockdowns and business interruptions it prompted, affected global supply chains in virtually every industry — and construction is no exception. Due to widespread shortages of building materials, and pent-up demand from projects that were delayed or postponed during the pandemic, costs for materials including lumber, copper, steel, aluminum and vinyl skyrocketed. According to the National Association of Homebuilders, lumber prices spiked to a more than 300% year-over-year increase in May. While prices have since come down, they remain higher than historical averages and data suggest that demand for construction materials is approaching pre-pandemic levels.

 

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States Look to Strengthen Local Permitting Processes

Originally published on July 21, 2021, for NAIOP E-Newsletter.

Owners and developers of commercial real estate recognize that obtaining local building permits is an essential and fundamental requirement for the development and improvement of their properties. The processes for obtaining these permits vary by municipality and state. These variations lead to uncertainties and delays in projects moving forward, which impacts the development project’s financing, cost and the retention of contractors, construction equipment and other materials.

Many state legislatures have taken action to address this by bringing more predictability, transparency, and accountability to the local permitting processes within their state. This was the case in Florida and Georgia following effective advocacy by our local NAIOP chapters. Our members were increasingly concerned with the negative effect on development with the inconsistent application of permit requirements and fees by local governing entities.

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Integrating Vaccinations into Wellness Programs

Originally published by Wendy King for NAIOP's Summer 2021 Issue.

The real estate industry faces unique challenges in designing vaccination programs based on workplace types and the nature of jobs.

As COVID-19 vaccines continue to roll out, and with the possibility of booster shots for variants as fall approaches, many commercial and residential property management companies, as well as sales and leasing brokerages, are considering how to deal with vaccinations within their workplaces. 

If designing a company-wide vaccine program, consider prioritizing vaccine distribution based on job function. For example, some essential employees must work in-person to keep commercial buildings functioning. Meanwhile, a significant portion of the workforce will likely continue to work from home until this fall or beyond. 

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Starting a Lab Facility: A Primer for Real Estate Professionals

Originally published by Daniel Castner, Brian Spence and Trevor Boz for NAIOP's Summer 2021 Issue.

This fast-growing sector can be complex to navigate for developers.

The scientific research market has grown substantially over the past 10 years. With a global pandemic top of mind, investors are looking at the life science industry now more than ever.

This expanding market is evolving into one of the fastest-growing real estate investment sectors, yet some developers, investors and real estate professionals may be intimidated or confused by the complexities in site selection, design and construction of lab facilities. Familiarity with industry-related terms and a basic understanding of what is needed to develop a successful lab research facility are key starting points. 

Scientific research requires an appropriate environment to conduct experiments, process data, foster collaboration and inspire creativity. Proximity to potential clients and talent, availability of public transportation, tax incentives, zoning restrictions and surrounding neighborhoods are intrinsic traits that must be considered when finding a suitable location to build a project. The configuration of the space can be adaptable to accommodate unknown needs of a program or a future tenant, or it can be targeted toward a specific type of science. 

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