Posted on September 28, 2017

According to CBRE’s inaugural report on the U.S. medical-office market, the steady demand for and investor confidence in healthcare-related workspace indicates it may be a “resilient sector, able to weather economic downturns and political changes.” The age 65-and-over population – now accounting for the highest per-capita healthcare spending – will nearly double by 2055 and drive an increased need for medical office space. Some findings include:

• “Cost containment is driving health care industry consolidation and fueling demand for less expensive delivery settings, such as medical office buildings and urgent-care facilities, as well as new technologies that can produce better patient outcomes at lower costs.”
• “Absorption of medical office space has outpaced new supply for the past seven years, lowering the segment’s national vacancy rate to 8% as of Q1 2017.”
• “Rising investor confidence in medical office space has resulted in increased transaction volume in the segment, which reached nearly $10 billion for the year ending Q1 2017 and pushed cap rates to a record-low average of 6.8%.”

The report includes 30 U.S. market profiles and identifies metropolitan areas with low concentrations of healthcare employment and rapidly aging populations, including Atlanta, Las Vegas and Denver. According to the report, these markets will need to ramp up healthcare employment to meet current and future needs.

Posted on September 27, 2017

A recent article titled “Power of the Ports” in Real Estate Forum magazine highlights the challenges and opportunities faced by U.S. ports in the wake of e-commerce demand and the Panama Canal expansion. Investors are increasingly drawn to ports – economic forecasters predict $155 billion in capital project investments over the next 5 years creating 1.6 million jobs. In 2014, U.S. coastal ports generated $4.6 trillion for the economy, accounting for 26 percent of U.S. GDP.

The biggest investments will occur along the Gulf Coast due to the existence of energy processing plants and transfer facilities. Most growth has occurred around East Coast ports, which are benefiting from strong economies, product demand, population growth and interest from foreign exporters. Chinese shipping companies have found it more cost effective to dock in New Jersey than in West Coast ports, as the ships can then go on to ports in Europe and South America.

Experts doubt that trade restrictions will have a dramatic effect on U.S. ports. What is more concerning is the scarcity of remaining developable land surrounding high-activity ports. Builders are forced to locate on sites farther away from the port’s hub, thereby increasing the distance from customers and resulting in potentially higher costs for shippers and manufacturers.

Posted on September 26, 2017

After a hurricane, the cost to rebuild and repair can run into the hundreds of millions. Construction firms are taking action, investing in resilient buildings that can withstand flooding and power outages from future natural disasters.

“It’s entirely a builder or a property owner’s choice of whether they want to do extra work to prevent property damage or have the right insurance or not,” Simon Koster, a mechanical engineer and principal at JDS Development Group, told Science Friday. “Those are the choices that people are starting to make voluntarily.” After Hurricane Sandy hit New York City in 2012, Koster’s group decided to design a building, American Copper, resilient to hurricanes. The lobby is lined with stone that will not weaken with moisture, and the mechanical equipment, typically found in the basement, is located on the second floor above the flood line. Additionally, a park doubles as a bioswale and helps divert water from the building. Koster predicts building resilient architecture will become the “new normal” for cities and that it is no longer a question of if a storm will strike, but when. 

Posted on September 22, 2017

By: Brian Landes

Transportation infrastructure can have dramatic effects on the value of commercial real estate.

Transportation infrastructure entails a vast number of systems and facilities that people interact with daily but rarely think about. This infrastructure takes people to work, school and play; it conveys freight across the country and around the world. Therefore, it’s no surprise that the presence — or absence — of suitable infrastructure can have a dramatic effect on the value of the commercial real estate that surrounds it.

Posted on September 11, 2017

A group calling itself the Coalition for Future Mobility – representing automakers, suppliers, smart transportation leaders and people with disabilities – is asking Congress to tell the National Highway Traffic Safety Administration (NHTSA) that it’s time to change auto safety standards so they reflect the coming of self-driving cars. The measure has passed a House of Representatives committee.

“Unfortunately, the rulemaking process is not a short one, not a cheap one and is nothing short of labor intensive,” Elliot Katz, a partner at the law firm McGuireWoods, tells Bloomberg. “The basic problem here is one we’ve seen in a lot of industries: the technology moves a lot quicker than the regulation.” The coalition wants Congress to act as soon as possible.

Bloomberg reports that more than 30 current regulations seem to require a human driver be at the wheel. Such regulations could pose a problem for autonomous vehicles, which are being developed by both tech companies such as Google and carmakers such as Volvo and Ford.

Posted on September 8, 2017

Shoppers today have three main options when they’re looking to buy: Go to a brick-and-mortar store, shop online but pick up at a brick-and-mortar store, or purchase online and have the product delivered. In a report, “Bagged or Boxed,” JLL explains that “the way shoppers value time, touch and money drives on- or offline purchasing,” and predicts which businesses are well-positioned for future growth.

When it comes to physical stores, JLL writes that restaurants, off-price retailers, dollar stores and furniture stores should have the best opportunities to succeed. All provide either an experience or a price that online shopping can’t surpass.

JLL expects that several types of stores will maintain locations, but also step up their online presence. It points to grocery, apparel, sporting goods, and toy stores as examples of categories that are seeing a move toward more online shopping.

Posted on September 7, 2017

In its latest “U.S. Top Office Metros Snapshot,” Colliers reports that “fundamentals in the 10 major office markets in the U.S. largely remained solid during the second quarter.”

The report finds that vacancy rates were unchanged in three markets, increased in four markets, and declined in three others. “Rents held firm in six of the markets tracked in this report. At the same time, two key factors point to upward pressure on vacancy rates: tenant downsizing and new supply,” the report states.

Some details from the report include:

• “Three markets – Manhattan, the San Francisco Bay Area and Seattle – have office vacancy rates well under 10% and saw no increases in the second quarter.”
• In Houston, vacancy is back above 20 percent.
• “Concerns over the impact of new supply in San Francisco and Seattle are receding, but two markets – Los Angeles and Washington, D.C. – remain exposed to construction risk.”
• Boston and Dallas markets remain solid.

Posted on September 1, 2017

The following resource is from NAIOP's I.CON: Trends and Forecasts, June 8-9 in Long Beach, California. More than 600 of industrial's top leaders gathered to connect, learn and make deals at CRE's hottest industrial event.

• Inform Your Approach to Infill Markets
  Presentation | Audio recording

Click here to view all resources from I.CON

Posted on August 31, 2017

By: Renee Eshelman

What should landlords do when they discover that “nonbinding” really isn’t?

Gone are the days of handshakes and scribbled-napkin deals. Today, most commercial real estate transactions are memorialized with a letter of intent (LOI) to outline the main agreed-upon deal points for a proposed transaction. Although signed by each party, LOIs are typically stated to be “nonbinding” and therefore not legally enforceable, merely an agreement to agree.

The nonbinding nature of LOIs can be both a blessing and a curse. Busy landlords considering a new lease might review the main points of the deal that affect their bottom line — lease term, rental rate, tenant improvements, etc. — and, finding that everything seems correct, might consider themselves finished. Why not skim over or altogether avoid reviewing the rest? The details can be worked out in the lease; there seems to be no need to put themselves to sleep reviewing the fine points now. Why spend the time and expense of legal review? What harm can these provisions really do? The answer: quite a bit!

Click here to read more.

Posted on August 30, 2017

By: Dr. Joshua Harris

Current Forecast: Third Quarter 2017 Report

The NAIOP Industrial Space Demand Forecast is based on a predictive model that forecasts demand for industrial space at the national level on a quarterly basis for eight consecutive quarters.

Posted on August 29, 2017

The law of supply and demand hasn’t been repealed, and that’s causing commercial real estate construction prices to jump, especially in the mid-Atlantic, Texas and Louisiana.

The problem is there aren’t enough skilled laborers for all of the new construction builders would like to do. The scale of the problem increases for larger projects, which require more skill and teamwork. “There aren’t enough companies with the workforce required for such complex projects,” Perryman Construction CEO Angelo Perryman tells Forbes.

The article adds that: “Multifamily buildings from eight to 24 stories tall have increased in construction cost by $23.40 per SF from 2013 to 2016, according to a Fannie Mae study, and they are forecast to jump another $15 per SF in 2017.”

Posted on August 28, 2017

The office market absorbed 8.8 million square feet of space in the second quarter, according to a report from JLL. More than half of that growth came from two markets: Seattle-Bellevue and Dallas.

“There were 11.7 million square feet of new deliveries in Q2, which helped push vacancy up to 14.8 percent,” according to JLL’s latest outlook. “Even as demand stabilizes, asking rents for new product have risen 3.2 percent over the year and by 4.9 percent for CBD Class A space.”

“Moving into the second half of 2017 and into 2018, we expect the wave of new supply to deliver over the next six quarters will markedly alter the office landscape, increasing competition among landlords for tenants and stabilizing rents in the process,” the report states.

Posted on August 25, 2017

Written by Cinda Kelley

Employers in Plainfield, Indiana, are helping fund connector bus service that brings employees to local industrial parks.

It's been more than 25 years since the central Indiana town of Plainfield embraced the transportation, warehouse and distribution industries with an aggressive, innovative business attraction effort. The town’s work paid off handsomely, and Plainfield is now one of North America’s key logistics hubs, with more than 40 million square feet of facilities at the end of 2016.

Posted on August 24, 2017

Written by Brielle Scott

You’ve heard of sailing a ship with a “skeleton crew,” but what about no crew at all?

The ghost ships from tall tales of pirates and buried treasure are no longer the stuff of fiction: A Norwegian company is developing a fully autonomous container ship that will eventually troll the high seas with no crew aboard.

Posted on August 23, 2017

Join CoreNet Global Carolinas for their 2017 Mega Event on September 13 at 1:30pm at The Ritz Carlton.

Agenda
12:45-1:30 PM – Event Registration
1:30-3:15 PM – Plenary Session/ Keynote Speaker (Paul Depodesta)
3:30-4:25 PM – Breakout Session 1
4:30-5:25 PM – Breakout Session 2
5:30-7:00 PM – Networking and Cocktail Reception

Click here for more information and to register.

Posted on August 22, 2017

By: Amanda Tran

Food halls offer small-scale opportunities for landlords, operators, chefs, and diners.

AMID A CHALLENGING retail landscape dominated by news of brick-and-mortar store closings, the food hall has emerged as a promising opportunity for the commercial real estate industry and food entrepreneurs. Although food halls vary greatly in size and focus — ranging from “mega” halls, such as Mario Batali’s Eataly in Boston, Chicago and New York, to much smaller venues in aging strip malls, such as The Block in Annandale, Virginia, a suburb of Washington, D.C. — they all feature a mix of vendors offering high-quality artisanal food in a communal atmosphere.

Garrick Brown, vice president and head of retail research at Cushman & Wakefield, credits food halls’ explosive growth to the rise of “foodie culture” over the past 20 years and to the influence of millennial consumers. Brown explains, “For millennials, the emphasis is on authenticity. Processed foods are out; authentic and locally sourced foods are in.”

Click here to read the full article.

Posted on August 21, 2017

By: Hazel Garcia

STEM careers, also known as careers involving Science, Technology, Engineering, and Math, are some of the best paying jobs available. Requiring only a Bachelor’s degree for most for most of them, they are one of the better education bargains as well. The high pay that comes with these jobs combined with the smaller amount of education required helps minimize student loan debt as well, which leads to a better quality of life.

In the past couple of decades, more women are entering STEM programs to get the education required for these high-paying positions. While the number of women entering STEM programs has grown considerably, it’s still a male-dominated industry. Depending on which state you live in, there might as many as 4.5 times more men working in STEM than women.

Posted on August 17, 2017

The co-founder of one of the nation's first funds to provide real estate acquisition and private debt servicing to cannabis-related ventures spoke at I.CON '17: Trends and Forecasts in June. Access the presentation and session recording on the marijuana market as it relates to industrial space, risks to landlords, structuring leases with marijuana tenants and more on the conference resources page. 

Read More

Posted on August 17, 2017

Business North Carolina is seeking nominations for its annual Building North Carolina awards, which will be featured in their November issue. Submit your suggestions on the most important commercial real-estate projects completed in the state between July 1, 2016 and June 30, 2017 and the developer who has had the biggest impact on the industry.

Building North Carolina winners will be selected based on design, innovation and community impact in such categories as best public project, commercial project, renovation, and overall design. Submitted projects will also be considered for a Carolinas AGC 2017 Pinnacle Award, bestowed at its annual convention in January.

Entries should be submitted no later than Aug. 22. 

Posted August 15, 2017

Loan originations for commercial and multifamily properties in the second quarter of 2017 jumped 20 percent from the second quarter of 2016, according to data from the Mortgage Bankers Association. Such loan originations were 28 percent higher than in the first quarter of the year.

“The second quarter saw a 91 percent year-over-year increase in the dollar volume of loans for industrial properties, a 33 percent increase for office properties, a 21 percent increase for multifamily properties, a 14 percent increase for hotel properties, a 7 percent increase in health care property loans, and a 9 percent decrease in retail property loans,” MBA reports.

It finds that the jump in loan originations comes despite a slowdown in the volume of sales transactions.