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Colorado Energy Benchmarking Statute a Poor Solution

Originally published on April 20, 2021, by Erin Goff for NAIOP.

Colorado legislators are poised to introduce what is being referred to by proponents as the “Energy Performance in Buildings Act of 2021.” The draft bill, which mandates energy benchmarking and performance standards, requires owners of most commercial, multifamily and public buildings over 50,000 square feet to collect and report the building’s energy use to the Colorado Energy Office (CEO). The building will then be given an Energy Star score compared to other buildings. By 2026, owners of buildings that do not meet a certain score must make improvements that lead to a 15-point Energy Star score increase, a 15% energy use intensity reduction, or other options. Failure to reach energy reduction mandates will result in hefty civil penalties for commercial and multifamily building owners. Buildings exempt from the penalty provision include buildings owned by the state, municipalities, counties, special districts, school districts and state institutions of higher education.

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How Custom Workplace Design can Improve Employee Health and Wellness

Originally published on April 13, 2021, by Roger Heerema and Dan Elkins for NAIOP.

Effective workplace design has never been about simply making an office look nice; it’s about supporting and inspiring those who will move within and around it. Now, a historic pandemic is highlighting a new opportunity for flourishing companies whose space needs have changed: To invest in build- or redevelop-to-suit design projects that enable them to manage the health and wellness aspects of their space – during a time when both are paramount.

The ability to choose building specifications inherently gives companies greater control over features like advanced air circulation and touchless doors. By investing in these and other health and wellness elements, companies can help meet long-term disease containment goals as well as show they value their employees.

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Tax Increases Accompany Biden American Families Plan

Originally published on May 4, 2021, for NAIOP.

Last week President Joe Biden unveiled his American Families Plan to provide universal preschool, two years of free community college and a paid family and medical leave program, and to expand the Earned Income Tax Credit and other tax credits. The plan, estimated to cost $1.8 trillion, would be financed primarily through tax increases on investments and high-income earners. Many of the tax increases affect provisions important to commercial real estate.

 

View Biden Plan Tax Proposal

Are Zoom Towns the New Boomtowns?

Originally published on April 29, 2021, by Kathryn Hamilton for NAIOP.

Thinking of packing suitcase, grabbing your laptop and setting up shop in a new locale? You’re in good company! One-fifth of adults in the U.S. moved during COVID-19 or know someone who did, says Pew Research, whether for health and safety reasons, or simply because the space demands of full-time work from home increased the urgency for more square footage.

Since the onset of the pandemic, countless office workers have fled crowded apartments in the urban core and are spreading out in more remote, spacious locations dubbed “Zoom towns.”

These hot spots have some things in common: roomy homes and yards, lower costs of living, and proximity to outdoor activities, like hiking trails or the waterfront. Ownerly published a list of top Zoom towns, and some cities are offering incentive programs to attract remote workers:

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Congratulations to our Spring Golf Winners!


The Data Center Construction Pipeline Keeps Growing

Originally published on April 19, 2021 by Eric Butterman for WealthManagement.com.

Even amid a pandemic, the construction pipeline for data centers in the U.S. has kept growing. While in 2019, 4.92 million Rentable Building Area (RBA) sq. ft. of data centers were built and renovated, according to CoStar Advisory Service, last year the figure rose to 6.78 RBA million sq. ft. The planned pipeline for 2021 is now at 7.66 million RBA sq. ft. The CoStar data “largely includes properties under construction, but maybe missing renovations of existing space as research continues to investigate these,” notes Juan Arias, senior consultant with the CoStar Group.

There were some initial hiccups in construction plans as the pandemic took hold last year. For example, Facebook went from spending well north of $10 billion on data center construction in 2019 to announcing a delay in data center expansion in March of 2020. By September, however, it revealed a planned $1.5 million sq. ft. expansion of a data center in Georgia, as it became clear that home-bound consumers were contributing to a significant uptick in data storage needs. Facebook’s expansion deal was one of many similar announcements made in the data center space starting in the second quarter of 2020. Even Goldman Sachs got into the act by announcing in October a $500 million investment in a global data center platform.

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Investors Jump Into Proptech Designed To Make Buildings Greener

Originally published on April 19, 2021, by Larry Getlen for CommercialObserver.com.

Clockworks Analytics makes building software that, among other benefits, helps to build owners optimize energy performance and improve indoor air quality.

It’s little surprise, then, that for Clockworks, like for many other product makers in the environmental prop-tech space, business is booming.

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The Post-pandemic Career Shuffle

Originally published on April 15, 2021 by Kathryn Hamilton for NAIOP.com.

Employees – office workers, in particular – have firm expectations about returning to the workplace as vaccines become more widely available and companies begin bringing the team back together. At the top of their wish lists: hybrid work schedules, says start-up workforce platform Envoy’s Return to the Workplace report.

Safety and flexibility, says the report, are the top two reasons behind the desired hybrid model, with office workers pinpointing the ideal number of days at their worksites to 3.3 per week. And it’s not just office workers, says Human Resource Executive. The appeal of a hybrid schedule is increasing in health care, construction/manufacturing, retail and hospitality fields as well.

The split workplace schedule is so desired by employees that many say they are willing to change jobs – even careers – to make it a reality.  

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A few spots left! Spring Social is this Thursday

A few spots are still available to attend the Spring Social at The Olde Mecklenburg Brewery! We will be gathering in an outdoor space and request that each attendee self-certifies they are symptom-free and sign a waiver in advance. This is a NAIOP Charlotte Member Only Event.

Registration
Registration is $15 for members. 

Register Here

Location
This event will be held at The Olde Mecklenburg Brewery 4150 Yancey Road, Charlotte, NC 28217.

Questions
If you have questions, please contact the NAIOP Charlotte office at [email protected]

Measuring the Impact of Smart Building Technology Investments

Originally published by Marta Soncodi for NAIOP's Spring 2021 Issue.

A new ratings system quantifies how effective they are across several important criteria. 

Investing in smart building technology may not be seen as a priority after commercial real estate investments were hit especially hard in 2020. However, if improving tenant experience was being considered before the pandemic, it’s now an imperative.

Why should commercial real estate owners consider investing in smart building technology upgrades? Based on research and industry analysis, fully integrated smart systems can increase building efficiency, optimize facility operations, improve occupant safety, security and wellbeing, and enhance end-user preferences. And, in light of the pandemic, stakeholders — commercial real estate companies, building owners, managers, and tenants — should examine the competitive advantages of smart building technology. 

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A New Life for an Old Department Store

Originally published by Brent Carroll for NAIOP's Spring 2021 Issue.

An adaptive reuse project revitalizes an iconic retail tower in Portland, Oregon.

For residents of a certain age in Portland, Oregon, the phrase “meet me under the clock” meant the clock on the main floor of the Meier & Frank department store, which first opened nearly 150 years ago. The 16-story terracotta landmark building at 555 Southwest Morrison Street encompasses an entire city block near Pioneer Courthouse Square, widely known as “Portland’s living room.”

In November 2016, a new era for the Meier & Frank Building began when KBS purchased the asset for $54 million in a joint venture with private development firm Sterling Bay with the intent of repositioning the property. Converting part of a beloved former department store into a fully leased Class A mixed-use space while preserving the historical integrity of the original property required hard work as well as some creative problem-solving. 

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A New Asset Class: The Future Hybrid Store

Originally published on April 9, 2021 by Brielle Scott for NAIOP Blog.

The disruption caused by COVID-19 has accelerated the blending of brick-and-mortar retail and logistics real estate. This has resulted in the emergence of a new hybrid store model – one that takes omnichannel strategies to the next level and promises to revolutionize the retail, industrial and logistics industries. 

In a recent NAIOP webinar, John Morris, head of industrial and retail, CBRE, and Andres Rodriquez, senior research analyst, CBRE, shared their vision for a hybrid store that preserves the store experience for physical shopping while leveraging logistics capabilities for the fulfillment of online sales. 

Rodriquez started the discussion by sharing some historical data. According to data between 2010-2019, prior to the COVID-19 pandemic, online retail sales were growing about 16% per year, while in-store retail sales were growing about 3% per year. In response to that, retailers had been focusing heavily on rolling out their online platforms to meet consumer demand. 

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How Has COVID-19 Accelerated Dining Trends?

Originally published by Gary Tasman on March 30, 2021, for NAIOP.com.

If nothing else, 2020 taught us that we can all adapt to changing conditions and learn how to navigate through radical shifts in how we function day-to-day. This is the case not only for individuals and families but also for businesses. Millions of business owners and managers were forced to radically reinvent their business models to remain solvent during the COVID-19 crisis. This is especially true of the restaurant industry, which is rapidly accelerating new and pre-existing trends.

Stay-at-home regulations, social distancing, and public apprehension have forced restaurants to shift their models significantly to focus on delivery and carry-out to stay profitable. Fortunately for many establishments, this quick-service restaurant trend had already emerged pre-pandemic. Restaurants that had already embraced this shift were better positioned to weather the storm produced by COVID-19.

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Public Meetings for 1-77 Corridor Project are on April 21 and May 13

In January 2020, representatives from the Charlotte Regional Transportation Planning Organization (CRTPO) publicly launched Beyond 77, a project focused on improving travel along the I-77 Corridor from Statesville, N.C. to Rock Hill, S.C. To date, over 19,000 surveys have been completed in an effort to prioritize transportation alternatives for the area. In early April, the third and final public engagement phase kicked off, where participants are asked to weigh in on potential solutions. Residents who live, work or travel through this region are encouraged to participate in the study by visiting Beyond77.com and taking a brief survey.

For those who want to hear directly from the planning team, representatives from the Beyond 77 study will be hosting two Virtual Public Meetings on April 21 and May 13 from noon to 1 p.m.

To learn more about the public meetings and to register, visit Beyond77.com/Register.

Biden Unveils $2.3 Trillion Infrastructure Proposal

Originally published on April 6, 2021, for NAIOP Source E-Newsletter.

President Joe Biden has unveiled his American Jobs Plan, a $2.3 trillion plan to fund infrastructure projects such as roads, bridges and railways, but also what the administration terms “human infrastructure” investments in childcare, as well as measures to transform the energy sector toward a carbon-free future. In order to fund the plan, the Biden administration proposes to raise the corporate tax rate from the current 21% to 28% and would seek a global minimum tax for multinational corporations.

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Council Delays Vote on 2040 Plan | Time to Speak Out

Thank you to our many members who showed up to speak at the virtual public hearing on the draft Charlotte Future 2040 Plan. Mayor Lyles announced that the vote will be pushed to June 28,2021 to allow for more public input. We look forward to continuing to work with members of City Council and planning staff to assist in completion of the plan.

As part of the continued request for public input, the City of Charlotte has scheduled the first three virtual town halls.

Thursday, April 8 at 5:30 PM – Hosted by Council Member Malcolm Graham

Topic: Anti-Displacement in Vulnerable Neighborhoods (Creating Great Neighborhoods)

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The Vaccines are Here. What Happens Next?

Originally published  by Trey Barrineau for NAIOP Spring 2021 Issue

The rollout of immunizations to defeat COVID-19 has enormous implications for the commercial real estate industry.

In late 2020, the U.S. and other countries began distributing vaccines to control the COVID-19 pandemic. It is the single most important development in the year-long fight against the disease, which has killed and sickened millions around the world and crippled the global economy.

The stakes are high. The vaccines will not only save lives and boost the morale of hundreds of millions who have been forced to live constrained lives due to lockdowns and other public health measures; experts say they are also the most important factor in the overall economic recovery from the pandemic. The commercial real estate industry has been hit hard by the pandemic, particularly the retail, office, and lodging sectors.

“If we get 70% to 85% of the country vaccinated by the end of the summer, I believe by the time we get to the fall, we will be approaching a degree of normality,” Dr. Anthony Fauci, the chief medical advisor to President Biden, said in late January. “It’s not going to be perfectly normal, but one that I think will take a lot of pressure off the American public.”

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New Report: Emerging Construction Technologies

Originally published by Andrew McCoy, Ph.D., and Amin Yeganeh, Ph.D. in March 2021 for NAIOP's Research Foundation.

The construction industry has historically been slow to develop or adopt new technologies, resulting in productivity growth that has lagged other sectors. However, protracted labor shortages have increased demand for labor and time-saving technologies, and recent advances have given rise to a new generation of more efficient, flexible and adaptive construction technologies. Successfully adopting these new technologies will require that firms evaluate their costs, benefits and risks and update construction practices as needed.

The NAIOP Research Foundation commissioned this report to explore emerging construction technologies and their implications for the construction and real estate development industries. The authors draw from interviews with researchers and industry practitioners to evaluate the current benefits and limitations of new technologies. This report:

  • Profiles technologies that are rapidly being deployed in construction projects and those that are likely to be adopted by the industry in the coming years.
  • Examines how technologies have the potential to transform construction practices and disrupt traditional business models.
  • Outlines best practices for firms to prepare for and adapt to new technologies.
Download Report

New Report: Emerging Construction Technologies

Originally published by Andrew McCoy, Ph.D., and Amin Yeganeh, Ph.D. in March 2021 for NAIOP's Research Foundation.

The construction industry has historically been slow to develop or adopt new technologies, resulting in productivity growth that has lagged other sectors. However, protracted labor shortages have increased demand for labor and time-saving technologies, and recent advances have given rise to a new generation of more efficient, flexible and adaptive construction technologies. Successfully adopting these new technologies will require that firms evaluate their costs, benefits and risks and update construction practices as needed.

The NAIOP Research Foundation commissioned this report to explore emerging construction technologies and their implications for the construction and real estate development industries. The authors draw from interviews with researchers and industry practitioners to evaluate the current benefits and limitations of new technologies. This report:

  • Profiles technologies that are rapidly being deployed in construction projects and those that are likely to be adopted by the industry in the coming years.
  • Examines how technologies have the potential to transform construction practices and disrupt traditional business models.
  • Outlines best practices for firms to prepare for and adapt to new technologies.
Download Report

Up to $28B in Distressed Retail Could Hit the Market in the Next 24 Months

As the U.S. enters year two of the COVID-19 pandemic, strip centers and malls, which have had most of the exposure to retail tenants that have struggled from a sales perspective, stand at the greatest chance of experiencing property-level distress in the months to come, according to Kevin Cody, the senior consultant at real estate data firm CoStar Advisory Services.

CoStar expects the average vacancy rate for malls across the country to climb by around 3.1 percentage points between the fourth quarter of 2019 and the fourth quarter of 2021, Cody notes. At the same time, the vacancy rate for neighborhood shopping centers and freestanding retail will likely climb by only 1.3 percentage points and 0.4 percentage points, respectively.

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