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Biden and Commercial Real Estate: 4 Intersections to Watch

Originally published on November 9, 2020, by Tom Acitelli for the Commercial Observer.

The incoming Biden administration‘s decisions on a range of issues could impact the commercial real estate market and industry directly. Here are the four areas to watch as the former vice president transitions to the presidency this winter.

The pandemic

The coronavirus pandemic is by far the biggest challenge that commercial real estate faces. The virus has emptied offices and hotelscaused a spike in loan delinquencies and a drop in real estate investment trusts’ stock performancestanked leasing and sales; and banged perhaps the loudest death knell yet for brick-and-mortar retail. Until the coronavirus is under control, industry analysts, owners and brokers say a return to (a new) normalcy in the market and the industry is out of the question.

President-elect Biden is vowing a much more direct federal attack on the virus. President Trump in the closing days of his campaign said repeatedly that the nation was “rounding the turn” on the pandemic. The country has instead recorded more than 90,000 new coronavirus cases a day since Nov. 4, the highest figures of the pandemic.

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Analyzing the Current and Future Impacts of COVID-19 on CRE

Originally published on November 16, 2020, by Linda Strowbridge for NAIOP's Blog

In “Midyear Economic Impacts of COVID-19 on the U.S. Commercial Real Estate Development,” commissioned by the NAIOP Research Foundation, Stephen S. Fuller, Ph.D., professor emeritus at George Mason University’s Schar School of Policy and Government, detailed changes in different commercial real estate sectors and described how CRE could drive the recovery of the U.S. economy.

We asked him for further insights on what the government could do to facilitate growth in commercial real estate and what factors could influence the pace and strength of the recovery of the U.S. economy. 

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Construction Uncertainty Continues as Pandemic Persists

Originally published by Ken Simonson in NAIOP's Fall 2020 Issue.

The outlook remains hazy as COVID-19's broad impacts disrupt the country.

After more than six months of pandemic-related turmoil, there is no sign that the outlook is getting clearer for construction spending, labor, or materials cost and deliveries. Additionally, the back-pedaling in states that had reopened has made the uncertainty about the future even greater.

Like many sectors, construction experienced enormous upheavals in the spring. After employment reached a 13-year high of 7.6 million in February, the industry lost more than 1 million jobs during the next two months. The industry added back 611,000 jobs in May and June as construction firms made rapid use of Paycheck Protection Program loans to recall furloughed workers and restart projects in states and cities that ended shutdown orders. Despite the rebound, total construction employment in mid-June (the monthly employment counts are based on the payroll period covering the 12th of each month) was nearly half a million jobs shy of the February level.

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COVID-19 Challenges: Approaching a Mortgage Lender for Help

Originally published by Trey Barrineau on September 22, 2020  in tNAIOP Summer 2020 E-Newsletter.

The COVID-19 crisis shut down many businesses, reducing cash flows for building owners, and creating challenges in paying mortgages. Lenders are offering forbearance agreements and other loan modifications to borrowers so they can avoid defaults, but what is involved? Development magazine details important advice for borrowers who own buildings where tenants are in trouble.

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BREAKING: North Carolina Moves to Phase 2.5

Originally published in the Real Estate & Building Industry Coalition (REBIC) Newsletter on September 1, 2020.

North Carolina’s new ‘Phase 2.5’ starts Friday at 5 p.m.

  • Indoor fitness facilities and bowling alleys can open at 30% capacity
  • Museums can open at 50% capacity
  • Playgrounds allowed to open
  • Mass-gathering limits raised to 25 indoors, 50 outdoors

Places that still remain closed include:

  • movie theaters
  • night clubs
  • amusement parks
  • bars

The order announced today has no effect on restaurants, which are at 50% capacity, or schools, which are mostly online.

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Registration is Open! Post-Pandemic Economy Trends and Tangents is on October 20

Tracking Trends and Tangents as We Reimagine
Our Post-Pandemic Economy (and Lives)

Tuesday, October 20, 2020 | 9:00am - 10:00am


As COVID continues to take a toll on the world, come learn about real estate repurposing, relocating people and companies, reshoring, remote everything, robots, ROI, and rising risk during this virtual event on the state of the economy and gain insight into what it will now look like over the next couple of years. Submit questions in advance here.

Our Presenter

Ted Abarnathy PhotoTed Abernathy is the Managing Partner of Economic Leadership LLC, a consultancy that is currently working in more than a dozen states to develop economic and workforce strategies. Ted has 35 years of experience in directing economic development and workforce development programs. From 2008-2013, Ted was the Executive Director of the Southern Growth Policies Board, a 42-year old public policy think tank that provided economic development research, strategy, and marketing advice, to states and communities across the South. He also served as an economic development policy advisor to the Southern Governors Association. Read More.

Event Sponsor Opportunity

 
Increase your company visibility and bring more people! Receive five (5) registrations for $150 plus be recognized on the event webpage, on event email promotions, and during the event. Click here to confirm today!
 

Registration

 
Registration for members is $25 and $35 for non-members through October 15. Beginning October 16, the registration fee will increase to $35 for members and $45 for non-members. Prior registration is required. Zoom details will be sent 24 hours in advance of the event.
Click Here to Register

 

Questions

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

NAIOP August Coronavirus Impacts Survey Suggests Continued Gradual Improvement for CRE

Originally published by Shawn Moura Ph.D. on August 27, 2020.

Last week, NAIOP conducted its fifth monthly survey of its U.S. members on the impacts of COVID-19. Since April, the association has examined the pandemic’s effects on commercial real estate and how firms have responded. Respondents to the survey report continued, gradual improvement in rent collections, deal activity and conditions for ongoing development projects. However, their expectations for the duration of the pandemic remain virtually unchanged since July. 

The survey was completed by 210 NAIOP members between August 17-20, 2020. Respondents represent a range of professions, including developers, building owners, building managers, brokers, lenders and investors. 

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The Impact of COVID-19 on CRE Capital Markets

Originally published by Tejaswi Ponnada Parker on August 28, 2020.

The second-quarter contraction in commercial real estate (CRE) capital markets evokes memories of the significant liquidity and price discovery challenges encountered during the global financial crisis (GFC). However, the two crises share little else in common, at least up to this point. While the GFC indiscriminately impacted volumes and pricing across commercial property types as a result of the significant financial market stress, the impact of the pandemic on capital markets thus far has been more selective, widening the gulf between “winner” and “loser” property types. We begin with a brief overview and then dive into a cross-sectional and time-series comparison at the aggregate sector, sub-sector, and market level, in a bid to identify trends and understand investor risk sentiment.

Second-quarter 2020 volumes per Real Capital Analytics (RCA) reported the steepest year-over-year (YoY) decline in any single quarter since the GFC recovery. Over the last 10 years — the longest economic expansion in U.S. history — annual deal volumes steadily increased. They first peaked in 2015, a record year of deal-making for large-scale portfolio and entity-level transactions, before reaching an all-time high[1] of $592 billion in 2019. Transaction volume is often a barometer of liquidity in capital markets—and individual, portfolio and entity sales all reported a steep contraction in the second quarter this year. But how does liquidity today compare with that observed during the GFC, and more importantly, are these trends here to stay?

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Force Majeure During a Pandemic: What You Need to Know

Originally published by Grace Winters and Timi Anyon Hallem in NAIOP's Summer 2020 Issue

It’s crucial to review contracts during uncertain times.

As global markets, economies and governments marshal their resources to respond to the COVID-19 pandemic, real estate professionals must assess their options to address and absorb the impact. A critical and time-sensitive activity is analyzing the force majeure provisions in important agreements and preparing to make creative arguments to achieve the most favorable outcomes.

What is Force Majeure?

A well-written force majeure provision broadly excuses nonperformance of contractual obligations when there are unavoidable events outside the party’s control that were not reasonably foreseeable, either when the contract was written or in the exercise of due care. Typical clauses include “acts of God” (such as earthquakes, floods or other natural disasters), actions — or inactions (such as unanticipated governmental action, delay or restraint, terrorism and wars), and usually some version of a catch-all provision referring to “other events outside of the control of the parties.” Many force majeure provisions specifically exclude increases in the cost of labor, fuel or materials; labor shortages; economic hardship; and transportation delays, unless they are affecting a wide area beyond the property in question.

 

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US Federal Reserve Changes its Approach; New Reports on Climate Change and Opportunity Zones

Originally published in the NAIOP E-Newsletter on September 1, 2020 

The Federal Reserve last week announced it was ending its longstanding practice of preemptively hiking interest rates to stave off inflation. Chairman Jerome Powell said the central bank would instead focus on maintaining low levels of unemployment, even if it comes at the expense of higher prices for consumers. The Fed is expected to maintain its benchmark rate – which was cut twice back in March in response to the COVID-19 pandemic – at near-zero percent levels for the foreseeable future. 

Over on Capitol Hill, Senate Democrats are out with a new report. Called The Case for Climate Action, it recommends trillions of dollars in investments to cut greenhouse gas emissions and reach net-zero emissions by 2050. In terms of buildings in the commercial and industrial space, it highlights options for “decarbonizing everything,” but the plan is far less specific than the one released in July by House Democrats. Sen. Brian Schatz (D-HI), who chairs the select committee that published the paper, said many of the recommendations are intentionally open-ended in order to “maintain flexibility going into the next Congress.” 

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Golf Tournament Sponsorships are Going Fast! Sign Up Now

NAIOP Golf
 

Tournament Sponsorships Will Sell Out

Sign Up Today!


The always sold out industry golf tournament hosted by NAIOP Charlotte & CRCBR is happening this year! On September 28, get your company name in front of brokers and developers, and catch up (from a safe distance) with your industry peers. For one price, your company will be recognized as a sponsor during this two-flight tournament! Sponsorships are available on a first-come, first-served basis.
 
Please Note: Due to the ongoing health crisis we've had to adjust our program and there will be no player registrations included in this year's sponsorships. In addition, we reserve the right to make necessary changes to the tournament based on state, local and/or club COVID-19 restrictions & guidelines.
 
To become a sponsor click the button below and complete the form or call or email Lauren Simonetti at 704-377-8982 x103 or [email protected]cbr.org.

View Open Opportunities And Pricing Below!

 
Become A Sponsor
 

Note: NAIOP Charlotte Cornerstone Sponsors (Capstone & Archstone Levels) and CRCBR Alliance Sponsors (Chairman & Corporate Associate Levels) are confirmed as hole sponsors.

Questions about sponsorship?
Contact the NAIOP Charlotte office at 704-940-7383 or by e-mail at [email protected].

 


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NAIOP’s July Coronavirus Impacts Survey Results: CRE Continues to Recover

Originally published by Shawn Moura Ph.D. on August 3, 2020.

Last week, NAIOP conducted its fourth monthly survey of its U.S. members on the impacts of COVID-19. Since April, the association has examined the pandemic’s effects on conditions in commercial real estate and evaluates how firms have responded. The July survey results reveal that commercial real estate fundamentals are improving, but that the pandemic continues to impact development projects and appears likely to remain a significant challenge for longer than many had initially expected.

The survey was completed by 347 NAIOP members between July 15-20, 2020. Respondents represent a range of professions, including developers, building owners, building managers, brokers, lenders, and investors.

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Washington Responds to COVID-19

Originally published by Aquiles F. Suarez, Toby Burke , and Alex Ford for NAIOP's Summer 2020 Issue

Congress and the Federal Reserve took unprecedented action to shore up businesses, including commercial real estate.

As the COVID-19 pandemic began to shut down the economy, lawmakers in Washington responded, reaching agreements on several bills intended to help the country survive the economic chaos caused by the pandemic. Congress passed three relief bills in March, and the House passed a fourth bill in May that was headed for further negotiations with the Senate.

“Phase I” was H.R. 6074, the Coronavirus Preparedness and Response Supplemental Appropriations Act, signed March 6. It provided approximately $8 billion in additional funding to federal health agencies and eased regulations to allow for over-the-phone consultations between Medicare recipients and their health providers. The bill also empowered the Small Business Administration (SBA) to issue an Economic Injury Disaster Loan declaration, which makes loans of up to $2 million available to small businesses.

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Amazon Could Provide a Peek at Industrial’s Post-COVID Future

Originally published in NAIOP's Summer 2020 Issue by Ed Kimek, AIA, NCARB

The e-commerce giant understands how to connect products and consumers.

Commerce was changing before the outbreak of COVID-19, from the exponential trajectory of e-commerce, to the growth in consumer demand for more immediate goods, to the rise of urban industrial development to fulfill last-mile needs.

The unknowns of this novel virus have accelerated that change to a tipping point. The structures of commerce, and the development that supports it, may be altered for good. This crisis is proving the necessity of a resilient supply chain.

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Virtual Panel – Are Lenders Lending?

Join us on Monday, July 27th as we hear a panel of experts discuss the present state of lending from different lenders’ perspectives on the present commercial lending environment. Submit questions for the panel in advance here.

Panelists

Registration

Registration for members will be free and $15 for non-members through July 22. Beginning July 23, the registration fee will increase to $10 for members and $20 for non-members. Prior registration is required.

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Open For Business Directory

The City of Charlotte Small business network is more than 10,000 strong.

Add your small business to the Open for Business directory to have your information displayed on the Open for Business website and receive notifications when new access to capital opportunities and resources are available.

The Open for Business platform is a resource for Charlotte small business owners to help them withstand the impacts of the COVID-19 pandemic. By providing access to capital and other resources, the program is intended to help businesses survive the recovery phase of the pandemic and help prepare businesses to thrive in a post-pandemic future.

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Lawmakers Pass $1.5 Trillion Infrastructure Bill; PPP Deadline Extended

House lawmakers last week passed the INVEST in America Act (H.R. 2), a $1.5 trillion infrastructure bill that has been a key priority for Democrats since 2018. However, the bill advanced on a mostly party-line vote – with only a handful of members on either side breaking ranks – suggesting its prospects in the Republican-controlled Senate are likely dim. 

The chamber’s Majority Leader, Sen. Mitch McConnell (R-KY), later confirmed that sentiment, saying: “This so-called infrastructure bill would siphon billions in funding from actual infrastructure to funnel into climate change policies… It will just join the list of absurd House proposals that were only drawn up to show fealty to the radical left.” 

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Remote Work Is Here to Stay, But Office Footprints Likely Won't Shrink

Originally published on June 29, 2020 by Meredith Hobbs

The COVID-19 pandemic will set a “new normal” for the office workplace as companies adopt and integrate remote work practices deployed during the pandemic, according to a new report from Cushman & Wakefield. Consequently, it will morph from a single location to an “ecosystem of different locations and experiences.”

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One Month Left for Free CRE Courses

NAIOP is offering all on-demand courses absolutely free to all members through August 1. No code is required. Members can log in with their member ID to see complimentary pricing.

Please note: The ARGUS Software Certification (ASC) - Enterprise Bundle is excluded from this promotion.

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NAIOP June Coronavirus Impacts Survey Results

Originally published on June 23, 2020 by Shawn Moura Ph.D.

Last week, NAIOP conducted its third survey of its U.S. members on how the novel coronavirus has affected their businesses and local markets. The survey examines the outbreak’s effects on conditions in commercial real estate and evaluates how firms have responded. The June survey results reveal that development conditions have continued to improve since May.

For the first time, NAIOP is publishing data it has collected on rent payments and tenant requests for rent relief over the last three surveys. As with other metrics, these data reveal gradual improvement in market conditions since April.

The survey was completed by 351 NAIOP members between June 15 and 17, 2020. Respondents represent a range of professions, including developers, building owners, building managers, brokers, lenders and investors.

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