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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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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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Eight Crucial Post-Pandemic Takeaways for the Industry

Originally published by Ron Derven for NAIOP's Development Magazine Summer 2021 Issue.

The post-pandemic period could see a lot of innovation and experimentation in commercial real estate.

COVID-19 delivered a gut punch like no other to the commercial real estate industry last year, with transactions in the second quarter of 2020 plummeting approximately 40% over the same period in 2019.

By the fourth quarter of 2020, however, sales activity had nearly recovered, according to John Chang, director of research with Marcus & Millichap.

“Investors adapted to the new climate and devised new solutions to address the many obstacles to getting business done,” Chang said. “Barring a new, severe and deadly outbreak, COVID-related challenges ahead will likely be speed bumps for the commercial real estate industry rather than roadblocks.”

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5 Solutions for Building Office Interiors Through Supply Shortages, Price Volatility

Originally published on June 22, 2021 by Andy Halik for NAIOP E-Newsletter.

With U.S. coronavirus cases plunging and knowledge workers craving the social component of the workplace, many companies across the country are fully reopening their offices to employees. Some companies took the opportunity to renovate or update their workspace during the lockdown periods of the pandemic, and others are planning significant design changes to prepare for the next era of the office.

Meanwhile, the challenges of renovating or building out office interiors – or constructing ground-up office buildings – are only compounding as the desire to move forward on office projects butts up against unpredictable economic factors. Facing volatile materials prices, a tightening labor market, soaring demand and supply chain inefficiencies, real estate developers, owners, tenants and their builders must take action to mitigate the financial impacts and keep projects on track.

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When Office Real Estate Investors Can Expect a Turnaround

Originally published on June 21, 2021 by Marc Rapport for MillionAcres.com.

The pandemic recovery in the office sector is underway and is projected to reach positive net absorption in the fourth quarter of this year, according to research from NAIOP, the Commercial Real Estate Development Association.

 

That turning point will be followed by a return to more normal levels, predicts the report titled “Office Space Demand Forecast, Second Quarter 2021,” researched and written by professors Hany Guirguis of Manhattan College and Michael Seiler of William & Mary and the University of Cambridge.

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Key Takeaways from the Q2 2021 Office Space Demand Forecast

Originally published on May 2021 by Hany Guirguis, Ph.D., Manhattan College and Michael J. Seiler, DBA, William & Mary and the University of Cambridge.

Office Space Absorption Projected to Stabilize by Mid-2022

The U.S. economy is experiencing a strong rebound from the COVID-19-induced recession, resulting in job growth in office-using sectors. However, tenant-safety concerns remain a drag on office leasing. The U.S. office market posted continued declines in net absorption in the fourth quarter of 2020 (-26.7 million square feet) and the first quarter of 2021 (-34.8 million square feet). Nonetheless, as coronavirus safety concerns abate and the economy continues to expand, negative net absorption is forecast to moderate over the next two quarters, with a return to positive absorption in the fourth quarter of this year (Figure 1). Quarterly net absorption in 2022 is expected to average 11.7 million square feet, in line with the 2015-2019 quarterly average of 11.6 million square feet.

At the time of this writing, more than half of eligible Americans have received at least one dose of the COVID-19 vaccination, and more than one-third are fully vaccinated. As vaccination rates increase and new coronavirus cases decline, more employers are re-opening their offices. However, a widespread return to the office will likely depend on the return of K-12 schools to in-person instruction. Many schools currently rely on a full- or part-time remote schedule, requiring parents of young children to either stay home or seek alternative childcare arrangements. With vaccination rates on the rise, most schools are now planning to resume full in-person instruction in the fall. As safety concerns about returning to the office recede and schools reopen, office absorption should begin to respond to the current upswing in economic growth.

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Lessons in Mitigating Risk on a Megaproject

Originally published in NAIOP's Development Magazine Spring 2021 Issue by Ann Moore.

Waterfront development in California used multiple strategies to get off the ground.

Megaprojects can transform landscapes, improve quality of life and deliver significant economic benefits to their communities. When they are sited on a waterfront in a binational urban area, they take on even more complexity. In Southern California’s San Diego County, a megaproject will transform a formerly blighted stretch of waterfront into a thriving destination. The project team is pursuing innovative ways to reduce the risk that could be instructive to other development teams. 

A megaproject is defined by its scale and complexity. Typically costing $1 billion or more, such projects take many years to develop and build, involve multiple public and private stakeholders and impact millions of people, according to the Oxford Handbook of Megaproject Management. A considerable upside also brings great risk, which must be managed to improve the chances of success. 

On approximately 535 acres, the Chula Vista Bayfront is larger than Disneyland and one of the last significant large-scale waterfront development opportunities in Southern California. Once defined by a power plant and an aerospace factory, this brownfield waterfront is ripe for redevelopment in the U.S.-Mexico border region of 6.5 million people. The location is about a 15-minute drive from the busiest land border crossing in the western hemisphere. More than 100,000 people cross the San Diego-Tijuana, Mexico, border every day. Thus, the project site can target a market that includes U.S. citizens, Mexican nationals, and travelers using airports in San Diego and Tijuana. 

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Office Space Absorption Projected to Stabilize by Mid-2022

The NAIOP Research Foundation has published the NAIOP Office Space Demand Forecast for Q2 2021.

Key Takeaways:

  • Increasing COVID-19 vaccination rates and strong economic growth will help demand for office space rebound, with a return to a positive net absorption forecast for the fourth quarter of 2021.
     
  • Quarterly net absorption in 2022 is forecast to average 11.7 million square feet, in line with the 2015-2019 quarterly average of 11.6 million square feet.
     
  • Although tenants have begun to return to the office, it remains to be seen how widely they will adopt long-term remote work arrangements. Remote work will likely limit net absorption for the next several quarters.
     
  • Tenants may now prefer less dense office layouts than before the pandemic, partially offsetting declines in demand due to remote work.
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The Death and Life of the Central Business District

Originally published by Richard Florida for Bloomberg CityLab on May 14, 2021.

Just last spring, a chorus of pundits loudly proclaimed a sweeping urban exodus and the impending death of cities. Now, just slightly more than a year later, our cities are springing back to life. Sidewalks are starting to bustle; restaurants, which have spilled onto the streets, are teeming with patrons; museums and galleries are reopening; and fans are heading back to baseball parks, basketball arenas and even outdoor concert venues.

But one area of urban life where the pandemic is poised to leave a far bigger mark is on the places where we do business. The ongoing shift to remote work challenges the historic role of the Central Business Districts — neighborhoods like New York’s Midtown and Wall Street, Chicago’s Loop, or San Francisco’s Financial District — as the dominant centers for urban work. 

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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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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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Making the Office a Community-driven Workplace Destination

Originally published on March 26, 2021, by Cary Chandler and Ellen Lieder for NAIOP

Although the long-term impacts of the pandemic on the office environment are yet to be determined, many knowledge workers could eventually go back to the office. When workers return to urban office towers, they may anticipate an exceptional experience that delivers more than their home office could offer: a workplace destination that has community attractions they’ve craved over several months of remote work.

While in the short term, building owners are addressing immediate safety issues and protocols, the longer-term reality is looming. As a private, dedicated workspace has become a luxury rather than a given, the need to deliver more than places to perform tasks has become an imperative. The workplace must now deliver a first impression that will serve as an impetus for community building and shared purpose, productive individual spaces, and “third places” (neither home nor office) that support innovation and collaboration.

All of that might seem like a tall order, even for high-rise office buildings. Here are a few ways office building owners in downtown Chicago are reinventing their properties as urban workplace destinations.

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CLT Development Center Announces Digital Plan Room Launch and Training

Join the CLT Development Center for the launch of our new Digital Plan Room! 

The CLT Development Center has partnered with ePermitHub to launch the Digital Plan Room, a new electronic document review solution that is seamlessly integrated into the Accela Citizen Access environment. The Digital Plan Room is the next generation of electronic plan review. This solution will introduce many new features to optimize the plan review process, making it easier and faster for design professionals and plan reviewers to communicate so reviews can be approved faster with greater efficiency.

The Digital Plan Room system includes:

  • Simple file uploads and automated versioning at the sheet level
  • Collaborative issue/condition communication for plan review comments
  • Seamless user experience within Accela Citizen Access

Join the CLT Development Center for our virtual customer training session Friday, March 5th from 1:00 PM - 3:00 PM to learn more about the enhancements and latest features, ask questions and get answers. Cate Marshall, ePermitHub Project Manager will be moderating with a live demo/walkthrough conducted by our project consultant, Seth Axthelm. Those unable to attend the virtual training session will also be able to watch the session recording on our website!

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New Report: Overall Gains in Office Demand Following Short-term Challenges

Originally published on behalf of NAIOP Research Foundation on November 19, 2020. 

Negative Absorption of Office Space Expected to Continue in Short Term, Trend Positive Beginning Q2 2021

The NAIOP Research Foundation has published the NAIOP Office Space Demand Forecast for Q4 2020.

Key Takeaways:

  • Given the continued challenges facing the U.S. economy, office net absorption is forecast to be negative 18 million square feet in Q4 2020 and negative 10 million square feet in Q1 2021.
     
  • Growth in net absorption is forecast to resume in Q2 2021, and the total net absorption over the period from Q2 2021 to Q3 2022 will exceed negative absorption from the recession, resulting in overall gains in absorption over the next two years.
     
  • The largest office-using industries have been more insulated from the effects of the pandemic than the economy as a whole, but their shift to remote-work arrangements has diminished demand for office space.
     
  • Multiyear lease terms have mitigated the effects of reduced occupancy on vacancy rates, which have risen to 14% in the third quarter. Vacancy rates are likely to continue to rise through the end of 2020 as more leases come up for renewal.

 

View the full report.

NAIOP study examines how retail, office buildings will become part of the 'last mile'

Originally published by Marc Stiles on November 5, 2020, for Puget Sound Business Journal 

The tech-fueled evolution of industrial real estate is creating opportunities for underused assets, large and small. The possibilities seem almost endless.

 

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There's Opportunity at the Office Park

Originally published in NAIOP's Development Magazine Fall 2020 Issue by Ray Kimsey. 

COVID-19 could spur greater interest in transforming suburban office parks into mixed-use developments.

Suburban office parks were already experiencing a renaissance in the years leading up to the COVID-19 pandemic. A combination of rising commercial and residential rental rates in urban core areas and the desire of millennial workers to reduce their commutes had led real estate developers to transform older office parks into competitive properties by offering the right mix of uses and amenities.

The pandemic, which may have effectively reset corporate America’s work/life balance equation, has given new impetus to this strategy. Nearly a third of Americans are considering moving to less densely populated areas in the wake of the pandemic, according to recent data from a Harris Poll conducted among 2,050 U.S. adults from April 25-27. This could significantly impact the attitudes of both office tenants and residential buyers regarding location and amenities. It would also be happening as futurists predict a “new normal” following the pandemic where remote working could become more accepted. In addition, even when restrictions are lifted, there will be an emphasis on outdoor amenities that support social distancing. 

As commercial real estate leaders plan for the future, many are evaluating changing user preferences and are looking for creative solutions to meet the needs of changing demographic preferences. Here are some insights into reimagining aging office parks by realigning space and tenant engagement strategies through the introduction of residential and mixed-use elements.

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Apply for NAIOP’s National Forums Program

The National Forums program brings together industry professionals in select groups to share industry knowledge, develop successful business strategies and build strong relationships in a confidential and non-competitive setting. Learn more about this unique opportunity and apply for appointment today. 

The Forums provide a unique opportunity for members to openly discuss project challenges, business opportunities and lessons-learned in a confidential and non-competitive setting. Over time, fellow members become a trusted circle of advisors.

The National Forums are an excellent way to become involved, stay in touch and develop new connections with key industry leaders.

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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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Office Occupancy Varies Widely as Workers Trickle Back: Report

Having—for the most part—quickly sheltered in place in March and April, office workers across the U.S. are slowly venturing back to their workplaces, according to a new weekly report from Kastle Systems International.

The Kastle Back to Work Barometer is an average based on millions of aggregated, anonymous daily building access data points from Kastle-secured properties in 10 major metro areas: Austin, Chicago, Dallas, Houston, Los Angeles, New York, Philadelphia, San Francisco, San Jose and Washington. 

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Will Teleworking Change the Future of the Office?

The COVID-19 pandemic might not have a massive economic effect on the office sector, but it could spark big new ideas on the use of space.

The office sector appears to be less vulnerable to disruptions associated with the coronavirus pandemic than retail or hospitality, but it’s not entirely immune to an economic downturn — or the acceleration of changes in the ways people have been working  during the crisis.

Mandatory closures and other social distancing measures have taken a toll on firms that are closely tied to the consumer economy, such as the British airline Flybe, which went bankrupt in March after travel bookings plummeted in the wake of the coronavirus pandemic. Businesses that cannot conduct most of their business remotely are also in peril. On the other hand, many companies have learned that they can run their operations without anyone physically in the office, a trend that has the potential to depress demand for traditional office leases.

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