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AI Applications in the Built Environment

Originally published on October 20, 2023, by Pamela Jew for NAIOP.

With ChatGPT suddenly mainstream, artificial intelligence has become a hot topic with the ability to disrupt any and every industry it touches. The commercial real estate industry is not excluded from this disruption, but the implementation of AI in the space leaves a lot yet to be discovered.

At NAIOP’s CRE.Converge conference this week, industry professionals discussed how AI is evolving and how it can change the commercial real estate industry. Ajey Kaushal, senior investment associate, JLL Spark Global Ventures led a conversation with Todd Huebsch, vice president, Yardi Systems Inc., David Knight, chief architect, Dealpath, and Olivier Maene, global product director, Avison Young. 

To begin, each panelist provided an overview of how their respective companies deploy AI. Huebech presented different AI solutions from Yardi, the largest software developer specializing in real estate, that it has already rolled out in 2023: chatbots, work orders, smart key and an assistant. Knight said Dealpath is questioning how much agency we give AI, and that the software company still believes in human decision-making for key decisions.

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High-tech Solutions to Keeping Chocolates Cool at an Atlanta Cold Storage Facility

Originally published on October 16, 2023, by Kathryn Hamilton, CAE for NAIOP.

A 1.5 million-square-foot cold storage facility an hour south of Atlanta sits unassumingly among farmlands and other distribution warehouse facilities containing everything from mattresses to salad dressing to office supplies. Inside its doors though, racks and rows of premium chocolates are stacked high in an international chocolate producer’s distribution facility for the Southwest.

Built by Alston Construction and operated by Geodis, the facility began as a pilot project and was leased early on by the chocolate company, which gave the company the ability to do some customization during development. Completed in 2018, the tilt panel building is insulated with 4” insulated metal panels, along with insulated overhead doors with food grade seals. It has a 60-mil thermoplastic polyolefin (TPO) roof membrane over LTTR-28 (long-term thermal resistance) insulation, with all gaps filled with closed cell spray foam.

Of the total facility, 750,000 square feet is cooled to 55 degrees, and another 150,000 square feet is lowered to a chilly 42 degrees in what’s called the “5C room,” which houses one of the other brands of the chocolate producer that is required to be stored at lower temperatures.

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The Future of Electric Vehicle Charging: A Guide for Commercial Real Estate Developers

Originally published on July 27, 2023, by Trey Barrineau for NAIOP.

Electric vehicle (EV) use is accelerating, and commercial real estate owners can reap significant benefits from installing EV charging infrastructure at their properties. A recent NAIOP webinar explained how EV charging station implementation can attract and retain tenants, improve the property’s environmental score and generate new revenue streams.

According to Bryce Christensen, P.E., a senior partner with Kimley-Horn, EVs are becoming more affordable. Of the more than 40 options currently on the market, he said that 10 now cost under $40,000, and nearly every major automaker made public commitments to EVs, which should boost adoption by helping bring prices down even more.

“It’s no secret that the market share of electric vehicles in the United States and worldwide is trending up,” Bryce said. “The demand is rising, and many potential consumers are just waiting for more charging infrastructure before committing to going all electric.”

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Leveraging Data Science and AI in CRE Investment Strategies

Originally published on June 9, 2023, by Natalie Fidlow, CFA for NAIOP.

“[Artificial Intelligence] won’t replace real estate people. AI will replace real estate people who don’t have AI,” said Itay Ron, senior president of Northeast markets at Faropoint at the I.CON East conference this week in Jersey City, New Jersey. “Right now, we are reaching an inflection point where you can easily use data for commercial real estate,” Ron continued, discussing the state of artificial intelligence technology and how commercial real estate professionals can utilize AI in their investments. 

AI in the Spotlight

Earlier this year, Microsoft-backed Open AI released ChatGPT to the public. This tool, which can create human-like text, showed the world the robust application of generative AI, but it’s not new. “AI has been used behind the scenes for many years.  That release set off the arms race of AI between Microsoft and Google,” said Ron. And over the last year, you can see the impact of utilizing AI. News outlets and written content creators are being materially disrupted. For example, BuzzFeed, CNet and Insider are all news outlets decreasing their workforces by at least 10% and using AI to create news stories.

Insurance is another industry that is ripe for disruption, according to Ron. The industry is beginning to utilize active insurance; sensors on wearables will send your data to underwrite your health insurance policy. Sensors on your car will do the same for your auto. “By 2025, more than one million devices will be connected to sending data within insurance.”

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The Logistics Building of the Future

Originally published on June 8, 2023 by Brielle Scott for NAIOP.

At NAIOP’s I.CON East: The Industrial Conference today, attendees explored the logistics building of the future, as designed and imagined by Matt Brady, LEED AP, architect and executive vice president, and the team at Ware Malcomb.

“The challenge we’re trying to solve with the logistics building is primarily the speed to customers,” Brady said. Getting closer to the consumer requires in many cases that companies locate in more dense urban sites. And typically, the size of those sites is limited – “you can’t just go and take down 20 acres in an urban environment, and it’s extremely expensive.”

“We have challenged ourselves to think creatively if we’re going to meet the needs of occupiers as those needs evolve, and that’s what this whole exercise is about: designing the logistics building of the future.”

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California’s Title 24 Introduces New Solar Requirements for CRE

Originally published on May 11, 2023, by Brielle Scott for NAIOP.

California’s Title 24, the state’s energy code, has required solar for all low-rise multifamily projects since 2016, but new provisions have gone into effect this year, impacting any projects permitted since Jan. 1, 2023.

To help navigate the regulatory landscape and explain how solar and energy storage can benefit building owners and developers, Rachel McCafferty, director of business development for CalSolar Inc., shared her expertise during a NAIOP webinar on the topic.

“The solar requirement has been extended to not just multifamily projects but to all commercial and industrial new construction in California,” McCafferty explained.

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Cutting-edge Manufacturing Facilities Offer Glimpses of the Future

Originally published by Marie Ruff for NAIOP E-Newsletter.

The next phase of advanced manufacturing innovation is ready for launch in the Long Beach region of California. Attendees of NAIOP’s I.CON West were able to go behind the scenes on a project tour of cutting-edge advanced manufacturing facilities in Douglas Park, an industrial, retail and hotel center that spans more than 260 acres adjacent to the Long Beach Airport.

Morf3D: Advancing Aerospace with Additive Manufacturing

The first stop on the tour: Morf3D, a company that primarily serves clients in the aerospace, space and defense industries. These industries require highly specialized equipment that meets stringent specifications including being durable, lightweight and thermal-resistant, which Morf3D achieves using metal additive engineering and manufacturing.

The 90,000-square-foot Douglas Park building was a spec building that Morf3D has been adapting to suit the varying needs of their clients, from security clearance requirements to power needs. Some tenants require temperature control within four degrees to keep the equipment running smoothly and prevent any quality concerns with the products; others require the temperature to not vary more than two degrees.

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Mitigating Environmental Risks in Life Science Leases

Dangerous chemicals and infectious diseases are among the many hazardous materials that are handled inside life science facilities. Getty Images
By Michael Pollack

A lot of hazardous material passes through these facilities, so caution is necessary.

Life science industries span a range of uses — clinical research and trials; biologics; medical devices; pharmaceuticals; vaccines research, development, manufacturing, and distribution; plant and animal technology; and veterinary products, to name just a few. Leases for life science facilities can present unique challenges and considerations for building owners. Besides the particular demands life science uses place on electrical capacity, HVAC, floor loads, and waste removal, the activities within these facilities can pose many other risks.

Inherent in many life science facilities is the utilization, storage, and/or distribution of hazardous or toxic materials under applicable environmental laws. Of course, most common leases will contain standard indemnification clauses allocating responsibility to the tenant for losses resulting from its activities. 

When it comes to environmental issues, though, there are unique concerns for owners of life science properties. These include the ecological indemnity the principal owners provide to their lender (which typically comes from a well-funded source other than the property owner). There’s also the strict liability imposed under federal law on anyone in the chain of title for additional cleanup costs, whether or not they caused the contamination. 

Also, another lingering fact involves the owner would typically only have recourse from the tenant for a breach of the lease’s environmental restrictions.

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Industrial Space Demand Forecast, Third Quarter 2022

NAIOP research

By: Hany Guirguis, Ph.D., Manhattan College and Michael J. Seiler, DBA, William & Mary

Amid lower pressure on global supply chains, increasing inventory carrying costs, a cooling economy and a decrease in the rate of e-commerce expansion, retailers and logistics firms have slowed the rate at which they acquired additional industrial space this year. Net absorption of industrial space in the first two quarters of 2022 was 151.2 million square feet, down sharply from 2021’s record pace but still notably higher than in prior years (see Figure 2). The authors expect the still-hot industrial market to cool, and they forecast that the net absorption rate will continue to decline until it returns to the pre-pandemic trend. Total net absorption of industrial space in the second half of 2022 is forecast to be 112.4 million square feet, and full-year absorption in 2023 is forecast to be 209.4 million square feet (see Figure 1 for quarterly projections).

The Industrial Market

Supply chain congestion eased during the first half of 2022, as illustrated by the decline in the Federal Reserve Bank of New York’s Global Supply Chain Pressure Index from 4.35 in December 2021 to 2.41 in June 2022. As a result, retailers and logistics firms have shown less interest in leasing or buying industrial space before it is needed, a trend that contributed to higher absorption in 2021. Amazon’s decision to substantially scale back its expansion plans is the most prominent example of this shift in demand for industrial space. Nonetheless, smaller e-commerce firms, and even traditional retailers, continue to lease more distribution space despite slowing e-commerce growth as more consumers return to shopping at bricks-and-mortar retail. Industrial vacancy rates remain historically low as the ability to supply new space continues to face physical and political limitations in land-constrained markets. These low vacancy rates continue to cause asking rents, and ultimately transaction prices, to increase. Premium prices are being paid for properties with soon-to-expire leases and even vacancies as they allow owners to lease out more space at record-high market rates.

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The Unexpected Challenges (and Solutions) of Multilevel Warehouse Design

Costco
  • By Russ Hazzard, Jonathan Chang, Development Magazine (photo of Vancouver, B.C. Costco by Raef Grohne)

Experiences in Canada and Asia provide case studies for building these complex properties.

Over the past 15 years, multilevel warehouses — particularly those used for retail purposes — have been a growing trend across Asia and, more recently, in the United States. However, some challenges accompany their design and construction that are not encountered in the traditional approach to large-format retail. With operational criteria at the top of the list, these challenges vary heavily based on several factors, including location, footprint, environment, jurisdictional requirements, and cultural and community influences.

The increase in demand for and construction of multilevel warehouses has unearthed numerous unique considerations not present in traditional warehouse environments. These challenges — each intricate in their own right — have required creative solutions and careful programming to successfully bring each project to life.

Parking and Vehicle Flow

One of the most critical design challenges for vertical warehouses is the traffic flow of vehicles and the structure’s parking. While the goal is to keep the sales level on a single floor for ease of operations and the consumer’s shopping experience, parking for multilevel warehouses can reside either above or below grade. Both options have pros and cons: Below-grade parking requires excavation, which can increase costs and complications. However, it provides a solution for lot coverage or height restrictions in situations where those apply. Above-grade or rooftop parking is preferred as it saves both construction time and money.

Customized resolutions to optimize vehicle traffic flow and increase ease of parking have also been employed, varying from warehouse to country to country. For example, in Sinjhuang, Taiwan, indication lights for open parking spaces are used to determine capacity at a glance. In Suzhou, China, car ramps at the entrance steer customers directly up to each floor, allowing them to bypass complete levels. Larger-than-regulation parking spaces — typically very compact in Asia — are also used, granting customers peace of mind. There is no need to worry about maneuvering around tightly packed vehicles in the garage. As an added benefit, large spaces also increase vehicle flow; running in and out of an area is completed in one move vs. two or three.

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RECAP – Industry Forum: Charlotte’s UDO and Next Steps

UDO dom photo

June 23, 2022:  More than 100 commercial real estate professionals registered to hear a panel of local industry professionals share their feedback on the latest draft of Charlotte’s Unified Development Ordinance (UDO). Roger Manley (BB+M Architecture), Jon Morris (Beacon Partners), Tim Sittema (Crosland Southeast) and moderator Rob Nanfelt (REBIC) discussed their participation and impacts the new ordinance will have on the future of commercial real estate development.

Some of the highlights included:

Affordability after the UDO's implementation.  Yes, development and housing costs will go up. But the new draft should offer more flexibility.

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2040 Planning Academy Starting Tuesday, June 21

2040 Planning Academy

2040 Planning Academy Starting Tuesday, June 21

Do you have questions about all the development you see in CLT? Do you want to know more about how CLT plans for its future? Are you interested in influencing the future of your neighborhood?

The 2040 Planning Academy, formerly the Community Planning Academy, is a free 5-class program aimed at helping residents better understand the role planning plays in building communities. Through group discussions, presentations, and interactive activities, participants will learn when and how they can be involved in planning processes and help influence the future of their community.

The application window is open starting today, Tuesday, June 21, 2022, and will close on Sunday, July 17, 2022, at midnight.

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A Compelling Argument for More Solar in CRE

 

originally published by BRIELLE SCOTT for NAIOP National with permission to share

Solar

Environmental, Social, and Governance mandates (ESG) are becoming a reality not only in large enterprise businesses but also in their entire supply chains. Forces from upstream as well as downstream, combined with pressure from stockholders, stakeholders, employees, and customers, are ushering in a new era where ESG practices are no longer considered optional.

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Could Your Building Help Meet the Soaring Demand for Lab Space?

 

originally published by JEFF JANICEK AND JASON UTAH for NAIOP National with permission to repost. 

Lab Pic

Lab sciences are one of the most talked-about sectors in real estate right now – but how can a traditional office building owner court these companies as tenants? By understanding what lab sciences leaders look for in potential lab and office space, commercial real estate owners can determine whether their buildings might be prime candidates for this dynamic market.

Read the Full Article!

Driverless Delivery Trucks Coming to a Road Near You

 

originally published by KATHRYN HAMILTON, CAE for NAIOP National

Driverless Car

On a seven-mile stretch of Arkansas roads this fall, retail giant and tech innovator Walmart began testing a new type of delivery truck: autonomous vehicles running a loop route that requires the truck to navigate intersections, obey traffic lights and merge on dense roadways. Notably missing? A driver. These trucks are the first ever on the roads without a safety driver.

Read the Full Article Here!

Digital Tools Increasingly Vital to Success of Construction Projects

Originally published on April 26, 2021 by Linda Strowbridge for NAIOP E-Newsletter.

Despite its traditional roots, construction has started to transform into a digital industry. Building information modeling, geospatial technologies, prefabrication and modular construction, drone services, augmented-reality wearables and other technologies are increasingly becoming a larger and more crucial part of successful, efficient, profitable construction projects.

“An Overview of Emerging Construction Technologies,” a NAIOP Research Foundation report, details the recent advances and new horizons in construction technology. Authors Andrew McCoy, Ph.D., a professor in the Department of Building Construction at Virginia Tech, and Armin Yeganeh, Ph.D., a postdoctoral fellow at Virginia Tech, talked to NAIOP about what these technology advances mean for construction firms and commercial real estate companies.

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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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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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City of Charlotte Non-Residential Building Code Ordinance Update

Public Input Sessions

The City of Charlotte’s Great Neighborhoods Committee is in the process of reviewing and evaluating the city’s current Non-Residential Building Code (NRBC) Ordinance. The NRBC Ordinance addresses interior, exterior, and property maintenance standards for commercial businesses. The NRBC ordinance was created in 2009 and has not been reviewed since it was originally passed by Charlotte City Council. 

Violations to the NRBC Ordinance can range from buildings open to vagrants and criminal activity to broken windows or major structural issues. If commercial buildings are not properly maintained, they can have a negative impact on surrounding neighborhoods and businesses. Therefore, the City of Charlotte is seeking community input for the review and evaluation of the ordinance through four virtual meetings and an online survey.

MEETING DATES/TIMES

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COVID-19’s Impact on CRE: What We Know Today (and Don't)

Join NAIOP Charlotte on Tuesday, March 24th at 2-2:30 p.m. ET for The Advantage Series is an exclusive member benefit, delivering expert insights into the latest research to help you make informed business decisions.

Repercussions from the ongoing COVID-19 pandemic are far-reaching and still quite unknown, but one thing is for certain: the impact on commercial real estate will be substantial. A week ago, CRE fundamentals were solid; will that improve our recovery timeline? What do experts see for the potential future of the industry? How do you recognize a deal today, and know whether it’s better to act quickly or hold? The questions are numerous, and NAIOP is here with guidance to support you today and get you thinking ahead for tomorrow. Have a question for our speakers? Submit it now.

Speakers:
Larry Lance, Executive Vice President-Asset Services, EverWest Real Estate Investors, and 2020 NAIOP Chairman
Al Pontius, National Director of Office & Industrial, Marcus & Millichap
John Chang, National Director of Research Services, Marcus & Millichap

Click Here to Register