Posted on May 25, 2018

The Wall Street Journal recently reported that Amazon.com Inc. has made about 200 phone calls to cities which failed to make the cut for consideration as a location for the company’s second headquarters. Some of the cities say they are "learning from the disappointing phone conversations and making changes." For example, Detroit is now considering strengthening its regional transportation network after Amazon officials told them it was the main reason the city did not make the HQ2 short list. The city did not have enough tech workers to fill 50,000 jobs and had no way, other than cars, of bringing people from outside the city limits to work at the proposed site. Additionally, Cincinnati, Ohio, and Sacramento, California, are restructuring workforce development programs to focus on tech talent. Orlando, Florida, is considering starting a community fund to invest in local tech companies and draw more entrepreneurs.

Traditionally when bargaining with big companies, according to the article, the site selection process is negotiated without fanfare, among a company, their consultants and local government. The "highly visible" Amazon process is forcing cities to explain why they did not reach the second round and address those weaknesses. "It is a kind of look-in-the-mirror moment," said Joseph Parilla of the Brookings Institution. Other experts warn cities should not operate at the behest of large companies and should instead establish their own priorities.

Posted on May 24, 2018

According to Cushman and Wakefield’s first quarter report on shopping centers, the retail sector will continue to struggle despite a strong economy. However, it’s not all bad news – while stores found in malls and power centers (e.g., electronics, department, sporting goods) will continue to decline, other sectors will expand, such as dollar stores, discount grocery, off-price apparel, beauty/cosmetics, fitness/health clubs, fast food, coffee and fast fashion, most of which operate in neighborhood and community centers. According to the report, these trends could benefit the owners of Class A malls. "Anchor closures at trophy or Class A malls present opportunities for landlords to attract new, more relevant tenants such as food halls, experiential concepts or other trendy new retailers at current rents," the report states. "Landlords will also see non-traditional mall tenants such as discounters, off-price or grocery chains move into some of these vacancies."

Posted on May 25, 2018

Yesterday, President Donald Trump signed the Economic Growth, Regulatory Relief, and Consumer Protection Act into law. This reform legislation includes NAIOP-supported provisions that ensure there is adequate capital availability for commercial construction financing.

The bill requires banking regulators to revise elements of the current High Volatility Commercial Real Estate (HVCRE) designation that unfairly targeted commercial construction lending, including:

• Allowing commercial borrowers to use the appreciated value of contributed land, rather than the original cost as under the prior rule.
• Limiting the application of the HVCRE classification by clarifying that loans made to acquire existing property with rental income would not be subject to higher capital requirements.
• Allowing banks to remove the HVCRE designation prior to the end of the loan.

Revision of the HVCRE designation was an important element of NAIOP's 2018 agenda, and enactment of this important legislation is a major victory for NAIOP's members. We commend the president and the bipartisan coalition of lawmakers who worked to deliver this measure.

Posted on May 23, 2018

By: Bill Mosher and Ann Sperling

Long-term planning and collaboration among various partners across multiple jurisdictions have been key to creating a new industrial park in Denver’s Globeville neighborhood.

More than a century ago, the Asarco Globe Plant was operating as a metal smelting facility, employing nearly 3,000 Coloradans in Denver’s culturally rich Globeville neighborhood. Over the years, an array of industrial processes and uncontrolled disposal on-site contaminated the groundwater and soil with heavy metals. This contamination resulted in the property being identified as a brownfield site, and decades of investigation and remediation began.

When Asarco finally closed the plant entirely in 2006, the community was left with a blighted, abandoned and fenced 77.5-acre site. Land developer EnviroFinance Group LLC (EFG), working closely with the Colorado Department of Public Health and Environment (CDPHE), the U.S. Environmental Protection Agency (EPA), and Adams and Denver counties, managed the site’s environmental cleanup, achieving regulatory closure in June 2015. (Ongoing monitoring will continue for several more quarterly testing periods.)

Click here to read more.

Posted on May 22, 2018

Listen to the audio recording of Greg Lindsay, NewCities Foundation Senior Fellow and keynote at the National Forums Symposium, on how cities as a service are changing how we live, work, move and more, watch the video (see below), or read the recap on NAIOP’s Market Share blog.

Less than a decade ago, Uber, AirBnB and WeWork didn’t exist. Today, one is worth more on paper than Ford Motor, another more than Hyatt, and the third more than Boston Properties. Why? The short answer is that there’s an app for all that, but the truth is more complicated — how and where we live, how we move, and how we work are all being disrupted.

Click here to read more.

Posted on May 21, 2018

By: Rachel Karitis

If you live in an urban area like Washington, D.C., or San Francisco, then you’ve probably seen the Skittles rainbow-colored bikes taking over the sidewalks. What you might not know is the specifics of how they work, and how this service could revolutionize the office commute.

Bike sharing as we have come to know it has tended to be city-funded (sometimes in conjunction with private companies) and presented in the form of expensive-to-install docks of bikes. Recently, there has been a veritable boom of private startups looking to make bike sharing profitable. These bikes do not need to be returned to stations, and instead can be picked up and left anywhere within city limits.

Click here to read more.

Posted on May 10, 2018

On Wednesday, May 9, 2018, NAIOP Charlotte hosted a form for more than 90 people on the upcoming Mecklenburg Tax Revaluation and the impacts of Federal Tax Reform on Commercial Real Estate.  A special thanks to our speakers:  Bobbi Jo Lazarus, Elliott Davis, Ken Joyner and Christy Lantis, both from the Mecklenburg County Tax Assessors. 

The rates and structures of taxes are changing and impacting commercial real estate dramatically.  Each presenter encouraged commercial real estate firms to become educated on the opportunities and impacts for their properties and organizations.  Click below to view the PowerPoint presentations.

• Tax Reform by Bobbi Jo Lazarus, Elliott Davis
• Tax Revaluation by Ken Joyner, Mecklenburg County Tax Assessors Office (updated May 2018; data within may change over time as the revaluation is a work in progress)
  

Click here to view photos from the event.

Posted on May 4, 2018

The Supreme Court is expected to issue a decision by the end of June in South Dakota v. Wayfair, Inc., et al, a case that could change how sales taxes are collected on Internet purchases.

Two years ago, South Dakota passed a law that would require out-of-state companies to pay sales taxes if they sold more than $100,000 worth of goods or made 200 separate sales transactions in the state. The law was designed as a direct challenge to the Supreme Court’s 1992 ruling in Quill Corp. v. North Dakota, which blocked states from collecting sales taxes from Internet retailers if those retailers don’t have a store, warehouse or sales staff physically present in the state.

NAIOP supports the collection of existing sales and use taxes from online retailers that are already owed to state and local governments. Not doing so puts brick-and-mortar retailers at a disadvantage to out-of-state vendors whose purchasers can avoid taxes.

Posted on May 3, 2018

By Jan A. deRoos, PhD and Shaun Bond, PhD

How does one go about creating a partnership to raise equity for ongoing real estate investment?

THIS ARTICLE INTRODUCES the contemporary structure of private equity real estate funds and outlines the steps necessary to create and properly manage a fund. It discusses the motivations for creating a fund and the factors that should be considered when setting one up. A future article will examine how securities laws impact the offering and management of a fund, as well as typical offering terms.

In its simplest form, a real estate private equity fund is a partnership established to raise equity for ongoing real estate investment. A general partner (GP), henceforth referred to as the sponsor, creates the fund. The sponsor asks investors, known as limited partners (LPs) to invest equity in the partnership. Those funds, along with money borrowed from banks and other lenders, will be invested in real estate development or acquisition opportunities.

Click here to read more.

Posted on May 2, 2018

By Jennifer Lefurgy, PhD

According to a recent Global Coworking Survey, 1.7 million people will be using 19,000 coworking spaces around the world by the end of 2018, and 40 percent of those users will be women. Since the industry launched in the mid-2000s, coworking companies have marketed to predominantly young, single men and provided associated amenities such as pool tables, craft beer, and other lures that typically encourage male bonding. This strategy has begun to change as the number of women using coworking services is predicted to rise and as women continue to voice their need for safer workplaces. Several female-focused coworking companies such as Shecosystem, Paper Dolls, Bloom, Rise Collaborative Workspace and Hera Hub have opened multiple locations in North America and Europe. Women-centric workspaces offer what traditional coworking spaces do not: calm, spa-like interiors; child care; lending libraries featuring female authors and mentorship programs.

Click here to read more.

Posted on April 25, 2018

2018 NAIOP Charlotte/CRCBR Clay Shooting Tournament

Thank you to everyone who came out on Thursday, April 19, for the NAIOP Charlotte and CRCBR Annual Clay Shooting Tournament at Meadow Wood Farm.

Click here to view photos from the event.

Top Overall Team
Charlie Guiraud
Jay Hendrix
Sean McDonnell

Top Overall Male Shooter
Matt Ferlisi

Posted on April 24, 2018

The REBIC Primary Election Voter Guide is now available. View below or click here to view.

Posted on April 23, 2018

Growing e-commerce companies and a shrinking window for last-mile delivery have pushed desirable industrial properties closer to the customer. Beyond improved delivery times, businesses and industrial developers have to contend with another key factor in site selection: the labor pool.

As distribution and fulfillment centers grow in physical footprint and reach to meet online retail demand, so has the number of employees needed to operate facilities. Industrial owners, developers and brokers need to take the labor pool into account when assessing properties.

In CBRE Executive Vice President Mindy Lissner’s experience, the size and quality of the local workforce have become top priorities.

Click here to read more.

Posted on April 20, 2018

The Net Lease Research Report by National Real Estate Investor (NREI) finds the single-tenant net lease sector will remain "in solid shape for the foreseeable future, even in what many are viewing as the late stages of the current real estate cycle." The results were compiled from 490 responses from a February survey of NREI readers; about half of the respondents held the titles of owner, partner, president, chairman, CEO or CFO. Sixty-three percent of survey participants expect cap rates for net lease properties to increase over the next 12 months. Debt and capital equity are also expected to remain as available as they have in the previous two years. The industrial and medical office sectors are predicted to drive the strongest demand over the next year. Respondents commented that there are "diamonds in the rough in secondary/tertiary markets," and the influx of German stores Lidl and Aldi will create investment opportunities. Dollar stores, largely protected from the rise of e-commerce, have "become a popular bet for some net lease investors."

Posted on April 19, 2018

By: Ashley Fahey

The first female president of NAIOP Charlotte has a sizable agenda for her leadership term this year.

Cheryl Steele, member at Charlotte law firm Horack Talley, began her presidency late last year at the local NAIOP chapter, part of the national organization that celebrated its 50th anniversary last year. NAIOP is a commercial real estate development association that includes networking and educational events as well as advocacy for legislation on behalf of its members, most of whom work in commercial real estate, at the national, state and local level.

Posted on April 18, 2018

According to Axios, U.S. companies are “largely unprepared” for the new European Union (EU) data privacy laws that will take effect this May. The General Data Protection Regulation (GDPR) is intended to “give users more control of how their personal data are used and streamline data processes across the EU.” Companies that fail to achieve GDPR standards will face penalties and fines. Europe has taken a stricter stance than the U.S. on protecting consumer privacy and the new regulation will serve as a “litmus test for regulating the data economy.” The effects will be far-reaching for tech companies and e-commerce merchants, but will also affect any company that collects data on customers, including real estate brokers, managers and owners. Any real estate companies dealing with individuals in Europe will have to remain compliant. GDPR will grant the following rights to individuals:

• The right to be informed that data is being collected.
• The right to access the data.
• The right to change, correct or update the data.
• The right to erase data.
• The right to restrict processing.
• The right to data portability.
• The right to object.
• Rights in relation to automated decision making and profiling.

According to Inman news, these regulations cover CRE companies that store personally identifying information on potential customers and existing tenants. Property managers, many of whom collect and process data regarding energy efficiency, must gain consent from tenants.

Posted on April 17, 2018

Lawmakers are back in Washington after a two-week break. But as they’re coming back into town, a key figure in the Trump administration is set to depart.

DJ Gribbin, the man who drafted President Donald Trump’s infrastructure plan, is leaving the administration. A White House official told reporters Gribbin wants to pursue “new opportunities.”

The infrastructure plan Gribbin helped pull together aims to spend $200 billion in federal money and generate roughly $1.5 trillion in overall infrastructure spending. Improving the nation’s infrastructure and transportation networks is a NAIOP legislative priority.

Posted on April 16, 2018

By: Greg Lazaroff

An Ohio-based developer of these specialized properties describes how it is capitalizing on growing opportunities as well as evolving market trends.

AN AGING POPULATION and medical advances that are extending the average person’s life expectancy are increasing the need for skilled nursing facilities. Developers are responding by gearing up to build more of these projects to meet the expected need. One such company, Premier Health Care Management, a Cincinnati-based nursing home developer and operator, plans to double in size in the next three years by expanding its total number of beds from 700 to 1,200 through building renovation, expansion and ground-up construction.

Premier’s in-house architectural team, PHCM Construction Inc., is currently working on five nursing home development projects with a combined construction value near $100 million. All are geared toward capitalizing on market trends that include residents’ desire for private rooms and more amenities. These trends, along with variables such as site conditions, occupancy codes and availability of financing, are among the primary challenges faced by most senior living development projects.

Click here to read more.

Posted on April 19, 2018

A recent RCLCO Advisory Report describes the small but growing category of e-sport arenas as holding promise to anchor new and existing large, mixed-use entertainment districts in North America. Electronic sports, or "e-sports" is a broad category covering "competitive multiplayer video games played by professional video game players, for spectators’ enjoyment during regular season and tournament league games." E-sports teams are generally organized based on game title and geographic region, supported by sponsors and advertising, and are moderated by professional e-sports commentators. Spectators can view in person at various arenas or watch livestreaming events over platforms such as Twitch and YouTube. E-sports reached 335 million viewers in 2017, split between occasional viewers (57 percent) and enthusiasts (43 percent), and viewership has increased by "double-digit percentages in recent years, and is forecast to exceed half a billion viewers by 2021."

E-sports arenas could, according to the report, drive adaptive reuse of existing real estate, especially former retail buildings. The majority of existing arenas have been converted from a range of product types including casinos, sound stages and office buildings. Arenas require tall ceilings for video monitors, fast and reliable Wi-Fi, and room for spectators. In-person attendance is relatively low compared to online viewers; events attract hundreds to low thousands. Thus, "smaller venues with a capacity from 500 to 5,000 and ranging in size from 15,000 to 30,000 square feet are ideal in the near term to host regular season games."

Posted on April 13, 2018

By: Clay Edwards

Open ceilings, exposed concrete floors and glass-walled spaces are the hallmarks of contemporary interiors. These design choices convey a hip and modern mindset for the companies and retailers that inhabit them, but they can come with a drawback that impacts business: noise.

Without the sound-dampening effects of the acoustical tiles used in drop ceilings and wall-to-wall carpeting and other soft surfaces, ambient noises such as conversations, whirring heating and cooling systems, and shifting furniture are amplified. And plans to mitigate this heightened noise can add extra materials, labor costs and time to your build-out.

Click here to read more.