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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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Stimulus Negotiations Stalled as Supreme Court Confirmation Moves Forward

Negotiations on an economic stimulus bill remain at an impasse a week before the November U.S. presidential election, with both sides blaming the other for the lack of agreement. While saying in television interviews over the weekend that “I never give up hope,” Speaker of the House Nancy Pelosi’s comments made clear that Congress is still not close to agreement on a variety of issues. “They keep moving the goalposts. Every time they say we move the goalposts, that means they’re projecting what they did,” Pelosi went on to say. White House Chief of Staff Mark Meadows made a similar accusation in an earlier interview.

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Ensure Your Voice is Heard

Advocacy matters. Whether it’s an election year or not, it’s always important to have the interests of commercial real estate represented on federal, local, and provincial levels. Renew with NAIOP today for 2021 to ensure your voice is being heard: 

Renew Your Membership

New Lunch with a Leader on November 16 – Register Today!

Join us on November 16th for this lunch with a leader, get an exclusive overview of the recommendations in the Comprehensive Plan and the Unified Development Ordinance and how it will impact the future of commercial real estate development. This is a critical policy for the way commercial real estate develops in the future. You are invited to submit questions in advance here.


Also, the City of Charlotte will unveil its draft Charlotte Future 2040 Comprehensive Plan and host a screening of “Back to the Future” at a drive-in community meeting on Saturday, October 31. Register to attend here.

Our Leader

Alyson CraigAlyson Craig
Deputy Planning Director
City of Charlotte
Alyson Craig is the Deputy Planning Director for the City of Charlotte’s Planning, Design, and Development Department. She provides oversight to two of the Department’s divisions, Land Development and Entitlement Services (Rezoning/UDO), our HR and budget operations, and serves as a backup to the Planning Director. Learn more.

Registration
This event is offered to NAIOP Charlotte members only at no charge. Prior registration is required. Zoom login information will be sent two (2) hours prior to the event.

Click Here to Register
Questions
If you have questions, please contact the NAIOP Charlotte office at [email protected].

NAIOP Membership Renewal

NAIOP continues to get new members this year as we navigate the current crisis. Why? Commercial real estate professionals know that more than ever, NAIOP Charlotte is what they need to stay competitive during challenging times. #NAIOPcharlotte

Renew Now for 2021

The Evolution of the Warehouse: Trends in Technology, Design, Development and Delivery

Originally published by Steve Weikal and James Robert Scott in October 2020 for NAIOP Research Foundation.

The rapid expansion of e-commerce sales has spurred demand for industrial real estate, including for large regional distribution centers and small fulfillment centers located in urban and suburban areas. The acceleration of delivery timelines has also reshaped industrial building interiors, as online retailers and third-party logistics firms have made substantial investments in new technologies such as collaborative robots and automated storage and retrieval systems. In addition to increasing the productivity and profitability of industrial assets, new technologies are also allowing retailers and building owners to add distribution uses to existing retail properties.

 

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[Video] The Newest Work of the NAIOP Research Foundation

Originally published on October 16, 2020, for NAIOP Research Foundation.

NAIOP Research Foundation | October 2020 Update

Hear about the latest work of the NAIOP Research Foundation and meet its new governors. 

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Doing CRE During a Crisis: Remote Work, New Technologies

Originally published by Trey Barrineau, Daniel Levison, Turner Levison for NAIOP 2020 Issue. 

COVID-19 is forcing the industry to embrace teleworking and a wide array of digital tools.

The COVID-19 pandemic has introduced a great deal of uncertainty into the commercial real estate industry. It has also forced CRE companies to come up with solutions to keep operations running when it’s not feasible for everyone to be in the office. That includes adopting new technologies and embracing remote work.

“I think there will be lots of new investments in collaborative technology to enhance the growth in working remotely,” said Gregory May, executive vice president and West Region market leader for Newmark Knight Frank, during a NAIOP webinar this spring. “As brokers, we’re used to working remotely. About 90% of our day is out of the office or in our cars. I think it’s something that’s here to stay.”

 

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The Office Reimagined: A Destination for Innovation

Originally published on October 19, 2020 by Sanjay Rishi for NAIOP.

As the greatest work-from-home experiment ever continues, many companies are starting to think beyond how and when their workforce will return to the office and tackling a much broader issue: what role the office will play in their corporate strategy going forward.

The past six months have proven that many tasks – and in some cases complete roles and organizations – can be done virtually with little negative impact on productivity and job satisfaction. Yet, employees overwhelmingly want to return to the office, at least in some capacity. A work from home study conducted by Gensler from April to May indicated that, although most people (70%) want to return to the office for the majority of their week, 30% want a flexible work arrangement.

The role of the office in the future will vary from company to company, based on their unique culture and trends within their broader industry, but employee sentiment points to the office retaining its standing as a key driver of culture and magnet for in-demand talent. However, the shift to remote work will have wide-ranging implications, including where offices are located, how they are designed, who utilizes them and when they are occupied.

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Social Distancing Accelerates Retail Trends, Space-Use Models

Originally published by Dan Spiegel for Commercial Property Executive on October 9, 2020. 

The COVID-19 pandemic accelerated trends in our work and home lives that were already underway. For many office workers, employers that previously embraced some workplace flexibility, permitting employees to work from home on occasion, are now experimenting with full-time flexible models and rethinking the physical workplace.

Similarly, the migration from in-store to online sales—that was already trending for office supplies and shoes—now includes an increasing percentage of online sales of groceries, home furnishings, and many other consumer goods. Beyond online shopping, COVID-19 is accelerating retail trends regarding the customer experience and use of space. 

 

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Economic Update with Ted Abernathy is Tomorrow! Still Time To Register

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

Tomorrow 10/20 | 9:00am - 10:00am

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. NEW BENEFIT! Event sponsors will also receive the event recording. Click here to confirm today!



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Reg Rates Increase Friday! Register Now for Tracking Trends and Tangents

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

Tuesday, October 20, 2020 | 9:00am - 10:00am
Registration Rates Increase Friday, October 16!

Next week, 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. NEW BENEFIT! Event sponsors will also receive the event recording. Click here to confirm today!
 

Registration

Registration for members is $25 and $35 for non-members through tomorrow, October 15. Beginning Friday, 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

 




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Industrial Real Estate Demand on the Rise in the U.S.

Originally published by Cairg Meyer and Rich Thompson for NAIOP's blog on October 5, 2020. 

Investing in industrial real estate was never considered as attractive as office or retail in the past. However, this dynamic has changed, in large part, due to the growth of e-commerce. Investing in industrial real estate is red hot and the continued growth of consumer online shopping drives the need for additional warehouse space. Industrial real estate – including plants, warehouses and distribution facilities – has been the investment “asset class of choice” the past several years and demand is on the rise.

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How Coronavirus Changed the Retail Landscape

Originally published for the Wall Street Journal by Inti Pacheco on October 6, 2020.

The coronavirus pandemic accelerated a major shift in the retail industry. Traffic to stores evaporated. Online credit-card transactions soared. E-commerce sales in the second quarter rose by 44.5% compared with the same period in 2019 and they now make up 16% of all U.S. retail sales, according to the Commerce Department.

Consumer spending has picked up since many cities and states began lifting lockdown restrictions and allowing stores to reopen in May, but only some sectors have regained lost ground. 

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Just Announced: Officecast is Coming Nov. 9-10

Date: Monday, November 9, 2020 - Tuesday, November 10, 2020

Where: Virtual

The world is re-examining how we go to work, and the implications for the office sector can’t be overstated. Prepare for the paradigm shift at Office cast 2020.

Hear from leaders in the space about how to adapt to the radical shifts in work habits and tenant demands; the powerful, practical technologies critical for a healthy workplace; the state of capital markets; potential untapped submarket stars, and more.

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2020 REBIC General Election Voter Guide

The Real Estate and Building Industry Coalition (REBIC) has released the 2020 General Election Voter Guide. Make sure you know where to vote early! Find your local polling place with the North Carolina State Board of Elections and download the voter guide by clicking the image below.

2020 REBIC General Election Voter Guide

NAIOP September Coronavirus Impacts Survey: Deals Continue, but Challenges Persist

Originally published on October 2, 2020, by Shawn Moura, Ph.D. for NAIOP.

Last week, NAIOP conducted its sixth 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 deal activity, but also indicate that the coronavirus is having a more pronounced effect on ongoing development projects than in prior months. In addition, more building owners are responding to the outbreak by offering tenants a broader range of rent relief arrangements and by increasing building safety precautions.

The survey was completed by 203 NAIOP members between September 15 and 18, 2020. Respondents represent a range of professions, including developers, building owners, building managers, brokers, lenders, and investors.

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Rethinking Real Estate: The Office of the Future

Originally published by Rob Derven in the NAIOP Fall 2020 Issue.

Safety, health, and wellness in buildings and workplaces may become as important over the next 10 years as LEED certification has been over the past decade.

Cool, transit-rich urban office projects of the future and their suburban counterparts will offer tenant-attracting amenities and design, but what may actually close the deal will be the safety, health, and wellness features of the building. That’s according to recent interviews with office developers/owners who are on the front lines of making their projects safe places to work.

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New Report: Midyear Economic Impacts of COVID-19 on CRE

Originally published by Stephen S. Fuller Ph.D. for NAIOP on October 2020.

The NAIOP Research Foundation commissioned Steve Fuller, Ph.D., professor emeritus at George Mason University, to undertake a study of the 2020 mid-year economy and how second quarter shocks may influence commercial real estate development in the future.

Fuller found, according to government and private-sector data, declines in expenditures and value across most building types, specifically:

  • Construction expenditures and building activity for office, industrial (excluding warehouse), and retail buildings declined 23.4% from midyear 2019 to midyear 2020.
  • For the same period, the value of nonresidential construction put in place was down 23.2%.
  • Fuller estimated that the value of nonresidential construction put in place for all of 2020 will decline by 18.1% from 2019.

Government officials, elected representatives, and professionals should be aware of the critical contributions of construction and real estate development in strengthening and advancing the economy. Supporting construction activity through public policy, creating a positive business climate, and enabling governments to accelerate project approval processes will further boost affected economies and contribute to a broader economic recovery.

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Emerging Logistics Trends in Commercial Real Estate

Originally published by Brielle Scott for NAIOP on September 30, 2020. 

In a recent keynote at the CORFAC International Virtual Fall Summit, Curtis Spencer, president of IMS Worldwide, discussed the rapidly evolving trends that are affecting all sectors of commercial real estate, including supply chain shifts, increasing demand for cold storage, reshoring and more.

“New supply of industrial space outpaced demand in 2019, but because 2018 was a record year for industrial absorption, absorption numbers for 2019 appeared low, as much-needed industrial supply finally caught up to tenant demand,” he pointed out.

Industrial real estate operators expect the redistribution of consumer supply chains due to the coronavirus pandemic to drive a new surge in warehousing demand. A push for supply chain resilience will lead to a projected additional 750 million square feet of industrial space in the U.S. alone, as companies look to foster safety stock of inventory.

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