Originally published on April 16, 2024, by NAIOP.
Charlotte member Sean McMullan has been selected as a NAIOP Research Foundation Visionary.
The Research Foundation established the Visionaries program in 2017 to connect outstanding rising industry professionals with Research Foundation Governors who are experienced, well-respected industry leaders. The 2024 cohort of Visionaries will be inducted at NAIOP’s National Forums Symposium, May 8-10, in Minneapolis.
Originally published on April 4, 2024, by Bob Boyer for NAIOP.
In the ever-changing world of construction, creative solutions are key to moving projects forward. In an industry where tradition can take precedence over innovation, it’s important for general contractors to regularly challenge the norm; doing so can uncover modern insights that reshape the way we build the communities where we live and work.
Technology exists at the root of all innovative breakthroughs, especially in the construction world. Although sometimes daunting to adopt, these new tools are positioned to help increase project efficiencies, save time and uncover cost-saving opportunities. Examples of these impactful technologies include Building Information Modeling (BIM), 3D printing, virtual and augmented reality, artificial intelligence and blockchain technology. As a forward-thinking general contractor looking to enhance existing processes and enter a new generation of productivity, leaders should consider implementing these tools into their daily practices to remain relevant and up to speed.
Originally published on April 3, 2024, by Aquiles Suarez for NAIOP.
On March 11, President Joe Biden submitted his FY 2025 Proposed Budget to Congress. Like the budget he proposed last year around this time, it contains a number of tax policy changes that, if enacted, would have an outsized negative impact on the commercial real estate industry. But unlike last year’s proposal, this is an election-year proposal intended as the administration’s statement on the economic agenda Biden will pursue if re-elected this November.
That does not mean, however, that this budget proposal should be seen as simply a rhetorical document with little chance in a Republican-controlled House of Representatives. Unlike prior year budget proposals, this one is a setup for an unavoidable tax debate in 2025, when many of the tax provisions enacted during the Trump administration in the Tax Cuts and Jobs Act of 2017 will expire. As a result, many lower and middle-income Americans, not just businesses, will face tax increases if Congress fails to renew a number of provisions. Democrats and Republicans will be forced to negotiate and pass tax legislation because both sides of the political aisle will need it.
If reelected, Biden will of course claim that the voters agree with his economic vision, and he will have enormous negotiating leverage in the tax debate because of the scheduled tax increases that will go into effect.
Originally published on March 25, 2024, by Brian Walker for NAIOP.
NAIOP’s Market Share blog sat down with 2024 NAIOP Chair Brian Walker to ask him about his career path, NAIOP experience, and vision for the association this year.
I can recall what it felt like to be a young CPA just starting my career. NAIOP and the Pittsburgh chapter were essential in connecting me with the knowledge, research, education and people I needed to launch my career. Our DLs comprise nearly 28% of our total membership, and they’re the future of our industry and association. I’m thrilled to have the opportunity to meet so many of our rising leaders this year and support their growth.
Pittsburgh has transformed from its roots as “the Steel City” into a vibrant hub for healthcare, education, technology, robotics, and financial services. Western Pennsylvania has been a strong annuity market for investment. Our real estate has always been built and priced right, with growth slow and steady. The offset is that the market is not growing rapidly, and we see lateral movement from old buildings to new.
Originally published on March 13, 2024, by Kathryn Atkins for NAIOP.
Although this year’s I.CON West conference is taking place in California, much of the due diligence session applies to the rest of the country. In all aspects of due diligence, the goal is the same: How do we get the project for our investors through the approval cycle with the least risk, time and expense?
In a panel session, four experts discussed slightly different aspects of due diligence practices (political; biological and resource; California Environmental Quality Act, if applicable; and site selection). Still, the take-home consensus was how properly executed due diligence can give the developer leverage with the growing number of naysayers in cities, counties and states across the United States.
How do commercial real estate leaders work through increasingly difficult objections to building and growth? Say it doesn’t cost money to mitigate the challenges to the project and each due diligence – it can still push the timeline and invite more “bounty hunters” (those seeking to derail the project and exact a gatekeeper fee for stepping aside). It’s not worth it to some folks, while others with a higher risk tolerance might be willing to forgo the due diligence. It’s a risk.
We are proud to introduce our new association members! The following is a list of individuals who have joined NAIOP Charlotte since January 1, 2024:
The always popular DL Mentorship Program is back! This program is exclusively for Developing Leader members (ages 35 & under) and provides a special forum for personal and professional growth through one‐on‐one learning sessions with accomplished and experienced professionals in the CRE industry. Take advantage of this opportunity to benefit from the knowledge, guidance, and ideas willingly shared by the program mentors.
The specially designed Mentorship website allows each participating mentee to familiarize themselves with the program mentors and book 1‐hour sessions with them to discuss career topics important to the mentee. Meetings can take place between April through June.
NOTE: 2024 mentors are still being confirmed/added to the website & are in the process of updating their profiles.
Booking is first-come, first-served! The Mentorship Program provides a special forum exclusively for DLs to meet one-on-one with selected industry leaders. We have 20+ mentors for this year’s program, all with extensive CRE industry knowledge. Take advantage of this opportunity to make connections and benefit from their knowledge, guidance, and ideas.
All four standing committees of the Charlotte City Council met yesterday. Here's a quick outline of what was covered with links to agendas and presentations.
Transportation, Planning, & Development
Planning Director Alyson Craig provided an update to the committee and referenced three text amendments that are currently working their way through the process:
During last night's Charlotte City Council Business meeting, Planning Director Alyson Craig announced the filing of a new text amendment aimed at tightening rules for Conservation Developments. The amendment will include the following:
The initial proposal (virtually identical to the one offered last night) was presented at the March 7th meeting of the UDO Advisory Committee where a more comprehensive presentation was provided. As was earlier reported, this elicited a rather spirited discussion among committee members both through regular conversation as well as virtual chat.
This particular change appears to be on the fast track as the schedule is as follows:
We have submitted multiple comments on the above proposal and will reiterate those concerns during Thursday's UDO Advisory Committee meeting.
Two additional recommendations were also offered during last night's session:
#1 Prioritize New Housing Supply in Key Locations - Create a Compact Development Option for new residential subdivisions 2+ Acres
Originally published on March 26, 2024, by NAIOP.
Six months into the 2024 fiscal year, Congress passed a final $1.2 trillion funding agreement and President Joe Biden signed it into law. The package was approved by the House (286-134) and Senate (74-24) before going to the White House on Saturday. It will keep the federal government operating until Sept. 30, 2024.
On the eve of the spring Congressional recess, Rep. Ken Buck (R-CO) officially resigned from the House and Rep. Mike Gallagher (R-WI) announced that his resignation will be effective April 19. These developments will leave House Speaker Mike Johnson (R-LA) with a slim 217-213 majority, but that may not be the worst of his problems, as Rep. Marjorie Taylor Greene (R-GA) filed a motion to “vacate the chair” (remove the speaker) just before she left town. If the Democratic minority supports Greene’s motion, Johnson will have to secure unanimous opposition from the rest of the Republican Conference to save his leadership role.
Originally published on March 2024 by Hany Guirguis, Ph.D., Manhattan College and Joshua Harris, Ph.D., Fordham University for NAIOP.
With the U.S. economy expected to continue to grow slowly, the authors estimate that quarterly net absorption of industrial space will average 14.0 million square feet per quarter over the next two years, or 62.8 and 49.1 million square feet in 2024 and 2025, respectively. This forecast represents a relative “cooling” trend following what had been a protracted period of above-average industrial absorption following COVID-era demand shifts that accelerated the need for distribution space to meet consumers’ increased preference for home delivery. As such, the projected slowdown in net absorption reflects more of a “return to normal” than a negative outlook for occupiers of industrial real estate.
After two years of absorption that significantly exceeded long-term averages, industrial net absorption in 2023 totaled just 93.7 million square feet compared with a record high of 486.6 million square feet of completions. While such a supply and demand imbalance is usually a cause for concern, the effect has been to bring balance back to an industrial market that had been substantially undersupplied since 2020.
Originally published for the Spring 2024 Issue of NAIOP Development Magazine by Anthony Paletta.
Greenville, South Carolina, once styled itself the “Textile Capital of the World.” While it might be difficult to quantify that superlative, there’s no question this small city along the Reedy River in the foothills of the Blue Ridge Mountains had ample claim to being one of them.
The city and its surrounding landscape once contained 18 textile mills, only two of which remain operational today. Four of the mills burned down or were demolished, but the rest remain standing, and they have proved to be excellent fabric for reuse. At least nine have been converted to new functions, including residential, office, and mixed-use. The most recent conversion is Judson Mill, an 800,000-square-foot complex that has returned to life as a mixed-use project containing apartments, retail, offices, and more.
Adaptive reuse is often an undertaking for buildings that have long sat dusty, but this wasn’t the case at Judson Mill, which produced textiles from 1912 until 2015. Renovation of the mill began in 2019 as a project of Belmont Sayre Holdings of Chapel Hill, North Carolina, and Taft Family Ventures of Greenville, North Carolina. The project was designed by the Greenville, South Carolina, studio of McMillan Pazdan Smith Architecture.
Originally published on March 13, 2024, by Kathryn Hamilton, CAE for NAIOP.
Primarily used for the storage of trucks, trailers, containers, large equipment and materials, industrial outdoor storage (IOS) is a unique property type that comes with its share of challenges. A panel of IOS experts took the stage at I.CON West this week in Long Beach, California, to walk attendees through the pressures of this industrial-zoned land and why it’s important to an overall logistics portfolio.
Moderated by Matthew Goelzer, AIA, LEED AP, principal with MG2, panelists included Jennifer Hall, partner, LIDD Consultants Inc.; James Hooks, senior vice president, CBRE; Michael Landsburg, chief development officer, NFI Real Estate; and Richard Weiss, senior vice president, Dalfen Industrial.
Here are takeaways from their conversation:
Originally published on February 15, 2024, by Toby Burke for NAIOP.
The transportation sector accounts for 28% of greenhouse gas emissions – the highest percentage of any sector, reports the U.S. Environmental Protection Agency. The result of this has been greater public and private sector demand and interest in a national network of charging stations to support the use of more electric vehicles (EVs), including trucks, also known as transportation electrification.
During NAIOP’s Chapter Leadership and Legislative Retreat this week in Washington, D.C., chapter leaders and staff attended a session that recognized the leading role of state governments in establishing a national network of public EV charging stations following the passage of the bipartisan Infrastructure Investment and Jobs Act of 2021. Anne Blair, vice president of policy at the Electrification Coalition, highlighted this and its impact on the commercial real estate industry following the allocation of $7.5 billion from the federal act to establish this national network. The federal allocation is broken into two parts: $5 billion for states under a national EV infrastructure (NEVI) formula and $2.5 billion in charging and fueling infrastructure (CFI) grants.
After stating the case for transportation electrification as a cleaner alternative to oil-based fuels, Blair provided an overview of federal funding investments in the manufacturing and production of EV materials, such as battery production in the southeastern states. Her presentation also included a review of available grant and tax credit programs for heavy-duty trucks and port operations.
Originally published on February 28, 2024, by Brian Kane for NAIOP.
As the retail landscape continues to evolve with some well-known retailers declaring bankruptcy or streamlining their real estate portfolios, it doesn’t have to signal a loss for the surrounding community. The opposite is true. People increasingly want their healthcare brought closer to home, and with these abandoned spaces comes opportunity.
According to a report from CBS News, in 2023, retailers across the country shuttered more than 4,600 locations – an 80% increase from 2022. Leading the pack on these closures was Bed Bath & Beyond, which went bankrupt in April 2023 and subsequently closed 866 stores across all three of its brands. Discount home goods retailer Tuesday Morning filed for bankruptcy and shuttered 463 stores, Foot Locker closed 116 stores, and drugstore brands Rite Aid, CVS, and Walgreens closed a whopping 807 locations combined. Even big box titan Walmart wasn’t safe from the scourge of cutbacks, ultimately closing 21 stores across 12 states last year.
But from the dust of retail giants comes opportunity for healthcare systems looking to expand, grow, and better embed themselves in the communities they serve. While new construction in healthcare has slowed with the rise of lending and construction costs, many healthcare companies are finding that converting vacated retail space can be an affordable alternative to building a ground-up facility, and at the same time offer patients easier, more convenient access to the healthcare services they need.
Originally published on March 4, 2024, by Lucian Alixanderescu for NAIOP.
For the last few years, industrial real estate development has been on a tear, thanks to elevated demand for warehouse space. Specifically, increased demand for e-commerce – in conjunction with logistical difficulties – led companies to break ground on massive logistics and distribution centers. Now, with warehouse space vacancies normalizing and speculative projects slowing down, CommercialCafe highlighted the next trend taking hold in industrial space construction: manufacturing facilities, particularly for electric vehicles (EVs) and semiconductors.
In a study analyzing the current state of industrial real estate construction and the current pipeline, CommercialCafe highlighted which markets have the most industrial space underway, as well as the largest projects slated for completion in 2024.
Originally published on March 12, 2024, by Kathryn Atkins for NAIOP.
When J.C. Renshaw, head of supply chain consulting North America for Savills, started his career 35 years ago, supply chains had not been invented. Okay, they were there, but it was when the COVID-19 pandemic hit that “supply chain” became a household phrase – especially for people who were late to their local retailer to purchase toilet tissue. For the layperson, and even those in the industry struggling to manage their unwieldy supply chain, the definition is the same: getting the right “stuff” to the right place at the right time. Simply said, not easily done.
In his discussion, Renshaw set the stage for where we are now, covered some of the current megatrends challenging supply chains, and discussed the many countervailing and interwoven forces at work. The goal is to find and wield the magic wand that will result in even the smallest competitive edge in the marketplace.
From labor shortages, retention issues, and rising costs to international transit through the Suez and Panama Canals, and huge fluctuations in inventory level requirements, supply chain leaders have their hands full. While port volumes and congestion have normalized, huge ports (Los Angeles and Long Beach, and New York/New Jersey) find themselves competing for business – and port incentives are a novel approach the industry has had to embrace.
Originally published on March 13, 2024, by Jennifer Lefurgy, Ph.D., for NAIOP.
Understanding the ever-evolving regulations and reporting requirements around ESG can be challenging. A panel of industry experts spoke to I.CON West attendees on why these regulations are about more than compliance. They can lead to market differentiation, improved communication with tenants, and interest from global investors.
Moderator Megan Krest, associate director of ESG at Cushman & Wakefield, asked the panelists about their work in California involving reporting and compliance. Ethan Gilbert, director of global ESG at Prologis, discussed AB 802, a California law requiring buildings over 50,000 square feet to submit annual energy consumption data to the state.
“It’s a challenge because most industrial owners are operating under a triple net lease model, so utilities are under the direct control of our tenants,” he said. “The usage is not something the landlords have insight into, yet the state holds us accountable.”
Originally published on March 13, 2024, by Marie Ruff for NAIOP.
“Developers are prioritizing projects that go beyond standard building codes to deliver high-performance buildings,” said Grant Waldron, director of sustainability strategy, GAIA, moderator of a panel on ESG (environmental, sustainability and governance) and decarbonization strategies at I.CON West in Long Beach, California. He identified ESG reporting and requirements, tenant demands, operational savings and capital markets as factors driving change.
“What excites me about ESG is that as developers, we get to communicate all the things we’re already doing well,” said Josh Cox, LEED AP, senior vice president, development, Hillwood Investment Properties. For Hillwood, this includes steps like pursuing USGBC LEED certification to have third-party verification that can communicate the company’s strong environmental and sustainability commitment.
While the environmental piece of ESG often takes center stage, the panelists talked about volunteering as part of the social component of ESG. “It’s phenomenal what you can do for your community, with your community,” said Erin Thrash, vice president, of architecture and design, Rexford Industrial Realty, Inc. Rexford bought a hotel that the company is going to turn into an industrial facility; the company opened the doors to 11 charities for a “shopping experience” where they picked up 4,000 items from the property including linens, dishwashers, pizza ovens and more. “All of these items would have been things that we might have had to pay to demo, but instead we gave that all back to the community.”
Originally published on March 20, 2024, by Toby Burke for NAIOP.
NAIOP members know that the procurement of a local permit is a fundamental and essential part of commercial real estate development in providing communities with properties for people to live, work and play. However, local permitting processes vary and too often become unnecessarily delayed. These variations and delays lead to uncertainties that affect the development’s completion, the financing structure, the retention of contractors, resources and equipment, and, ultimately, the cost for the owner, tenant and end-user.
Because of this, NAIOP chapters across the U.S. are using Georgia’s legislation as a template in advocating for reforms that bring predictability, consistency and transparency to the local permitting processes within their respective states. Key features of the state’s reforms include:
