Posted on July 15, 2019

Beginning July 1, the Town of Huntersville is assuming review of all land development review and permitting, bringing in-house a variety of services previously provided by Mecklenburg County.

But because the Town failed to request delegated authority for Erosion & Sedimentation Control from the North Carolina Department of Environmental Quality (DEQ), all E&S review and inspections for projects in Huntersville will continue to be provided by Mecklenburg County LUESA until at least mid-August.

All development plans previously submitted to LUESA will continue to be reviewed by the County, which will also conduct inspections on those projects. Any new development projects submitting from today forward will go through the Town’s Engineering & Public Works Department. Huntersville last month adopted a new fee schedule that is similar to the 2018 LUESA fees for land development plan review, bond maintenance and other related services.

Posted July 12, 2019

By Kathryn Hamilton

Studies have shown that shoppers of all ages are buying more online than in stores than ever before. So how are retailers addressing these shopping and buying habits? David Hudson and Chris Sultemeier, two leaders from Duke Realty, tackled this topic at I.CON West 2019, NAIOP’s industrial conference held this week in Southern California.

Consumers today fully expect to have the ability to shop and engage with a retailer across multiple channels. Three experiences build the multichannel experience for the retailer: 1) giving consumers the ability to buy in a physical store; 2) enabling orders to be placed online; and 3) following and engaging on social media. Studies show that if a retailer can connect with a consumer through all three channels, the value of that consumer (who is typically younger and wealthier) is much greater for the retailer; in fact, the average value of a consumer who engages with a retailer across all three channels is four times the value of one who engages through just one channel. This loyalty – and repeat customer – is key to a retailer’s success.

Click here to read more.

Posted July 11, 2019

By Trey Barrineau

Awash in granular digital information, companies are diving headfirst into high-tech solutions so they can make more deeply informed business decisions.

The technological advances shaking up nearly every aspect of modern life are starting to have significant impacts on commercial real estate.

“The biggest trend we’re seeing is this whole digital disruption in our industry, from ubiquitous linked sensors to the technology that’s going into smart buildings,” said Dale Dekker, AIA, AICP, principal with Dekker/Perich/Sabatini, during a recent NAIOP event. “It’s truly driving commercial real estate in a whole new way.”

Posted July 10, 2019

By Tom Chung

This efficient, environmentally friendly way to build could increase quality while reducing labor costs.

The shortage of construction workers in America has continued to intensify and building material costs are rising, leaving architects with the difficult task of completing projects that can meet demanding budgets. To remain profitable and meet project deadlines, architects and the industry at large must find creative methods to improve processes, increase return on investment (ROI) and introduce more efficient ways to source construction materials.

The University of Arkansas, in partnership with Leers Weinzapfel Associates, found an innovative solution to these challenges. The university used prefabricated wood construction to build the nation’s first large-scale mass timber residence hall project and living/learning setting, the Stadium Drive Residence Halls. The 202,027-square-foot project — envisioned as a creative learning environment within a relaxed, informal, tree-lined landscape — is being built from prefabricated wood, which has reduced on-site construction time and labor.

Click here to read more.

Posted July 9, 2019

By Dr. Harry Guirguis and Dr. Joshua Harris

Office Leasing Activity Expected to Grow Amid Sustained U.S. Economic Strength

The U.S. office market continues to expand ahead of forecast, posting 18 million square feet of net absorption in the fourth quarter of 2018 and 11 million square feet in the first quarter of 2019. Continued economic growth and increases in job creation are likely the main forces behind these levels of new leasing.

With first-quarter U.S. GDP growth of 3.2% annualized and a current unemployment rate of 3.6%, U.S. office space demand should remain strong during 2019. Dr. Harry Guirguis, Manhattan College, and Dr. Joshua Harris, New York University expect demand to register an average of 13.5 million square feet of net absorption per quarter, which will moderate slightly to an average of 12.7 million square feet per quarter in 2020. This forecast is driven by continued expected strength in office-using employment, which has grown twice as fast as general employment. According to the U.S. Department of Labor’s March 2019 jobs report, the primary office-using sector, Professional and Business Services, grew 1.22% year-over-year compared to just 0.6% for total nonfarm employment.

Click here to read more and download report.

Posted July 8, 2019

By Diane Hoskins and Andy Cohen

To lure top talent, employers must integrate technology and unique experiences into their spaces.

The future of cities is predicated on people. As engines of economic growth, urban areas are the life source of the built environment, with 80 percent of global GDP resulting from their output. The most vibrant cities are those that attract diverse talent with varied skills, perspectives and backgrounds. All of this is driving change and transformation in how people live, work and play.

Looking at the built environment, there is no place that is being more profoundly impacted than the workplace. To retain and inspire the best talent, the most successful organizations will be the ones that adapt their workplace strategies to focus on creating a destination with visceral experiences, an “always in beta approach” and purpose through space.

Click here to read more.

Posted July 3, 2019

By Joshua A. Harris

The industrial space market, along with the broad macroeconomy in the U.S., received a new jolt of uncertainty with President Donald Trump’s recent announcement of tariffs of up to 25% on goods imported from Mexico. These tariffs, if actually implemented, would represent a new front in global trade wars which have been recently escalating with China and others. Mexico is a very significant trade partner with imports totaling $371.9 billion and exports $299.1 billion in 2018 alone; this makes Mexico our third-largest trading partner and second-largest market for exported U.S. goods. Further, much of the U.S.-Mexican trade includes partially finished goods and component parts that are part of critical supply chains such as those in U.S. automotive production.

As such, the impact of a sustained bilateral trade war between the U.S. and Mexico could be uniquely devastating to both economies and especially to the U.S. industrial space markets. First, inland port markets, such as those in California and Texas, could be directly impacted by lowered volume of goods moving by truck and rail. Second, manufacturing and distribution markets in areas of high levels of U.S. manufacturing activity, such as Ohio and Tennessee, could be impacted by reduced orders as U.S. producers react to price increases of raw materials and components as well as lagging demand for exports. Finally, the vast network of distribution centers supporting retail and e-commerce could be affected by lower demand for goods given an economic slowdown and increased prices on all goods. In sum, such a trade war could easily tip the U.S. into recession.

Click here to read more.

Posted July 2, 2019

By Trey Barrineau

Amid a strong economy and surging demand for consumer products, industrial remains one of the hottest segments in the commercial real estate industry. That’s in spite of a minor cooling off that’s predicted for 2019 after several years of exceptional growth powered by the rise of e-commerce and the need for last-mile distribution facilities.

The NAIOP Industrial Space Demand Forecast for the first quarter of 2019 sees demand remaining steady at 57 million square feet of absorption per quarter, roughly the same as 2018. Additionally, the national vacancy rate is just 7 percent.

Posted June 28, 2019

The City of Charlotte is considering revisions to its Minimum Housing Code Ordinance, with changes that could impact housing affordability by raising the cost of property management and code compliance for landlords.

A full list of the proposed changes is available here, along with the presentation made last week to City Council’s Neighborhood Development Committee. They include:

• Requiring roof drains, gutters and downspouts be maintained in good repair and free from obstructions and designed to discharge rainwater away from
  the structure.
• Requiring any existing air conditioning systems to be ‘in good working condition.’
• Requiring that cabinet doors and drawers be ‘operating as intended and have functional hardware.’
• Requiring that exhaust ducts for clothes dryers be equipped with a back-draft
  damper.
• New fines of $500 per day for failure to correct any dangerous violations within 48 hours.
• Enhanced penalties for Environmental Court convictions that include probation or up to 30 days in jail.

Click here to read more.

Posted June 25, 2019

This past Wednesday, REBIC and representatives from the Cabarrus Chapter of the Greater Charlotte HBA met with Cabarrus County Planning staff to discuss a recent proposal to increase planning, zoning, and some building inspection fees. The increases would impact both commercial and residential zonings in unincorporated Cabarrus County, as well as construction projects countywide. 

Staff has proposed that these new fees will go into effect starting January 1, 2020. Along with changes in the cost of permit fees, staff is also proposing changing new construction permits to a single permit. Many of the changes result from a shift from a fee structure based on estimation of cost per project, to one based on square footage.

Click here to read more.

Posted June 13, 2019

The North Carolina General Assembly advanced legislation supported by REBIC, the North Carolina Association of Realtors® (NCR) and other industry trade groups that would clarify that residential and commercial Property Management agreements are largely not subject to the state’s Repair, Maintenance & Installation (RMI) sales tax.

SB 523 — Revenue Laws Clarifying & Administrative Changes, was given a favorable report this morning by the Senate Finance committee, with an amendment that requires Property Management companies to charge and remit RMI sales tax only in the following circumstances:

1. They provide repair, maintenance, installation services for an additional charge above what is stated in the management contract.
2. They arrange for a third party to provide the repair, maintenance, and installation services and impose an additional charge for arranging these services.
3. More than twenty-five percent (25%) of the time spent managing an individual real property during a billing or invoice period is attributable to taxable repair, maintenance, and installation services. The property manager can voluntarily provide a written affidavit to attest that no more than 25% of their services on a given property constitute taxable RMI services, which would clear them of liability for taxation on any portion of the contract amount.

The amendment also provides specific exclusions to RMI services, which help ensure much of the work done by property management companies is not subject to taxation. They are:

Posted on June 12, 2019

The City of Charlotte is in the process of creating a comprehensive plan outlining our community’s vision of how we want to grow and the steps needed to get there.  If you are passionate about our City and want to make a big impact, please consider becoming a Charlotte Future 2040 Plan Ambassador or a Charlotte Future 2040 Strategic Advisor.

Plan Ambassadors will help spread the word about the comprehensive plan and enhance engagement by assisting with outreach efforts. 

Posted June 7, 2019

At a recent meeting with City staff and representatives from the Charlotte-Mecklenburg Police Department (CMPD), representatives from REBIC, NAIOP Charlotte and AGC Carolinas raised objections to the Noise Ordinance revisions being proposed by the City of Charlotte.

Among other things, the amendments would allow CMPD to designate specific construction sites as ‘chronic noise producers’ and require the creation of a formal plan to mitigate noise impacts on surrounding neighborhoods.

Our three main concerns with the ordinance are:

Posted June 6, 2019

As it prepares to take over development plan review from Mecklenburg County on July 1st, the Town of Huntersville has amended its fee schedule to include the current (FY 2018) LUESA fees for land development plan review, bond maintenance and other related services. The fees are substantially lower than those proposed by Mecklenburg County in FY 2019 and 2020, which will increase more than 200% over a two-year period.

The main services the Town will take over from LUESA include development plan review; zoning, development and erosion control inspections; and bond administration. Five new positions have been created to provide these services, and the Town expects to have them in place within the next two months. The positions include a Street Inspector, an Erosion Control Inspector, a Bond Administrator, a Stormwater Plan Review and a Zoning Inspector.

Posted May 21, 2019

By Mary Burke Baker

Main Street and industries also stand to benefit from the new tax incentive.

Opportunity Zone incentives offer significant tax benefits to encourage long-term investment in low-income areas. Enacted as part of the tax reform bill that was signed into law at the end of 2017, Opportunity Zones sparked an initial wave of interest among commercial real estate developers, including those focused on affordable housing, office space and mixed use.

However, this early excitement led many in the real estate industry to overlook the fact that Opportunity Zones potentially can be used for any active trade or business. That includes manufacturing, retail, hospitality, medical practices, day care centers, research facilities, energy plants and grocery stores.

Click here to read more.

Posted May 20, 2019

Lawmakers want the Treasury Department to track the effectiveness of Opportunity Zones. Last week, a bipartisan set of senators including Tim Scott (R-SC), Todd Young (R-IN), Cory Booker (D-NJ) and Maggie Hassan (D-NH) introduced S.1344, which would put in place new oversight requirements for investments in the zones. A companion bill, H.R. 2593, was introduced in the House by Democratic Rep. Ron Kind of Wisconsin.

Investors may also be given more time to invest in the zones. An aide to Sen. Scott told Bloomberg that he and Sen. Booker are considering introducing legislation that “would move back by one year the start date of the tax breaks.” Investors are facing rapidly approaching deadlines – for some, as soon as June 29 – to buy into eligible projects in order to take full advantage of the tax benefits. Pushing back the start date would buy the Treasury additional time to finalize regulations governing these investments, and provide certainty to those deploying capital in the zones.

In other legislative news, the House Ways and Means Committee plans to hold a hearing Wednesday to discuss climate change. NAIOP supports legislation that takes a sensible approach to incentivizing energy efficiency without imposing new mandates.

Posted on May 8, 2019

The NAIOP Sentiment Index is designed to predict general conditions in the commercial real estate industry over the next 12 months. The forecast is not based on an analysis of historical data, but rather it represents a look into the future by real estate developers, investors, operators and brokers. These NAIOP members are asked to respond to questions based on their ongoing work, including projects in their pipelines. For more information, see Understanding the Index.

Download the Report

Posted on April 29, 2019

Proposed regulations rolled out last week by the Treasury Department should make it easier for commercial real estate practitioners to invest in qualified Opportunity Zones (OZ).

An “Opportunity Zone” is defined as “an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment.” They were created as part of the 2017 Tax Cuts and Jobs Act, which NAIOP supported.

Investors can reduce their taxes by taking capital gains income and putting it in a Qualified Opportunity Fund that invests in designated Opportunity Zones. Under the latest IRS regulations, the funds now have 12 months instead of six to put their money to work in an OZ.

Posted on April 26, 2019

By Mark Abell

A relatively new extended-maturity loan option from the U.S. Small Business Administration is heating up the real estate market among small businesses that are anxious to purchase properties while the economy is booming and interest rates remain low.

In April 2018, the U.S. Small Business Administration announced changes to its 504 loan program to allow for a 25-year maturity on the debenture portion of the financing package. A 504 facility is structured in three parts: a bank loan for 50 percent of the amount being financed, up to a 40 percent debenture (or bond) that carries an SBA guarantee, and as little as 10 percent equity funded by the borrower. Previously, the SBA-backed debenture was available with 10- and 20-year maturities. Now that longer 25-year maturities are available, businesses can effectively borrow more funds.

Posted on April 23, 2019

The biggest thing happening in commercial real estate is digital disruption.

Traditionally, construction and CRE have lagged behind other industries, but technology is changing so rapidly it's setting the framework for how we look at CRE. It's no longer a 40-50 year asset – it's a dynamic process continually being reshaped by the convergence of technologies.