Filtered by category: Industry Clear Filter

It’s Time to Bring Draw Management into the 21st Century

Originally published on September 28, 2023, by Billy Olson for NAIOP.

Construction projects have many moving parts, stakeholders and dependencies. If money doesn’t flow smoothly from lender to borrower, a project can quickly become delayed. Because construction loans are funded in increments, rather than all at once, managing draws are of the utmost importance.

One way to think about draw management is to conceptualize it as the project’s heartbeat. While there are other components to a project’s overall health, it’s difficult to imagine a project doing well if its heartbeat is off pace. But just as pacemakers exist to keep real hearts healthy, software can ensure draw management is executed seamlessly and on-schedule.

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CRCBR 30th Anniversary Celebration

Cheers to 30 Years!
October 26 | 3:30pm-5:30pm | Goldie’s

Get ready to celebrate with industry leaders! Celebrate CRCBR’s 30th year as one of the largest and most successful regional commercial real estate associations in the United States! We are serving great food, drinks, games, and live entertainment, with chances to win incredible door prizes. Band and festivities begin at 3:30pm. This event is open to members and non-members.

Registration and Sponsorships

Event registration is open. Congratulate CRCBR or unleash business development opportunities with an event sponsorship! Questions, please email [email protected] 

Register Here

No Guarantees for Year-end Tax Legislation

Originally published on September 20, 2023, by Aquiles Suarez for NAIOP.

Usually, at this time of year, members of Congress and advocates for industry are strategizing on how best to position their tax priorities for inclusion in a year-end tax package. In many instances, success has depended on a tax title becoming part of a massive, must-pass omnibus spending bill that comes together in December, when senators and representatives desperately want to get home for the holidays.

But this time could be different. While fighting in Congress over spending bills is nothing new, the heated politics surrounding this year’s federal government funding battle, and the resulting animosity if a government shutdown does materialize, could linger well beyond October and make reaching an agreement on a tax bill all the more challenging.

The Tax Cuts and Jobs Act (TCJA), which was passed in 2017 during the Trump administration, added various tax credits and deductions and made changes to depreciation, expensing, and other tax provisions that affect businesses. Many of these provisions have expired or are expiring in the coming years, or are being gradually phased down. Businesses would like to see them extended. Others are tax provisions that the business community wants to change. Tax provisions expiring in 2024 or 2025 are less likely to be dealt with this year, but House Ways and Means Chairman Jason Smith (R-MO) has introduced legislation restoring and extending provisions that have expired this year and revising some unexpired provisions based on industry input.

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Examining the Impact of Embodied Carbon in Industrial Real Estate

Originally published on September 19, 2023, by Julia Wattick for NAIOP.

Every industry is being challenged to reduce greenhouse gas emissions, especially with the U.S. government’s commitment to combat climate change and increase funding for these efforts. The construction industry has a considerable impact on global greenhouse gas emissions primarily due to its significant contributions to operational and embodied carbon, accounting for 28% and 11%, respectively, of total emissions.

To examine the impact of industrial real estate emissions and reduction strategies, BranchPattern, a national sustainability and engineering firm, recently released its 2023 Benchmark Study on Embodied Carbon in U.S. Industrial Real Estate in partnership with five major industrial real estate developers: Affinius CapitalBridge IndustrialBrookfield PropertiesIDI Logistics, and Prologis. Representatives from these companies are speaking at NAIOP’s upcoming CRE.Converge conference on Oct. 19 about the study’s findings and broader implications of materials selection as an effort to combat climate change. The panel will examine how the real estate industry defines carbon emissions, the typical contributors, and ways to reduce embodied carbon emissions. Read on to learn more about this important topic and why it’s coming to the forefront for building owners and developers.

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Peeling Back the Onion of Capital Markets and Cold Storage Development

Originally published on September 13, 2023 by Kathryn Hamilton, CAE for NAIOP.

“Less than 2% of industrial space today is cold storage, and it probably needs to be at 15%. We’re not even in the first inning,” opened economist KC Conway in a keynote session at NAIOP’s I.CON Cold Storage conference this week in Atlanta.

Using the analogy of peeling back an onion, Conway identified four cold storage and capital markets “layers” to “see what makes us sweat and what makes us cry.”

Layer 1: Federal Open Market Committee (FOMC) Policy. It’s getting harder to refinance out of existing debt, and the Federal Reserve (Fed) hasn’t yet addressed this, he said. There is $1.5 trillion in commercial real estate lending that needs to be refinanced – a significant portion of a $17 trillion industry. And this time, Conway noted, CRE isn’t to blame for overbuilding. Instead, it’s the Fed that has created a capital lockup and made it difficult for CRE to do projections and figure out financing. In the last 18 months, Conway said, we’ve seen the highest, fastest and steepest increases in interest rates in the history of the central bank. Companies and industries with fixed debt are going to see refinancing rates jump from 3-4% to 8-9%.

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Swirling Political Forces Could Derail Passage of Federal Continuing Resolution

Originally published on September 6, 2023 by Eric Schmutz for NAIOP.

Welcome to September! With temperatures starting to cool down, kids heading back to school, and football season kicking off, it’s easy to forget that the federal fiscal year ends at the end of the month. That means that there are only 11 days when both the House and the Senate are scheduled to be in session before the current federal funding authorization expires. Moreover, only one of the annual appropriations bills has passed the House and none have passed the Senate.

In most years, the House and Senate leadership would simply agree to a continuing resolution (CR) that maintains existing federal policy and holds funding at current levels for a certain period to prevent a government shutdown before Oct. 1. Leadership would then negotiate an omnibus package that includes all 12 of the annual appropriations bills, and just when congressional members are desperate to get home for the winter recess, pass it late at night and leave town. 

This year, however, is not following Congress’ standard operating procedure, and is reminiscent of the years when congressional leaders were powerless to rein in the political forces that led to government shutdowns. Republicans hold a slim five-vote majority in the House while Democrats hold a mere one-seat majority in the Senate. Adding to the partisan pressure, President Joe Biden is up for reelection in just over 14 months; former President Donald Trump, the current Republican front-runner, faces multiple indictments on the federal and state levels; and two congressional committees are investigating Biden’s son Hunter’s business relationships with foreign entities to see whether those contracts involved the president. 

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Best Cities for Gen Z: Minneapolis Triumphs as No. 1

Originally published on September 5, 2023, by Matthew Preston for NAIOP.

The diverse Gen Z generation has a wide range of priorities when it comes to choosing a city to live in. Some value affordability while others prioritize education and employment prospects. Still others are looking for a city with abundant recreational activities.

To help Gen Zers identify cities that align with their priorities, CommercialCafe analyzed major U.S. cities across a variety of key metrics. These included the Gen Z population share, educational attainment, affordability, eco-friendly commuting and park density. The results of this analysis created a comprehensive guide for Gen Zers who are looking for a city that values community, cost-effectiveness and sustainability.

MINNEAPOLIS TAKES LEAD AS ULTIMATE CITY FOR GEN Z

Minneapolis is the top city for Gen Z in 2023, and in fact, it already boasts a strong Gen Z population (roughly 10% of residents belong to this demographic) and attracts many others within this age group. Additionally, more than half of its Gen Z inhabitants are enrolled in post-secondary educational pursuits, making Minneapolis an attractive destination for young professionals to chase their career goals. Similarly, a low unemployment rate of 2.6% presents promising job prospects. Finally, the city’s budget-friendly subscriptions to high-speed internet access are especially appealing to the digital nomad types from this age group. 

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RECAP: Candidate Forum: Primary Election for Charlotte City Council

Last week, members of Charlotte’s real estate community spoke with several Charlotte City Council candidates to learn more about their views and how they see the future of Charlotte. Thank you to our event sponsors: Canopy Realtor® AssociationCharlotte Region Commercial Board of REALTORS®NAIOP CharlotteHome Builders Association of Greater Charlotte, Inc. and the Real Estate & Building Industry Coalition (REBIC).

As a reminder, primary elections are on Tuesday, September 12.

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Seattle Office Market: Current Headwinds and Future Optimism

Originally published on August 30, 2023, by Gary Baragona for NAIOP.

The slow recovery of the U.S. economy continues to have an impact on the office market in Seattle as well as across the county. Despite steady job growth and moderate economic recovery gains during the first half of 2023, the Puget Sound regional economy is still struggling and will face continued headwinds during the near term, bringing an enduring sense of uncertainty and concern. According to the Puget Sound Economic Forecaster, regional employment grew by 3.1% in 2022 while job growth is forecasted to increase by an additional 3.3% in 2023 before dipping to 1.5% in 2024. Additionally, the consumer price index was at 8.9% to begin the year, with inflation forecasted to rise by 5.2% in 2023 and 3.1% in 2024.

Despite recent job growth, the Seattle office market is experiencing a steady rise in vacancy, increasing from 5.8% in the second quarter of 2019 to 12.2% at the end of the second quarter of 2022, a 640-basis point jump over just a three-year period. Current vacancies are at a 10-year high and just registered the 12th quarterly increase over the past 14 quarters. One year ago, regional vacancy exceeded the 10% mark for the first time since 2013, and it has now eclipsed 12% for the first time since 2011. Additionally, more than 19% of the current vacancies are from sublease space, which is approximately 18% higher than it was last quarter. The increase was primarily due to an uptick in Eastside sublease vacancies over the quarter.

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Wisconsin City Proposes Transportation Utility User Charge

Originally published on August 16, 2023, by Jim Villa from NAIOP.

Earlier this year NAIOP Wisconsin was made aware that the City of Wauwatosa was looking to fast-track the adoption of a transportation utility user charge or fee (TUF) in order to generate additional revenue for local transportation and infrastructure needs. The city cited the deferred maintenance of their aging infrastructure, fiscal infrastructure constraints set by state funding limits, and an equitable fee structure based on who uses the road for the new fee. The proposal was set to be considered for approval in July. Our concern was that the adoption of the transportation utility fee in Wauwatosa might lead to other cities considering similar unlawful measures for additional revenue.

The transportation utility fee would apply to both residential and commercial properties based on the vehicle traffic generated by the property’s use, and not necessarily their valuations. The city would cap the annual fee at $51.00 for single-family properties with a sliding scale for other properties based on national engineering standards. 

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When Cities Eliminate Parking Minimums, What Happens Next?

Originally published in Summer 2023 by Robert Ferrin for the NAIOP Development Magazine.

Creative solutions and community engagement are crucial when dealing with changes to parking policies.

Minimum parking requirements, which require building owners to provide a fixed number of parking spaces, have played a key role in American municipal policy since the 1920s. Following their widespread adoption in the 1960s, these laws significantly impacted the design of cities and strongly contributed to the growth of a car-centric culture. Today, there are an estimated two billion parking spaces in the U.S., according to a March article in the New York Times.

In 2017, Buffalo, New York, ushered in a new era when it became the first major U.S. city to abolish parking minimums. Minneapolis, Raleigh, San Jose, and others followed. At the beginning of 2023, California became the first state to abolish parking minimums for developments located near public transportation routes.

Affordable housing, transit, and environmental advocates celebrated these policy changes. They point to lower development costs, improved walkability, and increased multimodal transportation, which reduces carbon emissions and vehicle congestion. Together, they can help municipalities meet their climate action goals.

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New Podcast Episode with Mark Rose, Chair and CEO, Avison Young

Originally published on August 21, 2023, by the NAIOP Podcast: Inside CRE.

Mark, meet Marc. Mark Rose, chair and CEO of Avison Young, joins Marc on the podcast for a discussion about building a workplace culture that matters; what his experience tells him about challenges in the current economic climate; the rumor he’s heard about the Fed; and why he “couldn’t be more optimistic” about the office sector. Mark shares recent data about longer-term leases that may surprise you, talks about actively mentoring 14 professionals, and why he believes office space will return to the days when it was a key part of a company brand. Recorded on August 2, 2023.

 

Listen Now

Amenities Have Evolved in Office and Industrial Spaces

Originally published on August 18, 2023 by Paul Bubny for ConnectCRE.

The role of amenities has evolved since the pandemic—not only in the office sector, but in the ever-evolving industrial space as well. To provide an up-to-the-minute look at trends in amenitizing commercial spaces, NAIOP will devote an entire panel discussion to the subject at its CRE.Converge conference, scheduled for Oct. 18-20 in Seattle. In advance of that panel, Connect CRE spoke with two of the panelists—moderator Dawn Riegel, Principal with Ware Malcomb, and Jinger Tapia, VP Design at Ware Malcomb—for a preview. Here’s what they told us.

Q: Would you say that workplace amenities are now more important than they were prior to the pandemic?

Dawn Riegel: In the true office environment, the message I share with my clients is: you want to create a magnet versus a mandate. Meaning you want people to come back into the office and what you are offering them needs to be above and beyond what’s in the four walls of their house. It really is the social aspect for employees. The amenity spaces within office environments, and this does translate to industrial, are super important now more than ever. The hybrid work movement dictates that these amenity spaces be integrated into office spaces from day one.

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2023 Developing Leaders Award Recipients Announced

Originally published in August 2023 by NAIOP.

NAIOP SELECTS FIVE EXCEPTIONAL YOUNG PROFESSIONALS TO RECEIVE 2023 DEVELOPING LEADERS AWARD

NAIOP, the Commercial Real Estate Development Association, has selected five professionals to receive its prestigious 2023 Developing Leaders Award. The annual award honors exceptional professionals under the age of 35 for their outstanding professional accomplishments, strong leadership, and significant community involvement. The winners will be recognized during NAIOP's CRE.Converge 2023, Oct. 18-20, in Seattle. 

“These young professionals stand apart for the vision, leadership, and dedication they bring to NAIOP and commercial real estate,” said Marc Selvitelli, CAE, president and CEO of NAIOP. “We are pleased to recognize their accomplishments and their work in creating vibrant communities in which to work, live, and play. We look forward to a bright future ahead for each of these distinguished leaders.” 

Recipients of NAIOP’s 2023 Developing Leaders Award

NAIOP Survey Provides Insight into Skills Most Important to CRE Development

Originally published on August 3, 2023, by Shawn Moura, Ph.D., for NAIOP.

Finding, training and retaining talent has grown more challenging for commercial real estate development firms in recent years. Baby boomers are gradually aging out of the workforce, increasing demand for younger workers who can take their place. At the same time, technological innovation and an evolving industry constantly shape the skills and duties that are required of commercial real estate professionals. Last year, the NAIOP Research Foundation convened the Talent Development Task Force to examine how industry practitioners and educators can work together to improve career preparation and expand the talent pipeline in commercial real estate. The Task Force recommended that NAIOP survey its members on the skills that CRE employees will need to succeed.

In June, NAIOP surveyed member developers, building owners, investors and asset managers to examine the skills and credentials that are most important to development-related professions. Survey questions were designed to capture the perspectives of both managers and non-management professionals, and to evaluate which skills are most important to early-career and mid-career professionals. The survey focused on the most important soft and hard skills, and perceptions of different types of academic degrees and nondegree credentials. Additional information about respondents will be provided in a subsequent post that discusses respondent perceptions of different degree programs and other credentials.

View Survey Results

Will You Provide Input on Streets and Stormwater Manuals? City Staff Wants to Hear From YOU.

Originally published on August 8, 2023, by Rob Nanfelt the Executive Director for REBIC.

City Staff is seeking feedback on proposed revisions to two important manuals.  Details follow:

  • Charlotte Streets Manual - Staff is proposing amendments to clarify the intent and processes referenced in the UDO.  They include:
  • Stormwater Control Measure (SCM) Design Manual - Charlotte-Mecklenburg Storm Water Services is currently in the process of revising the BMP Design Manual, which will now be called the Stormwater Control Measure (SCM) Design Manual.  Please provide any feedback to Gurveer Uppal by the close of business on Friday, August 18th.

CLT Transportation, Planning, & Development Committee Provides Important UDO Update

Originally published on August 8, 2023, by Rob Nanfelt the Executive Director for REBIC.

During yesterday's meeting of the Transportation, Planning, and Development Committee, Charlotte Planning Director Alyson Craig provided an update on staff activities related to the new Unified Development Ordinance (UDO).  Here's what we know so far about the next round of proposed text amendments:

  •  #2023-093 was filed on June 16th, had a public hearing on July 17th, and will be considered for adoption by the full City Council on August 21st.  This is a minor change and will ensure that homes built before June 1st, 2023, will be allowed as conforming uses in the OFC (office flex campus) and CG (general commercial) zoning districts.
  • Another text amendment (not yet available for public review) was filed at the end of July and would allow multi-family uses in CG (general commercial) and CR (regional commercial) zoning districts.  According to staff, it will include elements of #2023-057 which was denied by Council on May 15th, primarily due to confusion over an attached drive-through provision.
  • One more amendment that has not yet been filed will amend allowed uses in Campus Zoning Districts and may include the addition of a new district.  This has been a major point of contention and we welcome the clarification when it comes.
Also discussed was the May 22nd Council Referral regarding duplexes and triplexes in Neighborhood 1 Zoning Districts.  Staff is contemplating filing a future text amendment that would allow these units to comprise 70% of proposed developments with the other 30% required to be single-family homes located near the property line adjacent to existing neighborhoods.  How these percentages/ratios would be determined - portion of development related to size, number of units, number of structures - has yet to be determined.  Expect to see action on this in early fall.

A tree canopy analysis has been underway for some time and the results will be released in September/October with recommendations to follow.  Apparently, the findings will include significant details including the impact of carbon sequestration, temperature fluctuations, and growth models.  

Alyson Craig's Full Presentation

The Impact of Proposed Air Quality Control Measures in Albuquerque

Originally published on July 18, 2023, by Rhiannon Samuel for NAIOP.

A new proposed rule change to how air quality permits are issued in the Albuquerque metro has many economic development organizations, associations and businesses very concerned. While the goal of protecting vulnerable communities and improving air quality is necessary, we must also carefully consider the impact of rigid regulations on economic development.

Proposed Rule Change: An Overview

In November 2022, several local activist organizations submitted a letter and proposed rule change to the Albuquerque/Bernalillo Air Quality Control Board, aiming to address the concentration of air pollution in low-income and minority neighborhoods. The proposed changes grant the board the authority to enforce greater emission monitoring and reporting requirements than what the Environmental Protection Agency requires on any entity emitting air contaminants. It also circumvents the board’s decision and appeal process to automatically deny certain permit applications. Those triggers to automatically deny applications include areas that will impact an “overburdened community,” where if one characterization is true, then the permit cannot be approved.

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Essential Foundations for Workplace DEI

Originally published on August 1, 2023, by Brielle Scott for NAIOP.

Making progress on diversity, equity and inclusion (DEI) in commercial real estate may be challenging, but the workforce deserves – and increasingly demands – meaningful progress. However, organizations often aren’t sure where to begin.

In the first in a DEI webinar series presented by Trammel Crow Company, Rhonda Payne, CAE, founder and CEO of Flock Theory, introduced foundational concepts and key terms related to diversity, equity and inclusion.

“There is no shame in starting where you are and knowing where you want to go when it comes to your DEI practice,” she said.

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The Most Eco-friendly Office Markets in the U.S.

Originally published on July 25, 2023, by Diana Sabau for NAIOP.

In the post-pandemic office market, the “flight to quality” trend among tenants has been growing alongside increased demands for sustainability. Consequently, demonstrating to clients that a property is equipped with the latest in energy-saving technologies and smart materials is the new standard. And, increasingly, clients are looking beyond their office windows to take a more holistic approach to sustainability, considering factors such as the city’s commitment to reducing carbon dioxide emissions, plans to build electric vehicle infrastructure or the stringency of local building policies.

With that in mind, 42Floors set out to compile a list of the most eco-friendly office markets across the U.S. by ranking cities using eight metrics. Specifically, entries received points for their performances across indicators that rated the local office inventory (including certifications, energy efficiency and materials used), as well as the environment in which the assets are located (like building policies, EV charging stations, public transit and walkability).

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