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.

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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.

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Posted on April 12, 2018

About The NAIOP CRE Sentiment Index

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 and operators. 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 10, 2018

According to Curbed, the 2.3 billion square feet of self-storage space in the United States could "fill the Hoover Dam with old clothing, skis, and keepsakes more than 26 times." Trends including baby boomer retirees downsizing, small businesses storing excess inventory, and millennials living in small spaces have contributed to a record-setting boom in the self-storage industry. The article cites industry experts who believe self-storage may be at its peak, and forecast a slowdown due to overbuilding in Phoenix, Arizona; New York City; and Orange County, California. Some critics have pointed out that self-storage spaces are crowding out other more productive land uses; land that could be better used for "commercial, industrial and even residential purposes." Meanwhile, China and much of Southeast Asia are catching up to the U.S. in demand for spare space and emerging as "massive growth markets."

Posted on April 6, 2018

By: Marie Ruff

In 1936, The New York Times claimed, “A rocket will never be able to leave the Earth’s atmosphere.” In 1943, the chairman of IBM said, “I think there is a world market for maybe five computers.” Advances and tools that once seemed impossible are now commonplace – from flying in a commercial airplane to holding a device as powerful as a computer in the palm of your hand.

At CRE.Insights: The Last Mile, speaker David Schwebel, senior director of business development with Swisslog Technology, began his session on the automated age of industrial with these premises:

1. Change is constant.
2. Things don’t always go as you expect them.
3. You will be wrong more than you are right.
4. When you become right, it changes the world.

Click here to read the full article.

Posted on April 5, 2018

By: Aaron Ahlburn, JLL

Supply chain advances and new technologies are affecting how, where and what types of industrial facilities are being built.

Much of the media coverage of industrial real estate today is overwhelmed by e-commerce oriented topics. Retailers continue to build out their delivery, fulfillment and return capabilities, in ways that are having significant impacts on the industrial supply chain and, consequently, on the location and design of buildings. E-commerce is undoubtedly driving significant change within the industrial property sector, but real estate developers and investors should also consider a variety of other disruptions and structural shifts.

These include key changes being made along the supply chain and how those changes are affecting where and how new industrial facilities are being developed today, as well as where and how they will be developed in the future.

Click here to read the full article.

Posted on March 26, 2018

By Dr. Stephen S. Fuller

Development and construction of new commercial real estate in the United States – office, industrial, warehouse and retail – generates significant economic growth at the state and national levels. This annual study, “The Economic Impacts of Commercial Real Estate,” published by the NAIOP Research Foundation, measures the contribution to GDP, salaries and wages generated and jobs supported from the development and operations of commercial real estate.

Commercial real estate development and operation of existing buildings generated the following economic benefits:

• Supported 7.6 million American jobs in 2017 (a measure of both new and existing jobs).
• Contributed $935.1 billion to U.S. GDP.
• Generated $286.4 billion in salaries and wages.

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Posted on March 23, 2018

By Marie Ruff

Every click of an e-commerce order kicks off a series of actions that lead to the delivery of your package from a warehouse to your house – and the final stretch of that process is the most expensive part. “People expect to order anything, anytime, and have it delivered anywhere they want it. It’s a challenge for our infrastructure,” said Gregory Healy, Colliers International executive managing director, supply chain and logistics, during his keynote address at NAIOP’s CRE.insights: The Last Mile conference this week.

Click here to read more.

Posted on March 22, 2018

By Robert T. Dunphy

Some of these innovations may change how freight is moved in the future.

While public interest in transportation focuses largely on commuting and personal travel, much of the future growth in transportation demand will involve moving freight rather than people. Some extraordinary technological developments in this area are already underway. Innovations currently under development include the following.

1) Truck Platooning. Fuel and safety are one of the biggest concerns in the trucking industry. Being able to connect two or three trucks together in a “platoon” reduces the distance between them to as little as 20 feet, allowing a following truck to take advantage of fuel-saving aerodynamics as it coasts in the wake of the lead truck. Peloton, an automated vehicle technology company that has developed a platooning system, estimates that cost savings could be approximately 10 percent for the second truck and 4.5 percent for the lead truck in a platoon. The company may have paired trucks on the road as early as 2018, according to an October 22, 2017 Washington Post article.

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Posted on March 21, 2018

By Ioana Neamt

With all the talk of the modern workforce expecting autonomy and companies offering flextime and work-from-home arrangements, most U.S. companies still try to get employees to show up at the office. So naturally, there is ongoing interest in the discussion about the most efficient and pleasant work environment and what that might look like. Over the decades, we’ve seen several attempts by designers to rethink the office space, from Herman Miller cubicles, to the rather controversial open-plan layout and the currently highly-sought-after co-working trend. Companies have several motivations for trying out new layouts: cost-effectiveness, the need to expand quickly following a growth in the number of employees, the desire to have an office design that reflects the company culture, and so on. However, there is still one question left unanswered: what do employees have to say about their workspaces?

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Posted on March 20, 2018

Recruiting and retaining top performers has become essential in today's highly competitive marketplace. It's not too late to find out if your salary and bonus package is competitive with the 2017 NAIOP/CEL Commercial Real Estate Compensation and Benefits Report.  

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Posted on March 15, 2018

According to a VTS blog post, The Rise of the “Urban-Suburban” Office Market, many companies want their offices to be in dynamic locations that appeal to young professionals, but that no longer means only downtown markets. Suburban office construction was strong throughout 2017, but the markets that will fare the best will have “urban-type” amenities such as walkability, public transit, a variety of housing options, retail and restaurants. The article warns, “Owners and developers of suburban office buildings that don’t embrace this urban-suburban ‘vibe’ might find it tougher to justify new developments or sign new tenants. Simply offering big office buildings and huge surface parking lots are not often enough to draw companies today. It’s more about creating a mixed-use destination.”

Posted on March 14, 2018

By: Dr. Stephen S. Fuller

Development and construction of new commercial real estate in the United States – office, industrial, warehouse and retail – generates significant economic growth at the state and national levels. This annual study, “The Economic Impacts of Commercial Real Estate,” published by the NAIOP Research Foundation, measures the contribution to GDP, salaries and wages generated and jobs supported from the development and operations of commercial real estate.

Commercial real estate development and operation of existing buildings generated the following economic benefits:

• Supported 7.6 million American jobs in 2017 (a measure of both new and existing jobs).
• Contributed $935.1 billion to U.S. GDP.
• Generated $286.4 billion in salaries and wages.

Click here to read more.

Posted on March 12, 2018

Transportation Secretary Elaine Chao says details about the Trump administration’s infrastructure plan should be coming out soon. The goal of the plan is to spend roughly $200 billion in federal funds and generate $1.5 trillion in spending by state and local governments and private investors for transportation, energy, water and other infrastructure projects.

Government investment in infrastructure is a priority issue for NAIOP in 2018. Last month, NAIOP President and CEO Tom Bisacquino wrote an op-ed for Fox News, reminding readers: “In the real estate industry, infrastructure encourages development. People are more likely to develop property, start businesses and choose to live where the roads, bridges, ports and power grid are dependable.”

Last week, Chao told the American Association of State Highway and Transportation Officials that the plan’s guiding principles are:

Posted on March 9, 2018

By: Dr. Joshua Harris

Industrial Demand to Remain Strong as Market Becomes Undersupplied

Demand for U.S. industrial space is expected to remain robust and steady throughout 2018, with quarterly net absorption forecast to average 55.6 million square feet. This is higher than the 44.1 million square feet of actual net absorption, on average per quarter, recorded in 2017, but lower than the 60 million square feet of quarterly net absorption forecast six months ago. According to Dr. Hany Guirguis, Manhattan College, and Dr. Joshua Harris, New York University, the predicted increase over 2017 figures is due to the faster and broader macroeconomic growth and increased consumer spending expected in 2018.

The model, run on a quarterly basis, forecasts slightly lower industrial space demand in 2019, when inflation and interest rates are expected to rise, moderating growth. U.S. gross domestic product grew by 2.6 percent in the fourth quarter of 2017, according to the advance estimate released by the U.S. Bureau of Economic Analysis, and by 2.3 percent for all of 2017. (For comparison, U.S. GDP grew by just 1.5 percent in 2016.) Sustained growth, especially with low unemployment at 4.1 percent as of January 2018, will translate into increasing demand for industrial properties as industrial users see more justification for investment and expansion of facilities.

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Posted on March 8, 2018

An analysis by the McKinsey Global Institute summarized in the Harvard Business Review concluded increasing consumer demand for goods and services is key to restarting growth across advanced economies. U.S. economic growth has averaged only 2 percent per year since 2010, while productivity growth, a key to increasing living standards, has been “languishing near historic lows since the financial crisis.” The report cites slowing population growth, flat wages and weak corporate investment as contributing to lower demand. This trend can be potentially reversed by “focusing on productive investment as a fiscal priority, growing the purchasing power of low-income consumers with the highest propensity to consume, unlocking private business and residential investment, and supporting worker training and transition programs to ensure that periods of transition do not disrupt incomes.”

Posted on March 7, 2018

With capacity challenges mounting in numerous basins across the City, Charlotte Water is taking steps to assure developers they’ll have the sewer taps for their projects when the need arises.

Charlotte Water announced this week that it will now be extending its capacity reservations from 12 to 24 months, effective for all connection applications approved on or after January 1st, 2017.  As a result, there will be no expiring capacity reservations for 2018.

The Capacity Assurance Program (CAP) started in 2017, as a way for developers to reserve sanitary sewer capacity after a capacity review is completed and a connection is approved. The program reviews the capacity of the system from the point of connection through the local gravity system, through trunk lines and eventually to the wastewater treatment plants. It ensures that new connections to wastewater treatment system won’t overwhelming existing pipes and plants. 

Posted on March 7, 2018

Architect and Work Design magazine publisher Bob Fox has identified seven major trends that he predicts will make an impact on the workplace in 2018. To attract and retain top talent, he believes businesses will create health-oriented workplaces that offer a sense of community through wellness programs and collaborative projects with other building tenants. Fox also sees the rise of “resimercial” office designs that bring the comforts of home into work and can accommodate a broader range of functions. Other trends Fox predicts include office designs that reflect the companies’ missions, the prioritization of overall value rather than cost reduction when redesigning space, the use of virtual assistants, and women leading change to create healthier, higher-performing workplaces.