Originally published by NAIOP Research Foundation on February 22, 2021.

Strong Growth in Demand for Industrial Space

The NAIOP Research Foundation has published the NAIOP Industrial Space Demand Forecast or Q1 2021.

Key Takeaways

Originally published in NAIOP E-Newsletter on February 2, 2021. 

Watch NAIOP's State of the Association hear a recap of 2020, preview NAIOP's legislative priorities, and learn what’s next for the association as we journey through 2021.

The last 12 months have been filled with unexpected challenges and a pandemic none of us could have imagined. It impacted our lives and our industry in countless ways, from how we operate our businesses to tenant demand and use of space.

We anticipate a steady readjustment to a post-pandemic world, with a deep examination of how office, industrial, retail, and other shared spaces will be reimagined. These changes can be viewed as opportunities. The CRE industry continues to modernize and adapt as we create new strategies that will help us succeed.

North Carolina is the #8 state in the U.S. for contributions to state GDP created by retail/entertainment real estate development. Overall, the construction and development of office, industrial, warehouse, and retail created and supported 67,041 related jobs and contributing $8.99 billion to the state’s economy in 2020 (the most recent data available).

The data is from “Economic Impacts of Commercial Real Estate, 2021 U.S. Edition,” published annually by the NAIOP Research Foundation.

New development and ongoing operations of existing commercial real estate buildings in the United States – office, industrial, warehouse, and retail – generates significant economic growth at the national level:

• Created and supported 8 million American jobs in 2020.
• Contributed $1.01 trillion to U.S. GDP.
• Generated $338.1 billion in salaries and wages.

“Many factors point to a commercial real estate rebound in 2021,” said Thomas J. Bisacquino, president and CEO of NAIOP. “Obviously, we dealt with several unknowns and unexpected challenges in 2020. The pandemic accelerated trends already progressing in real estate. The warehouse sector has flourished as e-commerce demand intensified; office space has been impacted by tenant demand, as remote work options expand and companies rethink space needs; and the retail sector struggled as shoppers preferred to buy online. Nonetheless, commercial real estate construction and development sectors remain solid, valuable contributors to the U.S. economy, and we have a bright future as the economy continues to improve.”

Originally published by the NAIOP Research Foundation on February 3, 2021.

The NAIOP Research Foundation has published its annual Economic Impacts of Commercial Real Estate, 2021 U.S. Edition.

Commercial real estate development and operation of existing buildings generated the following economic benefits in 2020:

• Supported 8.0 million American jobs (a measure of both new and existing jobs).
• Contributed $1.01 trillion to U.S. GDP.
• Generated $338.1 billion in salaries and wages.

Key measures impacting economic growth in 2021 include:

The City of Concord is updating their UDO – Read more

Kannapolis is updating their UDO – Read more

Originally published on behalf of NAIOP Research Foundation on November 19, 2020. 

Negative Absorption of Office Space Expected to Continue in Short Term, Trend Positive Beginning Q2 2021

The NAIOP Research Foundation has published the NAIOP Office Space Demand Forecast for Q4 2020.

Key Takeaways:

• Given the continued challenges facing the U.S. economy, office net absorption is forecast to be negative 18 million square feet in Q4 2020 and negative 10 million square feet in Q1 2021.
   
• Growth in net absorption is forecast to resume in Q2 2021, and the total net absorption over the period from Q2 2021 to Q3 2022 will exceed negative absorption from the recession, resulting in overall gains in absorption over the next two years.
   
• The largest office-using industries have been more insulated from the effects of the pandemic than the economy as a whole, but their shift to remote-work arrangements has diminished demand for office space.
   
• Multiyear lease terms have mitigated the effects of reduced occupancy on vacancy rates, which have risen to 14% in the third quarter. Vacancy rates are likely to continue to rise through the end of 2020 as more leases come up for renewal.

View the full report.

Originally published by Marc Stiles on November 5, 2020, for Puget Sound Business Journal 

The tech-fueled evolution of industrial real estate is creating opportunities for underused assets, large and small. The possibilities seem almost endless.

Read More.

Originally published on November 17, 2020 in NAIOP's E-Newsletter.

The new 2020 NAIOP/CEL Commercial Real Estate Compensation and Benefits Reports are now available for purchase online. Each includes salary, bonus, incentives, and benefits for up to 200 positions, and data from 100,000 distinct jobs in the office/industrial, retail and residential property sectors. Data is sortable by company size, type, specialization and more.

Read More

Originally published on November 10, 2020, by NAIOP Source Weekly E-News.

Is your 2021 salary and bonus package competitive? Find out with the 2020 NAIOP/CEL Commercial Real Estate Compensation and Benefits Reports.

These valuable reports enable commercial real estate businesses to stay current on salaries, bonuses, and benefits for CRE professionals from executives to entry-level positions.

The reports include:

Join us on Monday, July 27th as we hear a panel of experts discuss the present state of lending from different lenders’ perspectives on the present commercial lending environment. Submit questions for the panel in advance here.

Panelists

• • Scott Cook, Commercial RE Market Manager, TD Bank 
  • Anthony Fertita, Senior Managing Director, JLL 
  • Welch Liles, Director – Development, Asana Partners (Moderator) 
  • Brad Smith, Commercial Real Estate Banking Market Executive, Bank of America 

Registration

Registration for members will be free and $15 for non-members through July 22. Beginning July 23, the registration fee will increase to $10 for members and $20 for non-members. Prior registration is required.

Primary Markets, Gateway Cities, Tier 1 Metros – we’ve all heard of them, and many commercial real estate professionals use them to group cities and markets together. Are these terms simply describing the flow of capital, or directing investment away from opportunities in other cities? How do they differ for commercial, industrial or residential properties? This webinar will share takeaways from a recent report from the NAIOP Research Foundation and discuss conclusions on the definitions, uses, advantages and disadvantages of sorting and ranking markets into tiers.

Speakers: 
Maria Sicola
Co-founding Partner, Citystream Solutions

Charles Warren, Ph.D.
Co-founding Partner, Citystream Solutions

Megan Weiner
Managing and Co-founding Partner, Citystream Solutions

Click Here to Register

The NAIOP Research Foundation has published the NAIOP Office Space Demand Forecast for Q2 2020.

Key Takeaways:

• Due to the turmoil in the national economy, rising unemployment and continued uncertainty about future work arrangements, the U.S. office market absorption is forecast to decline into negative territory through the second quarter of 2021.
   
• The steepest declines may be experienced in the third quarter of 2020, with NAIOP's model forecasting a drop of 16.3 million square feet. Absorption rates will increase as the economy begins to gain traction in 2021.
   
• While the economic benefits of density and agglomeration are well-documented, COVID-19 may necessitate a type of "de-densification" in office space, at least in the near term. As a result, current office-using space will face short-term logistical challenges.
   
• While U.S. states begin the process of a staged re-opening, employees will arguably put a premium on workplace cleanliness. They will also put a premium on personal space, which may contribute to increased demand for office space.
   
• Many large organizations have begun to consider a "hub-and-spoke" model for work arrangements, enhanced by technology that allows for the economic gains from agglomeration while recognizing the challenges created by the pandemic.

NAIOP is again partnering with CEL & Associates, Inc. to compile the 2020 NAIOP/CEL Commercial Real Estate Compensation and Benefits Survey. A nationally known real estate advisor, CEL has conducted this survey – the largest in the industry – for 31 consecutive years.

Complete the survey by Friday, April 24th.

Take the Survey

Join NAIOP Charlotte on Tuesday, March 24th at 2-2:30 p.m. ET for The Advantage Series is an exclusive member benefit, delivering expert insights into the latest research to help you make informed business decisions.

Repercussions from the ongoing COVID-19 pandemic are far-reaching and still quite unknown, but one thing is for certain: the impact on commercial real estate will be substantial. A week ago, CRE fundamentals were solid; will that improve our recovery timeline? What do experts see for the potential future of the industry? How do you recognize a deal today, and know whether it’s better to act quickly or hold? The questions are numerous, and NAIOP is here with guidance to support you today and get you thinking ahead for tomorrow. Have a question for our speakers? Submit it now.

Speakers:
Larry Lance, Executive Vice President-Asset Services, EverWest Real Estate Investors, and 2020 NAIOP Chairman
Al Pontius, National Director of Office & Industrial, Marcus & Millichap
John Chang, National Director of Research Services, Marcus & Millichap

Click Here to Register

Posted on December 6, 2019

The NAIOP Research Foundation has published the NAIOP Office Space Demand Forecast for Q4 2019.

Key Takeaways:

• The U.S. office market continues to perform as expected, with an average of 14.7 million square feet absorbed per quarter in 2019.
   
• The forecast for the remainder of 2019 and 2020 remains strong at an average of 13.2 million square feet absorbed per quarter in 2020 and 12.7 million square feet per quarter in 2021.
   
• At present, the economy – and thus the office markets – are expected to remain in an upcycle for at least the next 18 months.
   
• The effects of the WeWork situation are likely to be isolated to a small set of markets and will not broadly impact the national office market. The company's inability to expand may generate more demand for direct leases in some markets, but overall, coworking appears to be a long-term trend, and the forecast will likely resist any short-term impacts caused by WeWork's recent troubles.

Firms might slow their expansion plans in 2020, reducing the need for new office space, in reaction to overall fears of a slowdown. Still, most measures of consumer health, including wage growth, job growth and consumption expenditures, remain strong.

View the Report

Posted on November 25, 2019

By Amanda Abrams

When Research Triangle Park in North Carolina opened in 1959, its bucolic setting was considered a major selling point. With office buildings hidden behind grassy meadows and swaths of pine forest, the quiet development was viewed as a perfect spot for the thinkers who went to work at companies like IBM and RTI International.

Posted on November 15, 2019

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, 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.

Posted on October 7, 2019

The NAIOP Research Foundation has published a new report titled "Profiles in the Evolution of Suburban Office Parks," by Dustin C. Read, Ph.D./J.D.

The author interviewed five developers who have recently updated suburban office parks in the United States and Canada to learn how they made these properties relevant for today's market.

Key Takeaways:

• Redeveloped office parks must fit the preferences of the local workforce and the needs of local employers.
• Developers should seek to understand local officials' priorities.
• Developers should build flexibility into their plans and partner with creditors who understand that they may need to adapt to unforeseen circumstances.
• Developers can maximize the value of their improvements by leveraging design, technology and amenities to develop a property's identity and build community.
• Rebranding is often a critical component of a successful redevelopment strategy.

 Read the Report.

Posted on October 1, 2019

By Shawn Moura

In recent years, builders have faced a shortage of workers that has only grown more acute amid increasing demand for construction and record-low unemployment. Many of the 2.2 million construction workers who lost their jobs during the last recession either retired or found employment in other industries. At the same time, fewer new workers are taking their place because millennials are less attracted to careers in construction than past generations. Workers under the age of 25 make up only 9.0% of the construction workforce in the United States versus 12.3% of the nation’s overall workforce, according to data from the Bureau of Labor Statistics.

A report published by the NAIOP Research Foundation in July , “Addressing the Workforce Skills Gap in Construction and CRE-related Trades,” examines how employers are partnering with local communities in innovative training and recruitment programs to boost the supply of skilled construction workers in both urban and rural areas.