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Retirees Reshaping Residential

Posted June 18, 2018

Millennials are not the only demographic influencing the housing market; demographers estimate that the age 65-and-over population in the U.S. will double between 2010 and 2060, and this shift will most certainly impact real estate. According to the Curbed article, “The Changing Face of Retirement: Apartment Living, Active Lifestyles and Rural Homes,” retirees want different retirement amenities than previous generations. Traditional retirement communities that are isolated and offer not much more than golf are losing favor to urbanized independent living communities that have “clubhouses, fitness centers, lap pools, and walking trails.” Older adults do not want to be placed on “islands of old age,” the article states, and prefer age integration over segregation in their activities.

Southern US Cities Gaining Population

Posted on June 15, 2018

The U.S. Census’ newest population estimates reveal that eight out of the 15 U.S. cities with the largest population gains are in the south, with three of the top five located in Texas. San Antonio topped the list with an increase of just over 24,000 people between 2016 and 2017. Some of the other cities with the largest population gains were Phoenix, Arizona (24,000); Dallas, Texas (18,900); Fort Worth, Texas (18,700); Los Angeles, California (18,600); Seattle, Washington (17,500); and Charlotte, North Carolina (15,600). Fort Worth, Texas, surpassed Indianapolis, Indiana, to become the fifteenth-largest city in the U.S., with a population of 874,168. The list of the top 14 largest U.S. cities has not changed since 2016.

Tackling the Trucking Pain Point

Posted on June 14, 2018

Trucking moves about 70 percent of freight in the United States. The boom in e-commerce transactions has increased volume, which requires speed and accuracy in freight shipping. However, according to a C3 Solutions white paper, Leveling Up: Navigating the New Trucking Landscape, the trucking market has been at 100 percent capacity since 2004, resulting in driver shortages and rejected orders. Additionally, new regulations that address driver and food safety have further constrained delivery times. The report encourages trucking companies to seek solutions by diversifying their workforce (the industry is 94 percent male), and advises shippers to reduce driver time spent at drop-off facilities, use technology for better scheduling, and maintain good relationships with carriers. The researchers state autonomous or semi-autonomous trucks will help alleviate shortages, but implementation is still years away. The report concludes: “While the capacity crisis may be unprecedented, there are many operational improvements you can make to ease the pain it is causing your business. Making changes to adapt to the new [trucking] landscape should not be seen as an 'if', but rather a 'when'."

Cannabis Industrial REIT Revenue Up

Posted on June 13, 2018

Innovative Industrial Properties (IIP), a Maryland-based REIT specializing in the acquisition, ownership and management of industrial properties leased to medical cannabis facilities, reports in New Cannabis Ventures that its revenue jumped 107 percent in the first quarter of 2018. Rental revenues were approximately $2.7 million in the quarter, with a net income of $607,000. The company owns six properties located in Arizona, Maryland, Minnesota, New York and Pennsylvania totaling 706,000 rentable square feet, which were 100 percent leased at the end of Q1 with an average remaining lease term of 14.4 years. IIP recently acquired an 89,000 square foot medical-use cannabis cultivation and processing facility in a sale-leaseback transaction with a subsidiary of Vireo Health, Inc. Pennsylvania for “an aggregate consideration of $8.6 million (excluding transaction costs), which includes an approximately $2.8 million tenant improvement allowance available for additional improvements at the property.”

San Francisco Regulates Electric Scooters

Posted on June 12, 2018

The lack of regulation on dockless electric scooters has led to the devices being left on sidewalks and in front of building entrances, creating safety hazards in U.S. cities. To address this issue, San Francisco recently passed an ordinance establishing a regulation and permitting process for rentable scooters. Fortune reports that the San Francisco Municipal Transportation Agency has approved a one-year pilot program that will grant permits to five scooter companies. The permit cap “sets the stage for existing scooter operators Bird, Lime, and Spin—as well as host of other newcomers—to battle it for a chance to operate in the city.”

Top Office Obstacles: Parking and Technology

Posted on June 11, 2018

According to a new Cushman and Wakefield report, Space Matters: Key Office Trends and Metrics, two important trends in office space include technology amenities and parking. Common amenities – such as fitness centers and cost-effective food options – remain very important but there is ample opportunity for growth in how technology-related amenities are leveraged by occupiers and landlords. Despite advances in technology, researchers found many office building owners continue to struggle with some of the most basic offerings such as seamless, high-speed internet and cellular service.

In many urban submarkets, parking supply is a challenge and high prices have been forcing innovative solutions. According to the report, the predominant reason people utilize ride-sharing services such as Uber and Lyft is to avoid parking. In some cases, this has led owners to provide valet or shuttle services to connect offices with off-site parking, including garages in different parts of a city.

See NAIOP's Strategic Direction

Posted on June 8, 2018

NAIOP's 2018-2020 Strategic Plan will guide the activities of the association, focusing on five Strategic Drivers that center around NAIOP's mission and vision, including:

  • Talent Development 
  • Vetted Knowledge 
  • Policy & Regulation 
  • Chapter Relations 
  • NAIOP Resiliency

NAIOP members can access each Strategic Driver and view the initiatives for each below.

Mission 

What We Do

NAIOP provides advocacy, education and business opportunities by connecting members in a powerful North American network in the commercial real estate development and investment industry.

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Elevating Workplace Architecture and Design

Posted on June 7, 2018

By Marie Ruff

Office architecture and design have incorporated various popular influences in recent years: smart office tools, the open-ceiling industrial-chic aesthetic, and the “experiential office” trend, to name a few. The field has been slower, however, to adopt findings from positive psychology into office form and function.

Positive psychology, the scientific study of the condition and strengths that enable individuals and communities to thrive, provides tools that can be used to enhance worker’s well-being, said architect Charles First, AIA, CCM, CFM. In his recently published book, “A Place to be Happy: Linking Architecture & Positive Psychology,” First drew from his more than 30 years as a registered architect with experience in architecture, project management and owner-side office culture.  The book incorporates results from his own workplace studies, and along with findings from researchers across the U.S., establishes criteria for shaping spaces for the benefit of the people who work there.

Click here to read more.

New Login for www.NAIOP.org

Posted on June 7, 2018

With a new database launch, you now have a different member login.  This powerful new database will provide a more user-friendly experience for all members, making it easier for you to update your member profile, register for courses and conferences, and more.  Watch for an email with your new www.NAIOP.org website login and update your profile.

Note:  this does NOT effect your local NAIOP Charlotte login.

NAIOP NC Visits Raleigh

Posted on June 6, 2018

On May 30, 2018, the three chapters of NAIOP North Carolina, visited capitol hill to advocate.  A special thanks to Jason Moore (Charlotte Legislative Committee Chair) and Joe Padilla (REBIC) for helping coordinate visits with legislators to speak about the commercial real estate perspective.  While this is a short session (this means the time of the session is short, but also that new legislation cannot be introduced), it is of critical importance the state senators and representatives know who NAIOP is and what we represent. 

The key areas of discussion are around regulatory reform, economic development and tax reform.  To view the NAIOP NC 2018 Legislative Priorities, click here.  A special thanks goes to the following legislators that took their time to meet with us directly:

  • Chris Thomas
  • Jason Moore
  • George Lyles
  • Jim Gamble
  • Tim Robertson

   

New Office Space Demand Forecast: Signs of a Structural Shift

Posted on May 31, 2018

The NAIOP Research Foundation has published the NAIOP Office Space Demand Forecast for Q2 2018.

Key Takeaways

  • The U.S. office markets absorbed just 1.3 million square feet on a net basis in the first quarter of 2018, according to CBRE. 
  • This performance represents a significant conundrum, as every economic indicator used to forecast absorption performed at or above the forecast level. 
  • While the first quarter reading may be a one-time anomaly, it cannot be discounted that a structural shift in the office space market has or is occurring
  • The forecast for net absorption of office space has been reduced to 8.4 million square feet per quarter for the remaining three quarters of 2018.

On a positive note, many developers, lenders, and even tenants are not over-expanding or being overactive, meaning that there is a low likelihood that there will be excess space that they will need to vacate in a downturn.

View the Q2 2018 Forecast

Amazon Tells Cities Why They Failed to Qualify for HQ2

Posted on May 25, 2018

The Wall Street Journal recently reported that Amazon.com Inc. has made about 200 phone calls to cities which failed to make the cut for consideration as a location for the company’s second headquarters. Some of the cities say they are "learning from the disappointing phone conversations and making changes." For example, Detroit is now considering strengthening its regional transportation network after Amazon officials told them it was the main reason the city did not make the HQ2 short list. The city did not have enough tech workers to fill 50,000 jobs and had no way, other than cars, of bringing people from outside the city limits to work at the proposed site. Additionally, Cincinnati, Ohio, and Sacramento, California, are restructuring workforce development programs to focus on tech talent. Orlando, Florida, is considering starting a community fund to invest in local tech companies and draw more entrepreneurs.

Traditionally when bargaining with big companies, according to the article, the site selection process is negotiated without fanfare, among a company, their consultants and local government. The "highly visible" Amazon process is forcing cities to explain why they did not reach the second round and address those weaknesses. "It is a kind of look-in-the-mirror moment," said Joseph Parilla of the Brookings Institution. Other experts warn cities should not operate at the behest of large companies and should instead establish their own priorities.

Retail Outlook for 2018: Changes and Opportunities

Posted on May 24, 2018

According to Cushman and Wakefield’s first quarter report on shopping centers, the retail sector will continue to struggle despite a strong economy. However, it’s not all bad news – while stores found in malls and power centers (e.g., electronics, department, sporting goods) will continue to decline, other sectors will expand, such as dollar stores, discount grocery, off-price apparel, beauty/cosmetics, fitness/health clubs, fast food, coffee and fast fashion, most of which operate in neighborhood and community centers. According to the report, these trends could benefit the owners of Class A malls. "Anchor closures at trophy or Class A malls present opportunities for landlords to attract new, more relevant tenants such as food halls, experiential concepts or other trendy new retailers at current rents," the report states. "Landlords will also see non-traditional mall tenants such as discounters, off-price or grocery chains move into some of these vacancies."

Banking Bill Includes HVCRE Revisions

Posted on May 25, 2018

Yesterday, President Donald Trump signed the Economic Growth, Regulatory Relief, and Consumer Protection Act into law. This reform legislation includes NAIOP-supported provisions that ensure there is adequate capital availability for commercial construction financing.

The bill requires banking regulators to revise elements of the current High Volatility Commercial Real Estate (HVCRE) designation that unfairly targeted commercial construction lending, including:

  • Allowing commercial borrowers to use the appreciated value of contributed land, rather than the original cost as under the prior rule.
  • Limiting the application of the HVCRE classification by clarifying that loans made to acquire existing property with rental income would not be subject to higher capital requirements.
  • Allowing banks to remove the HVCRE designation prior to the end of the loan.

Revision of the HVCRE designation was an important element of NAIOP's 2018 agenda, and enactment of this important legislation is a major victory for NAIOP's members. We commend the president and the bipartisan coalition of lawmakers who worked to deliver this measure.

From Blighted Brownfield to Thriving Infill Industrial Park

Posted on May 23, 2018

By: Bill Mosher and Ann Sperling

All photos courtesy of Trammell Crow CompanyLong-term planning and collaboration among various partners across multiple jurisdictions have been key to creating a new industrial park in Denver’s Globeville neighborhood.

More than a century ago, the Asarco Globe Plant was operating as a metal smelting facility, employing nearly 3,000 Coloradans in Denver’s culturally rich Globeville neighborhood. Over the years, an array of industrial processes and uncontrolled disposal on-site contaminated the groundwater and soil with heavy metals. This contamination resulted in the property being identified as a brownfield site, and decades of investigation and remediation began.

When Asarco finally closed the plant entirely in 2006, the community was left with a blighted, abandoned and fenced 77.5-acre site. Land developer EnviroFinance Group LLC (EFG), working closely with the Colorado Department of Public Health and Environment (CDPHE), the U.S. Environmental Protection Agency (EPA), and Adams and Denver counties, managed the site’s environmental cleanup, achieving regulatory closure in June 2015. (Ongoing monitoring will continue for several more quarterly testing periods.)

Click here to read more.

Cities as a Service

Posted on May 22, 2018

Listen to the audio recording of Greg Lindsay, NewCities Foundation Senior Fellow and keynote at the National Forums Symposium, on how cities as a service are changing how we live, work, move and more, watch the video (see below), or read the recap on NAIOP’s Market Share blog.

Less than a decade ago, Uber, AirBnB and WeWork didn’t exist. Today, one is worth more on paper than Ford Motor, another more than Hyatt, and the third more than Boston Properties. Why? The short answer is that there’s an app for all that, but the truth is more complicated — how and where we live, how we move, and how we work are all being disrupted.

Click here to read more.

How Electric Bike Share Will Change the Commuting Game

Posted on May 21, 2018

By: Rachel Karitis

If you live in an urban area like Washington, D.C., or San Francisco, then you’ve probably seen the Skittles rainbow-colored bikes taking over the sidewalks. What you might not know is the specifics of how they work, and how this service could revolutionize the office commute.

Bike sharing as we have come to know it has tended to be city-funded (sometimes in conjunction with private companies) and presented in the form of expensive-to-install docks of bikes. Recently, there has been a veritable boom of private startups looking to make bike sharing profitable. These bikes do not need to be returned to stations, and instead can be picked up and left anywhere within city limits.

Click here to read more.

RECAP: Tax Revaluation and Tax Reform

Posted on May 10, 2018

On Wednesday, May 9, 2018, NAIOP Charlotte hosted a form for more than 90 people on the upcoming Mecklenburg Tax Revaluation and the impacts of Federal Tax Reform on Commercial Real Estate.  A special thanks to our speakers:  Bobbi Jo Lazarus, Elliott Davis, Ken Joyner and Christy Lantis, both from the Mecklenburg County Tax Assessors. 

The rates and structures of taxes are changing and impacting commercial real estate dramatically.  Each presenter encouraged commercial real estate firms to become educated on the opportunities and impacts for their properties and organizations.  Click below to view the PowerPoint presentations.

  • Tax Reform by Bobbi Jo Lazarus, Elliott Davis
  • Tax Revaluation by Ken Joyner, Mecklenburg County Tax Assessors Office (updated May 2018; data within may change over time as the revaluation is a work in progress)
Click here to view photos from the event.

Supreme Court Considers Changing Internet Sales Tax Policy

Posted on May 4, 2018

The Supreme Court is expected to issue a decision by the end of June in South Dakota v. Wayfair, Inc., et al, a case that could change how sales taxes are collected on Internet purchases.

Two years ago, South Dakota passed a law that would require out-of-state companies to pay sales taxes if they sold more than $100,000 worth of goods or made 200 separate sales transactions in the state. The law was designed as a direct challenge to the Supreme Court’s 1992 ruling in Quill Corp. v. North Dakota, which blocked states from collecting sales taxes from Internet retailers if those retailers don’t have a store, warehouse or sales staff physically present in the state.

NAIOP supports the collection of existing sales and use taxes from online retailers that are already owed to state and local governments. Not doing so puts brick-and-mortar retailers at a disadvantage to out-of-state vendors whose purchasers can avoid taxes.

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How to Set Up a Private Equity Real Estate Fund

Posted on May 3, 2018

By Jan A. deRoos, PhD and Shaun Bond, PhD

How does one go about creating a partnership to raise equity for ongoing real estate investment?

THIS ARTICLE INTRODUCES the contemporary structure of private equity real estate funds and outlines the steps necessary to create and properly manage a fund. It discusses the motivations for creating a fund and the factors that should be considered when setting one up. A future article will examine how securities laws impact the offering and management of a fund, as well as typical offering terms.

In its simplest form, a real estate private equity fund is a partnership established to raise equity for ongoing real estate investment. A general partner (GP), henceforth referred to as the sponsor, creates the fund. The sponsor asks investors, known as limited partners (LPs) to invest equity in the partnership. Those funds, along with money borrowed from banks and other lenders, will be invested in real estate development or acquisition opportunities.

Click here to read more.