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Join NAIOP & Receive FREE On-Demand Courses Through August 1

NAIOP provides critical commercial real estate education, connections and advocacy that help our members’ businesses and the industry advance. Members benefit from the resources and networking provided by both NAIOP Charlotte and the 20,000-member-strong North American association. Take advantage of the full scope of member benefits, including FREE on-demand courses through Aug. 1!

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NAIOP May Coronavirus Impact Survey Reveals Modest Improvement in Conditions for Development

Originally published on May 27, 2020  By Shawn Moura, Ph.D. 

Last week, NAIOP conducted its second survey of its U.S. members on how the coronavirus has affected their businesses and local markets. The survey results reveal the continued effects of the outbreak and how commercial real estate firms’ response to the outbreak has evolved since April. Although conditions are broadly similar to those in April, the results reveal a moderate rebound in acquisitions and new development and a modest decline in the outbreak’s effects on current development projects.

The survey was completed by 461 NAIOP members between May 18 and 20, 2020. Respondents represent a range of professions, including developers, building owners, building managers, brokers, lenders and investors.

Below is an overview of the survey results with direct quotes from the participants (in italics) followed by key data from the survey and a profile of respondent characteristics. Results from April’s survey can be found here.

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New Report: COVID-19 Predicted to Decrease U.S. Office Demand

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.
View the full report.

WeWork and Airbnb: A Tale of Two Disruptors

The companies represent different approaches to the future of real estate, and their success or failure will offer important lessons to landlords.

The collapse of WeWork’s $47 billion valuation was the most exciting real estate story of 2019. Landlords, lenders, customers and competitors watched in awe as the company crashed into a wall of scrutiny and ridicule. In 2020, Airbnb might offer a similar spectacle, with a $35 billion valuation and a growing number of questions about the company’s long-term prospects.

What propels both companies? The changing needs of end users and the growing appetite of venture capital investors to disrupt the way real estate assets are operated and transacted. Both trends will keep transforming the industry, regardless of the struggles of WeWork or Airbnb.

A Time of Transformation

The global economy is awash in capital. According to data from PitchBook and the National Venture Capital Association, venture capital investments reached an all-time high of $131 billion in 2018, exceeding the heyday of the dot-com bubble. Elsewhere in the financial world, the amount of capital available to institutional money managers is also at an all-time high, according to data from Preqin and Ernst & Young.

In theory, investors only want to fund “real” tech companies that have high margins, can scale quickly and operate in industries that are easy to disrupt. In practice, the industries that could be easily transformed by technology — media, business processes, financial brokerages — have already been transformed. As a result, investors are venturing further up the risk curve, seeking out companies that want to disrupt other, more challenging industries such as real estate, health care and mobility.

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C.D.C. Recommends Sweeping Changes to American Offices

Originally published by Matt Richtel on May 28, 2020 for The New York Times.

Upon arriving at work, employees should get a temperature and symptom check.

Inside the office, desks should be six feet apart. If that isn’t possible, employers should consider erecting plastic shields around desks.

Seating should be barred in common areas.

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The Impact of COVID-19 on Real Estate Valuation and Leasing Webinar

Date: Thursday, June 11, 2020
Time: 2:00PM/EDT

The economic disruptions from COVID-19 have had significant impact on the credit quality of tenants, building occupancy and demand from buyers, resulting in substantial uncertainty in the valuation of commercial real estate and complexity in the accounting for lease modifications.  John Thomas, CEO of Physicians Realty Trust, and Dennis Power, CFO of the Opus Group, will share their experiences with tenant collections, lease concessions, market demand, and the resulting impacts on real estate valuation across their market niches. Brent Maier will provide his view on the impacts he has seen in his role as the leader of Baker Tilly’s real estate transaction advisory services team while Mike Kamienski and David Jamiolkowski, also from Baker Tilly, will share their view of how these issues will impact financial reporting from a real estate impairment and lease accounting perspective. Don’t miss this discussion of critical topics so you understand the valuation and leasing impacts from COVID-19.

Speakers:

Mike Kamienski, Partner, CPA, Baker Tilly
David Jamiolkowski, Partner, CPA, Baker Tilly
Brent Maier, Managing Director, Baker Tilly
Dennis Power, CFO, Opus Group
John Thomas, CEO, Physicians Realty Trust

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June 15 Virtual Lunch With A Leader - Economic Development Pipeline

Economic Development Pipeline
Monday, June 15, 2020 | 12:00 – 12:45pm | Zoom Meeting
 

Grab your lunch and join this Lunch with a Leader virtually. During this webinar, hear about the various activities of our economic development organizations today. Are businesses looking to relocate to a warmer climate and different lifestyle? Is this our opportunity to thrive with relocations and expansions as businesses onshore more operations? What type of outreach and marketing campaigns are being developed to encourage interest?

 
Our Leaders
Tracy Dodson
City of Charlotte
Tracy Dodson

Robby Carney
Cabarrus Economic
Development Corporation

Donny Hicks, CEcD, CCIM
Gaston County Economic
Development Corporation
 
 
You are invited to submit questions in advance here.
 
 
Registration
This event is offered to NAIOP Charlotte members only at no charge. Prior registration is required. Zoom login information will be sent two (2) hours prior to the event.
 
 

Questions
If you have questions about the Virtual Lunch With a Leader, please contact the NAIOP Charlotte office at [email protected].

Board Insights

During April 17, 2020, NAIOP Charlotte Board Meeting, the following market perspectives were offered from board members:

  • Construction continues to proceed. Seeing smaller work crews on-site, but not slowing progress. Not seeing material issues at this time. New deals, if capitalized, are moving forward.
  • Developer and investors are hoping construction pricing to decrease as much as 20% but the construction industry is saying maybe 2%.
  • Seeing construction lending delayed by 30‐60 days due to banks focusing on PPP.
  • Big picture – Charlotte is still looking good to pull out of this when the time is right.
  • “Uneven” based on product type and where a project is in the process.
  • Retail is brutal. The only tenants that haven’t requested rent relief are grocery stores, drug stores, and quick-serve restaurants. Each answer is different. We need to look at the space and how we continue to provide a new experience in the retail of the future.
  • After this, we will have a greater realization that we create community – not sure brick and mortar retail will be dead.
  • On Monday (4/20), City will hold their first virtual rezoning meeting which will include public input through council members, chat, speaking upon appointment. No decline in zoning or permitting applications.
  • C‐4 is a new coalition of general contractors on a call twice a week with city and county (maybe 80 people on each call). As a group, developed best practices for a safe environment.
  • Many hotel owners are closing their location or 5‐15% occupancy.
  • Not seeing distressed sales yet.
  • In corporate America, how well offices adjust for future remote working? They are seeing some indications of 10% of remote workers to 30% remote workers. Corporations looking at hoteling and new design features. Will the old‐fashioned suburban office park may come back? New projects, looking at touchless entry for security and door entry.
  • WELL program – thinks that may have a good opportunity for a future program.

WeWork and Airbnb: A Tale of Two Disruptors

Originally published by Dror Poleg for the 2020 Spring Issue.

The companies represent different approaches to the future of real estate, and their success or failure will offer important lessons to landlords.

The collapse of WeWork’s $47 billion valuation was the most exciting real estate story of 2019. Landlords, lenders, customers and competitors watched in awe as the company crashed into a wall of scrutiny and ridicule. In 2020, Airbnb might offer a similar spectacle, with a $35 billion valuation and a growing number of questions about the company’s long-term prospects.

What propels both companies? The changing needs of end users and the growing appetite of venture capital investors to disrupt the way real estate assets are operated and transacted. Both trends will keep transforming the industry, regardless of the struggles of WeWork or Airbnb.

Click Here to Read More

On-Demand Courses FREE through August 1

People are talking about NAIOP's courses... NAIOP continues to offer on-demand courses free for members through August 1. Here's some of the great feedback from course registrants so far.

No code is required, just log in with your NAIOP member ID to access the offer. Take up to 90 days to complete a course after registering.

Click Here to View Courses

NAIOP NC Conference Moved to 2021

We Can't Wait to See You in Pinehurst
Thursday, March 25 - Friday, March 26, 2021

In light of the coronavirus pandemic and the uncertainty about the meeting conditions for the remainder of the year, NAIOP NC is cancelling the 2020 NAIOP NC Conference originally scheduled for March 26-27, 2020 at Pinehurst Resort in Pinehurst. At the heart of this decision: we cannot in any way risk the health of our attendees by convening a large group and possibly creating an opportunity to transmit the virus back to member communities.
 
We had an awesome conference scheduled for this year and are excited to carry over the conference to March 25-26, 2021 at Pinehurst Resort.
 
Conference Registration
What do you need to do with your existing conference registration? Absolutely nothing! We have transferred all registrations to our 2021 NAIOP NC Conference March 25-26, 2021. If for some reason you’re unable to make these dates or make a substitution, please email us at [email protected].
 
Hotel Reservations
If you reserved a room at Pinehurst Resort as part of the NAIOP NC block, the hotel cancelled your reservation and refunded your deposit. The room block for the 2021 NAIOP NC Conference will open soon.
 
We look forward to seeing you at the 2021 NAIOP NC Conference!
 
For questions and concerns contact NAIOP Piedmont Triad Chapter at [email protected] or 336-379-0603.
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I.CON Virtual Closing Keynote Announced

Date: Tuesday, June 23, 2020 - Thursday, June 25, 2020
Where: Online

NAIOP's can't-miss industrial conference is going virtual!

This online conference, focused specifically on industrial real estate, will provide the critical knowledge you need – now more than ever – to keep you ahead of the curve and prepared for the post COVID-19 environment. While the delivery method has changed, the quality content and caliber of speakers are the same.

I.CON Virtual will be presented in afternoon sessions over three days. In between each session, you’ll enjoy robust networking using our video platform – as close to face-to-face as we can make it during a time of social distancing!

Click Here to Register

The Impact of COVID-19 on Real Estate Valuation and Leasing Webinar

Date: Thursday, June 11, 2020
Time: 2:00 PM/EDT

The economic disruptions from COVID-19 have had significant impact on the credit quality of tenants, building occupancy and demand from buyers, resulting in substantial uncertainty in the valuation of commercial real estate and complexity in the accounting for lease modifications.  John Thomas, CEO of Physicians Realty Trust, and Dennis Power, CFO of the Opus Group, will share their experiences with tenant collections, lease concessions, market demand, and the resulting impacts on real estate valuation across their market niches. Brent Maier will provide his view on the impacts he has seen in his role as the leader of Baker Tilly’s real estate transaction advisory services team while Mike Kamienski and David Jamiolkowski, also from Baker Tilly, will share their view of how these issues will impact financial reporting from a real estate impairment and lease accounting perspective. Don’t miss this discussion of critical topics so you understand the valuation and leasing impacts from COVID-19.

Speakers:

Mike Kamienski, Partner, CPA, Baker Tilly
David Jamiolkowski, Partner, CPA, Baker Tilly
Brent Maier, Managing Director, Baker Tilly
Dennis Power, CFO, Opus Group
John Thomas, CEO, Physicians Realty Trust

Click Here to Register

DLs Ask DLs: What’s Next for Us? Webinar

Join NAIOP Developing Leaders on Wednesday, June 3rd for a special webinar to talk with your peers about today’s COVID-driven climate and how its impacting our industry and your careers. Four DLs from the office, industrial and acquisitions sectors will take your questions, talk about how their companies are handling the pandemic’s effects, and how they believe it will reshape careers and the ways we do business. This is an exclusive program for NAIOP Developing Leaders only.

Moderator:
Kaitlin Goetzman, Senior Associate, Investments, The Brookdale Group

Speakers:
Greg Boler, Vice President Development, Transwestern Development, Logistics Group
Dallas Margeson, Associate, Office Leasing, Transwestern
Kelsey Perrin, Vice President, Heitman

Developing Leaders Award

NAIOP is proud to honor up-and-coming commercial real estate professionals, 35 years of age and under, for their valued contributions and commitment to the industry with the annual Developing Leaders Award. The award is presented to those who have shown exemplary achievements and demonstrated outstanding professional accomplishments in the commercial real estate industry.

Nominations are now being accepted for the 2020 NAIOP Developing Leaders Award.
Deadline: June 26, 2020

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NAIOP Survey: Your Outlook on Events

NAIOP would like to hear from its members on your outlook for NAIOP events in 2020, both those hosted by NAIOP Corporate and those presented locally by chapters. Check your email for the survey invitation (sent May 27 and May 31) and complete the survey by Friday, June 5.

How Will COVID-19 Change How Lenders Evaluate Deals?

Originally published on May 19, 2020 by Paul Letourneau

One doesn’t have to look far to see the immediate impact of the novel coronavirus on commercial property markets. Across the U.S., millions of white-collar workers are now working from home, stores and restaurants have closed their doors, and nearly 17 million Americans filed for unemployment insurance in the first three weeks after the pandemic began shutting down cities. Nearly one-third of apartment dwellers didn’t pay their rent in the first week of April, in addition to the countless retailers and hotel companies that are unable to make their lease or mortgage payments.

As lenders and investors grapple with these urgent challenges, many economists and industry experts are asking whether today’s social distancing measures will have lasting impacts. From a lender’s perspective, we’re already evaluating deals through a new lens. The aftermath remains unseen, but the current environment is raising several important questions about the future of all asset classes, including multifamily, office, retail and industrial.

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Industry, Workplace, Community and the Importance of WELL in the Post-pandemic Environment

Originally published on May 19, 2020 by Brielle Scott

There is no doubt COVID-19 has accelerated the already changing nature of commerce and work and introduced a new layer of considerations for commercial real estate development. 

Prior to the outbreak, we saw e-commerce’s exponential trajectory, increased demand for immediate goods, and the rise of urban industrial development to fulfill last-mile needs. All of these factors have created the now-accelerated need for more urbanized solutions and the inclusion of a better-integrated workforce. The emergent need for a more resilient, reliable and reconfigurable supply chain that is more locally grounded will drive this change even further.  

In a recent webinar exclusive to National Forums members, KSS Architects Partner Ed Klimek, AIA, NCARB, discussed how industrial and office development can respond to these changes in order to bring the most value in a post-COVID-19 world. 

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A Message from Mecklenburg County Code Enforcement

We have updated our Live Remote Inspections Customer Guidelines to reflect new best practices as the situation changes.  
We have also assembled guidance for restaurateurs who are reopening and may wish to add or increase outdoor dining space using a tent. Customers should consult our Temporary Assembly Guidance and Workflows, which will walk customers through the process of obtaining the proper permits, when required. Further information on temporary outdoor dining is available from the City of Charlotte, for restaurants within the Charlotte city limits. 
At this time, our Suttle Avenue office will remain closed to the public and we will continue to deliver our services as we have been since the stay-at-home order went into effect. In the near future, we will be making some changes and improvements in our lobby to allow customers and staff to interact safely and with minimal risk of community transmission of the COVID-19 virus. We look forward to reopening our lobby to our customers at a later 

Stimulus, Safety and Shifts

Originally published on May 22, 2020 by Jennifer LeFurgy, Ph.D.

Economist Douglas Holtz-Eakin Gives his Take on the U.S. Economy and the Government’s Unparalleled Response

The global coronavirus pandemic has wreaked havoc on the U.S. economy and caused disruptions of historic proportions. “We’re facing a very different crisis than the one in 2008, which was essentially man-made,” said Douglas Holtz-Eakin, Ph.D., an academic policy advisor, strategist and president of the American Action Forum, during a recent NAIOP Forums Exclusive webinar. “This is a completely different phenomenon.”

Holtz-Eakin noted the swiftness of the pandemic’s effects on the U.S. economy, citing record unemployment and the contraction of GDP by 4.8 percent in the first quarter of 2020. However, for the most part, he praised the federal response. He stated the Federal Reserve reacted appropriately to the crisis by essentially injecting cash back into the economy through its lending programs. “The Fed’s actions insulated the financial markets from the fallout of the coronavirus pandemic. Banks and other financial entities that have performed remarkably well in this environment and are well-capitalized and capable of executing their basic missions,” he said. “That wouldn’t have happened without the very, very strong, response from the Federal Reserve.”

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