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Asset Managers Can Play a Key Role in Tenants' Return-to-workplace Plans

Originally published by Rob Naso for NAIOP Development Magazine Summer 2021 Issue

A new framework for mitigating disease in the office focuses on air quality, changing behaviors and building occupant trust.

The COVID-19 pandemic has redefined the role that office landlords play in creating safe, healthy work environments. While most office workers packed up their laptops and headed home to ride out the pandemic, building owners and property managers had to pivot quickly to elevate safety measures for the essential workers who remained, in an environment with fast-changing public health guidelines. Now, they face the next stage of recovery — ensuring tenants feel comfortable returning to the workplace as vaccination rates increase.

The landlords that return their buildings to thriving, active communities will be those that expand the definition of their role to also become socially-minded strategists charged with creating safe and healthy environments, setting the stage for tenants to safely return to the workplace. Positioned at the forefront of containing future outbreaks while enabling businesses to resume activity, the responsible asset manager has become the tenants’ partner in their return-to-workplace strategy.

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One Sponsorship Left for CRCBR/NAIOP Charlotte Fall Golf

One Tournament Sponsorship Opportunity Left!

There is one opportunity left to participate in CRCBR/NAIOP Charlotte’s annual golf tournament that will be held on September 27 at Carolina Golf Club!

Make plans to join us as the Longest Drive Contest (Female) sponsor to get your company name in front of developers and brokers and catch up with your industry peers at this fun and valuable event! This opportunity includes player registrations.

Sponsorship opportunities are available on a first-come, first-served basis.

At this time, player spots are only available through sponsorship of the tournament. 

To become a sponsor, click the button below and send the completed form to Sandy Hower at [email protected].

 
Become A Sponsor

 




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Get Involved in a City of Charlotte Stakeholder Group

The City of Charlotte is seeking applications for two community commissions. The application deadline has been extended to August 27, 2021.  Nominations will occur on September 13 and appointments will occur on September 27.  Below is more information on the opportunities. 

Charlotte Equitable Development Commission

The Charlotte Equitable Development Commission was created with the adoption of the Future Charlotte 2040 Comprehensive Plan by City Council resolution on June 21, 2021. The Commission is charged with advising in the assessment of infrastructure throughout the city and recommending strategies that balance equitable investments in areas most in need, including areas with absent and insufficient facilities, areas growing fastest, and areas targeted for growth. The Commission will work with the Office of Strategy and Budget to provide input on the development of the city’s proposed Capital Investment Plan. The Commission will provide regular updates to the Budget and Effectiveness Council Committee and quarterly reports to the entire Council.

The committee will consist of individuals with significant backgrounds in community development and infrastructure assessments. Examples of preferred experience shall include consulting engineers in the project development business; attorneys specializing in development; developers; independent business representatives; construction contractors; bankers or insurance agents engaged in the financial aspect of development; representatives from homebuilder's association; homeowners or neighborhood association representatives.

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Upcycling: Reimagining Underutilized Commercial Space as Public Space

Originally published by Philip Wilkinson and Teresa Bucco for NAIOP Development Magazine Summer 2021 issue.

A project in Pittsburgh demonstrates the potential of activating common areas in older retail destinations.

For nearly two decades, online shopping has seen steady growth in both traffic and sales, which has forced traditional retailers to think of new ways to draw people into brick-and-mortar stores. In more recent years, shifts toward experiential retail saw many retailers overhauling store designs to give shoppers more hyperlocal, boutique or high-end encounters while encouraging online buying and in-store pickup. 

However, concepts such as Wal-Mart’s Neighborhood Market and Target’s City Target — launched to reach transit-oriented communities and supplement declining sales at traditional big-box locations — were often slow to catch on or showed mixed results, according to a 2019 Mashed article.

Then the COVID-19 pandemic accelerated the decline of in-person buying. Digital Commerce 360 reports that total online spending in 2020 reached $861 billion, up 44% from 2019, accounting for 21.3% of total retail sales. Adobe’s Digital Economy Index shows that 2020 accelerated the typical year-over-year growth of e-commerce by four to six years. Conversely, sales from brick-and-mortar retailers fell an estimated 14%  to just $4.2 trillion in 2020, according to a June 2020 Insider Intelligence study. Due to the rise of e-commerce and the economic effects of the pandemic, it’s clear that commercial centers must evolve to become more than just shopping destinations.

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Vote on Senate Infrastructure Bill Expected This Week

Originally published on August 3, 2021, for NAIOP E-Newsletter.

The bipartisan group of senators negotiating infrastructure legislation finalized legislative text over the weekend and officially introduced the measure Sunday night. Senate Majority Leader Chuck Schumer (D-NY) has stated he plans to hold a vote on the bill later this week.

Senators Rob Portman (R-OH) and Kyrsten Sinema (D-AZ) officially introduced the 2,702-page Infrastructure Investment and Jobs Act, emphasizing the bipartisan nature of both the process and the legislation. The bill includes $550 billion in new spending and provides more than $1 trillion in total spending on roads, bridges, ports, and broadband. The package also includes spending on Biden administration priorities, including electric vehicle charging stations, climate resilience, and water infrastructure.

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Industrial Solutions for E-commerce Grocery Fulfillment

Originally published  by Scott Murdoch for the Summer 2021 Issue of NAIOP Development Magazine.

The pandemic forced the industry to adapt quickly to meet soaring demand.

While grocery e-commerce was growing prior to the pandemic, the sector saw staggering market penetration over the course of 2020 and beyond. Concerned about safely accessing food, consumers across all demographics turned to online grocery shopping as a convenient, safe option.

A survey by LEK indicated that food e-commerce made up 3%-4% of total grocery retail sales before the pandemic and that overall penetration would reach 15%-20% by 2025. But in its February 2021 Online Grocery Report, Business Insider projected online grocery adoption will reach 55% in the U.S. by the end of 2024. Consumers have clearly grown accustomed to the convenience and safety of grocery e-commerce. 

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Commercial-Property Sales Volume Returns to Pre-Pandemic Levels

Originally published on July 27, 2021, by Ester Fung for the Wall Street Journal.

U.S. commercial real-estate sales this year have rebounded to pre-pandemic levels, fueled by historically low-interest rates and the belief of many investors that the worst of Covid-19 is over.

But the commercial-property sales landscape looks a lot different than it did before the health crisis hit in early 2020. Cities including New York and San Francisco have fallen in favor as have property types such as downtown office buildings and convention hotels.

Meanwhile, Sunbelt cities posted record sales and investors flocked to property types that performed well during the pandemic, including amenity-packed apartment buildings, warehouses and office buildings that cater to pharmaceutical and biotechnology industries. “There is a move to both new property types and new markets,” said a report recently released by data and research firm Real Capital Analytics.

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REIT Deal-Making is Robust in Light of Favorable REIT Outlook

Originally published on July 29, 2021, by Sheheryar Hafeez for the NAIOP E-Newsletter.

Real estate investment trust (REIT) merger and acquisition activity has emerged from the pandemic in full force with some $75 billion in investment nationally from January through mid-July 2021. This robust activity is expected to continue throughout what could potentially be a record-breaking year. While all 11 Global Industry Classification Standard sectors are in positive territory for the year, real estate ranks second highest with a strong 27% performance, just slightly below energy.

With the U.S. economy posting robust growth rates and expectations of a return to pre-COVID normalcy in many areas, investors are readjusting their views on various REIT sectors. Property sectors that felt the deepest impacts in 2020 – office, retail, and hotel, or “out-of-favor” sectors – are increasingly eyed by commercial real estate investors, who are betting on a strong rebound. Conversely, tech-driven and industrial REITs – or “in-favor” sectors – that benefited from the country’s increased reliance on e-commerce in 2020, have underperformed so far this year but are still in positive territory.   

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Senate Enters Final Stage of Bipartisan Infrastructure Negotiations

Originally published on July 27, 2021, for NAIOP E-Newsletter.

Republican and Democratic Senators negotiating infrastructure legislation signaled they were close to a final deal, with lead negotiator Rob Portman (R-OH) saying they were “90% of the way there.” The coming days are critical after Senate Majority Leader Chuck Schumer (D-NY) forced a procedural vote last week on moving a bill forward despite there being no legislative language available. The vote failed to garner the 60 votes needed for passage of the procedural motion, with the lead negotiators arguing they hoped to have any remaining issues resolved and legislative text drafted this week.

 

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As Building Material Prices Skyrocket, Project Managers Offer Strategies to Mitigate Risk

Originally published on July 23, 2021, by Roger McCarron for NAIOP E-Newsletter.

The COVID-19 pandemic, and the waves of lockdowns and business interruptions it prompted, affected global supply chains in virtually every industry — and construction is no exception. Due to widespread shortages of building materials, and pent-up demand from projects that were delayed or postponed during the pandemic, costs for materials including lumber, copper, steel, aluminum and vinyl skyrocketed. According to the National Association of Homebuilders, lumber prices spiked to a more than 300% year-over-year increase in May. While prices have since come down, they remain higher than historical averages and data suggest that demand for construction materials is approaching pre-pandemic levels.

 

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States Look to Strengthen Local Permitting Processes

Originally published on July 21, 2021, for NAIOP E-Newsletter.

Owners and developers of commercial real estate recognize that obtaining local building permits is an essential and fundamental requirement for the development and improvement of their properties. The processes for obtaining these permits vary by municipality and state. These variations lead to uncertainties and delays in projects moving forward, which impacts the development project’s financing, cost and the retention of contractors, construction equipment and other materials.

Many state legislatures have taken action to address this by bringing more predictability, transparency, and accountability to the local permitting processes within their state. This was the case in Florida and Georgia following effective advocacy by our local NAIOP chapters. Our members were increasingly concerned with the negative effect on development with the inconsistent application of permit requirements and fees by local governing entities.

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Integrating Vaccinations into Wellness Programs

Originally published by Wendy King for NAIOP's Summer 2021 Issue.

The real estate industry faces unique challenges in designing vaccination programs based on workplace types and the nature of jobs.

As COVID-19 vaccines continue to roll out, and with the possibility of booster shots for variants as fall approaches, many commercial and residential property management companies, as well as sales and leasing brokerages, are considering how to deal with vaccinations within their workplaces. 

If designing a company-wide vaccine program, consider prioritizing vaccine distribution based on job function. For example, some essential employees must work in-person to keep commercial buildings functioning. Meanwhile, a significant portion of the workforce will likely continue to work from home until this fall or beyond. 

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Now Available! CRCBR/NAIOP Charlotte Fall Golf Sponsorships

Tournament Sponsorships Now Available!

NAIOP Charlotte & CRCBR are hosting their always sold-out industry golf tournament on Monday, September 27!

Get your company name in front of developers and brokers and catch up with your industry peers. For one price, your company will be recognized as a sponsor during this two-flight tournament! Make plans to join us as a sponsor for this fun and valuable event! 

Sponsorship opportunities are available on a first-come, first-served basis.

At this time, player spots are only available through sponsorship of the tournament.

To become a sponsor, click the button below and send the completed form to Sandy Hower at [email protected].

Become A Sponsor

 



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Starting a Lab Facility: A Primer for Real Estate Professionals

Originally published by Daniel Castner, Brian Spence and Trevor Boz for NAIOP's Summer 2021 Issue.

This fast-growing sector can be complex to navigate for developers.

The scientific research market has grown substantially over the past 10 years. With a global pandemic top of mind, investors are looking at the life science industry now more than ever.

This expanding market is evolving into one of the fastest-growing real estate investment sectors, yet some developers, investors and real estate professionals may be intimidated or confused by the complexities in site selection, design and construction of lab facilities. Familiarity with industry-related terms and a basic understanding of what is needed to develop a successful lab research facility are key starting points. 

Scientific research requires an appropriate environment to conduct experiments, process data, foster collaboration and inspire creativity. Proximity to potential clients and talent, availability of public transportation, tax incentives, zoning restrictions and surrounding neighborhoods are intrinsic traits that must be considered when finding a suitable location to build a project. The configuration of the space can be adaptable to accommodate unknown needs of a program or a future tenant, or it can be targeted toward a specific type of science. 

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Investment in Senior Housing Poised for Strong Growth Following COVID-19

Originally published on June 29, 2021, by Zach Bowyer, Brian Chandler and Bryan Lockard for NAIOP E-Newsletter.

The COVID-19 pandemic interrupted a nearly 12-year growth cycle for the senior housing market, causing a drop in valuations to an eight-year low. Stabilized occupancy rates also fell to record lows due to infections, mandated holds on new resident admissions, safety concerns, and isolation fears. Rents, however, continued to rise, despite significant occupancy losses.

In addition, following four consecutive years of year-over-year decline, total price per bed for nursing homes increased by nearly 22 percent in the first quarter of 2021, marking the second-highest price point for nursing homes ever recorded, according to JLL Valuation Advisory’s recently released Seniors Housing & Care – Investor Survey and Trends Outlook

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Market Activity Focus on High-Value Assets Sustains Growth of U.S. Office Lease Rate

Originally published on July 2, 2021, by Ioana Ginsac for NAIOP E-Newsletter.

Last week, commercial real estate property data and listings platform CommercialEdge published its most recent national office report, which paints a more current picture of office sector activity across the top 50 U.S. markets. Data analyzed for the June 2021 report found that:

  • The average office lease rate was up 0.4% year over year, as asking office rents averaged $38.36 per square foot in May.
  • Vacancy rates reached an average of 15.6%, following a 240 basis points increase compared to May 2020.
  • Office sales closed during the first five months of the year totaled nearly $23 billion, contouring the possibility that 2021 investment activity is likely to at least match last year’s total volume of $61 billion.
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NAIOP June Coronavirus Impacts Survey: Operating Conditions Improve but Developers Grapple with Supply Shortages

Originally published on July 9, 2021 by Shawn Moura Ph.D. for NAIOP E-Newsletter.

In June, NAIOP conducted its eighth survey of its U.S. members on the impacts of COVID-19. Since April 2020, the association has examined the pandemic’s effects on commercial real estate and how firms have responded. Most American adults are vaccinated, and daily coronavirus case counts have plummeted in the five months since the previous survey. This has allowed a widespread return of customers to restaurants and retailers, and most observers now expect that office occupancy rates will rebound in the fall when schools re-open for in-person instruction. 

Respondents to the survey report a strong recovery in retail property rent collections, as well as retail property acquisitions and development activity, alongside continued favorable trends for industrial, office and multifamily properties. Less than one-quarter of respondents now expect the pandemic to significantly affect their business operations for more than a year, and respondents are much more optimistic about employment within their own firms than in previous surveys. 

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Senate Returns to Work on Infrastructure and Democratic Budget Bill

Originally published on July 13, 2021, for the NAIOP E-Newsletter.

The Senate returns this week from its July Fourth recess to continue work on an infrastructure package supported by President Joe Biden and a bipartisan group of 22 senators, which the White House hopes will garner the needed 60 votes in the Senate needed for passage. At the same time, House and Senate Democrats are working on a parallel track to develop a budget bill that will include Democratic leadership priorities and that can pass the Senate with only Democratic votes.

 

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NAIOP of North Carolina Holds Successful Day at the State Capitol

Originally published on July 7, 2021, by Toby Burke for NAIOP's blog.

NAIOP of North Carolina recently hosted the first in-person Day at the State Capitol since the outbreak of the pandemic. It provided NAIOP members from the Charlotte, North Carolina Piedmont Triad, and Raleigh-Durham chapters with the opportunity to advocate for effective policies that advance commercial real estate development within the state. This year’s legislative priorities focused on three areas: economic development, tax reform, and regulatory reform.

Regulatory reform emerged as a dominant issue during NAIOP of North Carolina’s meetings with state legislators. In particular, NAIOP members advocated for strengthening the state’s brownfield program within the North Carolina Department of Environmental Quality. There is growing concern within the commercial real estate community that the administrative delays and inconsistencies with the current program are discouraging the redevelopment of dormant or underutilized contaminated properties.

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Welcome New NAIOP Charlotte Members

We are proud to introduce our new association members! The following is a list of individuals who have joined NAIOP Charlotte since March 12, 2021:

  • Brian Taylor, Miller-Valentine Group
  • Caleb Gass, Heritage BlueFire
  • Chandler Markey, Sands Investment Group
  • Philip Elliott, Consulting Services Incorporated
  • Elsa Simaan, Stewart Title Guaranty Company
  • Greg Hartley, Acro Development Services, PLLC
  • HeatherMucci, Novus Architects
  • John Moscati, GTA Associates, Inc.
  • Philip Potter, Whiting-Turner Contracting Company
  • Allen McDowell, Bohler Engineering
  • AnthonyZook, Bohler Engineering