Health and Wellness in Industrial Buildings

Originally published on March 13, 2024, by Jennifer Lefurgy, Ph.D., for NAIOP.

Warehouses used to be spartan, utilitarian production and storage spaces. The emphasis was on throughput and convenience. However, some companies are incorporating human-centric features focused on wellness to capture market differentiation, increase employee retention and impact productivity. Authors of the recent NAIOP Research Foundation report, Designing for Wellness in Distribution Centers, spoke to I.CON West attendees about their design ideas, and an end user who has incorporated wellness standards in their facilities. 

Why Design for Wellness? 

Nate Maniktala, principal at BranchPattern, Inc. stated that workforce retention is a top priority for warehouse tenants. If developers can leverage design to support that goal, there’s an opportunity. Between 2020 and 2023, there was a 50% increase in the number of people who work in a warehouse in the United States. Warehouses can be dangerous places and thoughtful design can help mitigate these impacts. 

“Typically, we think of wellness as individual wellbeing, physical health, mental health… but it also incorporates spiritual health and how individuals within an environment interact with one another,” said Maniktala. Other concerns are air quality, acoustical and visual properties, and thermal comfort. 

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Industrial Construction Report: Manufacturing Takes Center Stage

Originally published on March 4, 2024, by Lucian Alixanderescu for NAIOP.

For the last few years, industrial real estate development has been on a tear, thanks to elevated demand for warehouse space. Specifically, increased demand for e-commerce – in conjunction with logistical difficulties – led companies to break ground on massive logistics and distribution centers. Now, with warehouse space vacancies normalizing and speculative projects slowing down, CommercialCafe highlighted the next trend taking hold in industrial space construction: manufacturing facilities, particularly for electric vehicles (EVs) and semiconductors.

In a study analyzing the current state of industrial real estate construction and the current pipeline, CommercialCafe highlighted which markets have the most industrial space underway, as well as the largest projects slated for completion in 2024.

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From Vacant to Vibrant: Repurposing Retail Spaces for Healthcare

Originally published on February 28, 2024, by Brian Kane for NAIOP.

As the retail landscape continues to evolve with some well-known retailers declaring bankruptcy or streamlining their real estate portfolios, it doesn’t have to signal a loss for the surrounding community. The opposite is true. People increasingly want their healthcare brought closer to home, and with these abandoned spaces comes opportunity.

According to a report from CBS News, in 2023, retailers across the country shuttered more than 4,600 locations – an 80% increase from 2022. Leading the pack on these closures was Bed Bath & Beyond, which went bankrupt in April 2023 and subsequently closed 866 stores across all three of its brands. Discount home goods retailer Tuesday Morning filed for bankruptcy and shuttered 463 stores, Foot Locker closed 116 stores, and drugstore brands Rite Aid, CVS, and Walgreens closed a whopping 807 locations combined. Even big box titan Walmart wasn’t safe from the scourge of cutbacks, ultimately closing 21 stores across 12 states last year.

But from the dust of retail giants comes opportunity for healthcare systems looking to expand, grow, and better embed themselves in the communities they serve. While new construction in healthcare has slowed with the rise of lending and construction costs, many healthcare companies are finding that converting vacated retail space can be an affordable alternative to building a ground-up facility, and at the same time offer patients easier, more convenient access to the healthcare services they need.

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States are at the Forefront of Transportation Electrification Infrastructure

Originally published on February 15, 2024, by Toby Burke for NAIOP.

The transportation sector accounts for 28% of greenhouse gas emissions – the highest percentage of any sector, reports the U.S. Environmental Protection Agency. The result of this has been greater public and private sector demand and interest in a national network of charging stations to support the use of more electric vehicles (EVs), including trucks, also known as transportation electrification.

During NAIOP’s Chapter Leadership and Legislative Retreat this week in Washington, D.C., chapter leaders and staff attended a session that recognized the leading role of state governments in establishing a national network of public EV charging stations following the passage of the bipartisan Infrastructure Investment and Jobs Act of 2021. Anne Blair, vice president of policy at the Electrification Coalition, highlighted this and its impact on the commercial real estate industry following the allocation of $7.5 billion from the federal act to establish this national network. The federal allocation is broken into two parts: $5 billion for states under a national EV infrastructure (NEVI) formula and $2.5 billion in charging and fueling infrastructure (CFI) grants.

After stating the case for transportation electrification as a cleaner alternative to oil-based fuels, Blair provided an overview of federal funding investments in the manufacturing and production of EV materials, such as battery production in the southeastern states. Her presentation also included a review of available grant and tax credit programs for heavy-duty trucks and port operations.

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New Charlotte Unified Development Ordinance (UDO) Text Amendment Filed, More on the Way

New UDO Text Amendment

Last Monday, March 5th, planning staff filed a new text amendment they refer to as a "clean-up" amendment to "provide greater clarity" for users.  Also included are updated definitions, use permissions and prescribed conditions, revised names, and changes to standards.  This amendment incorporates some, but not all of the recommendations suggested through the UDO Change Request Form process REBIC developed last July.  City staff plans to hold informational sessions in April with a hearing anticipated in May and a vote in June.   We'll provide more details on the proposed amendment in next week's edition.          

Changes to Conservation Subdivisions Discussed

During last week's Transportation, Planning, & Development Committee, staff provided a presentation to the committee that mentioned the text amendment referenced above but also described a new proposal aimed at tightening rules for Conservation Developments.  The suggested changes included the following:
  • Require an additional 15% tree save (green area) = 40%
  • Open space cannot be on individual lots
  • Increased minimum dimensions of open space
  • Increased standards for useable open space
  • Add additional perimeter buffer (landscape yard) requirements
  • Require lots to front public streets or open spaces (not private streets or alleys)

This proposal was introduced at Thursday's UDO Advisory Committee meeting where a more comprehensive presentation was provided.  This elicited a rather spirited discussion among committee members both through regular conversation as well as virtual chat.  While a new amendment was slated for introduction this week, it appears that has been pushed back to allow for additional input.     

Duplex/Triplex Issue

During the two meetings before last Thursday's session, the UDO Advisory Committee received presentations on potential changes related to parking and driveway standards for duplexes and triplexes on infill lots as well as the potential for changes in regulations for larger lot subdivisions.  Those meetings occurred on February 15th and February 22nd but no formal proposals have yet been forthcoming. 

Tree Manual Revisions

Comments on the proposed Tree Manual revisions are being accepted through the end of today, March 12th.  Please take a look and submit any recommendations to [email protected]

Area Planning Process

A presentation was also provided to committee members on the Community Area Planning process during last week's Transportation, Planning, & Development Committee.  A new Policy Map was just released a little while ago.  Staff still believes it can complete its work and be ready to request a council vote on the final product by early next year.

REBIC Hosting Transportation Event With Region's Mayors

Please mark your calendars for our upcoming event on April 9th where we'll be hearing from several mayors from the area about their vision for mobility and connectivity within the Charlotte region.  Come and learn how to support advocacy in transportation policy and public-private partnerships.  Moderated by Tracy Montross with American Airlines, this is a can't miss event.  

Please RSVP by March 31, 2024, to [email protected]
Location:  Canopy Building, 2nd Floor, 1120 Pearl Park Way, Charlotte, NC

[Watch] How CRE Benefits the U.S. Economy

Economic Impacts of Commercial Real Estate

This annual study published by the NAIOP Research Foundation — Economic Impacts of Commercial Real Estate — measures the contribution to GDP, salaries and wages generated, and jobs supported by the development and operations of commercial real estate in the U.S. 

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2024 Talent Recruitment and Compensation Trends Webinar

2024 Talent Recruitment and Compensation Trends
March 19, 2024 | 2:00PM | Virtual

Talent has become the number one issue affecting companies today. Examine the biggest trends in commercial real estate employment so you can make more strategic hiring and business decisions. Join these experts for a discussion on how current market conditions and the pandemic have reshaped the talent management industry, recent findings on industry employment trends and compensation, recruitment and retention tactics, and the future of the commercial real estate workforce. We will start with a presentation on compensation, benefit, and talent recruitment trends and then move to a discussion on these and other employment trends.

Andrew Hunt, Vieth Director, Center for Real Estate, Marquette University

Christopher Lee, President and CEO, CEL & Associates
Ryan Neale, Managing Director, SelectLeaders

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Charlotte City Council Restores Penalties for Inappropriate Public Acts

Last month the Charlotte City Council voted 7-3 to reimpose penalties for individuals conducting certain inappropriate acts in public.  Opponents attempted to couch the changes as an attack on the homeless community while supporters saw them as necessary for public safety for residents and visitors to Uptown businesses.  The final version that was adopted included six of the initial eight ordinances and eliminated those dealing with unauthorized people in parking lots and loitering to engage in drug-related activity due to constitutional concerns raised by the City Attorney.

Charlotte City Council Agenda - February 12, 2024
Proposed Ordinance (strikethrough version)
Proposed Ordinance (clean version)

Video of Public Comments (1:44:40)
Video of Council Deliberations (3:10:50)

RECAP: 2024 NAIOP NC Conference

That’s a wrap on the 2024 NAIOP NC Conference! Hosted by NAIOP CharlotteNAIOP Raleigh Durham, and NAIOP Piedmont Triad
400+ CRE professionals met in Pinehurst last week to hear the latest on economic and real estate trends in NC.

Congratulations to the 2024 Project of the Year Award Winners! Take a closer look at each project here:

New Development Project of the Year: 2151 Hawkins - The Line in Charlotte, NC (submitted by Gensler)
Redevelopment Project of the Year: Camp North End in Charlotte, NC (submitted by BB+M Architecture)
Industrial Project of the Year: Western Carolina Energy Production Facility in Cullowhee, NC (submitted by The Christman Company)

Thank you to our event sponsors for your support!

Lunch: Merritt Properties, LLC | Metromont
Conference Refresher: Schell Bray PLLC
Taste of Pinehurst Reception: McAdams | McMillan Pazdan Smith Architecture
Supporting: Cline Design
Lanyard: Bolton & Menk, Inc.
Wi-Fi: Kilpatrick Townsend & Stockton LLP
Room Key Card: Choate Construction Company
Sessions: ECS Limited | Elliott Davis | JDAVIS | MCI - Mechanical Contractors, LLC | Windsor Commercial
Meeting Break: Akerman LLP | Bohler | First & Early Partners | Samet Corporation | Strategic Connections, Inc. | V3 Companies

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Charlotte Urban Forestry's Proposed Tree Manual Revisions Released

Charlotte's Urban Forestry Department has just published proposed changes to the Charlotte Tree Manual.  Some of these updates, which provide additional flexibility for builders and developers are targeted for review and will likely make their way into the regulatory framework already established under the Unified Development Ordinance (UDO).  As these updates were just introduced yesterday, we are still in the process of completing our analysis.  Stay tuned for updates! 

Draft Charlotte Tree Manual Proposal
Submit Comments on Draft Tree Manual
(Now until March 12, 2024)

Powerhouse Legislative Lineup Visits REBIC

Regulatory reform was at the top of the agenda during yesterday‘s visit from North Carolina Senate President Pro Tem Phil Berger and House Speaker Tim Moore.  Also in attendance were Senator Dave Craven and Senator Brad Overcash.  We also welcomed House Senior Appropriations Chair Jason Saine who is responsible for developing and gaining approval of the State Budget.  What were the highlights?  The General Assembly members agreed to continue to strategically streamline and simplify the regulatory process aimed at making housing more attainable.  They also mentioned their efforts to provide continued regulatory relief, and the expansion of water and sewer capacity through additional funding to aid growing municipalities intelligently handle the influx of people choosing the Charlotte region as their new home.

Several industry leaders at the event brought up the subject of tax abatement strategies in other states, and how it is being successfully utilized to provide workforce and affordable housing, adding solid reasons why we need to explore its benefits more ardently here.  Our guests expressed great interest in learning more about that solution and requested additional details.  As such, we are enlisting assistance in putting together a presentation on how tax abatement works, specifically when scaled.  We will note where it is being successfully utilized and include some examples of projects that have been built using this tool.  The next step will be developing a detailed strategy that will include specific policy recommendations for future action at the General Assembly level. 

Our Premier Members enjoyed and appreciated the direct access we received from these key members of the House and Senate who took their time to address matters of importance to the industry.  We look forward to the next opportunity to check in with this group and we thank them for their continued support and leadership that has resulted, among other things, in North Carolina being the top place to do business in the country.

What's Next for the Dynamic Industrial Market? (2024) Webinar

What's Next for the Dynamic Industrial Market? (2024) 
April 2, 2024 | 2:00PM | Virtual

Dive into the latest trends, headwinds, and opportunities in the industrial sector with Hany Guirguis, Ph.D., Professor, Economics & Finance, Manhattan College, and Josh Harris Ph.D., CRE, CCIM, CAIA, Managing Partner, Lakemont Group, authors of the NAIOP Industrial Space Demand Forecast. They will provide insights and data from the latest Forecast, identify linkages between overall economic activity and the demand for industrial real estate, and answer attendee questions in a live Q&A.

Hany Guirguis, Ph.D., Professor, Economics & Finance, Manhattan College
Josh Harris Ph.D., CRE, CCIM, CAIA, Managing Partner, Lakemont Group

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Primary Election Day is Tomorrow. Please. VOTE.

Election polling locations in all counties open tomorrow, Tuesday, March 5th at 6:30 am and close at 7:30 pm.  Following the end of Early Voting, statewide turnout stood at just over a dismal 9%.  Tomorrow you can use your power and make a difference! 

Given all the excuses for not voting, the act of saying, "My vote won't count" is the worst.  Because you go from assuming your voice won't be heard to ENSURING it NEVER will.  Please review our Primary Election Voter Guide and our Leadership Guide, then head out to the polls and vote!
  Additional voter information for each county can be found below:

Mecklenburg County Board of Elections
Iredell County Board of Elections
Cabarrus County Board of Elections
Gaston County Board of Elections
Union County Board of Elections

Call to Action Success – City Council Vote on Public Safety

Charlotte City Council voted 7-3 in favor of reinstating local ordinances linked to disorderly conduct.  Thank you to CRCBR members who sent emails to encourage Council Members to vote in favor – your voice was heard.  The reinstatement of these ordinances is not only imperative for the safety and welfare of our families, employees, customers, and community members but also vital for sustaining the liveliness and prosperity of our city. As representatives of the business community, we stand together in support of measures that foster a secure and inclusive environment for all.

RECAP: 2024 Chapter Leadership & Legislative Retreat

Another successful trip to DC for the NAIOP chapter leadership and legislative retreat. Delegates from all three NAIOP NC chapters spent the week learning about NAIOP’s 2024 strategic plan and then went to work on Capitol Hill today and advocated to our Representatives in Congress about the importance and impact of CRE and the need for pro-development policies such as Adaptive Reuse. 

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Early Voting Begins Thursday!

The 2024 Primary Election is scheduled for March 5th, but early voting begins this Thursday, February 15th.  See below for information on where and when to vote along with additional resources from each county's Board of Elections.  Don't forget to bring your ID!

Mecklenburg County Voting Sites - Mecklenburg County Board of Elections

Iredell County Voting Sites - Iredell County Board of Elections

Cabarrus County Voting Sites - Cabarrus County Board of Elections

Gaston County Voting Sites - Gaston County Board of Elections

Union County Voting Sites - Union County Board of Elections

2024 Resolutions for Office Owners and Brokers

Originally published on February 2, 2024, by Hayim Mizrachi, CCIM, for NAIOP.

As we start a new year, the office outlook is still mixed. Although more companies are requiring employees to be in the office some days per week, we are far from the high occupancy that many central business districts enjoyed before 2020. Companies are still figuring out their workplace strategies – how often to bring in employees and how to better use their space for the reality of work today.

At the same time, financing and refinancing office loans for owners is increasingly difficult. Every margin matters: How the property is managed and what improvements can be made may be the difference that prevents a forced early sale.

So, in the near term, we must find a new equilibrium in how office space is positioned. My colleagues from CORFAC International offices around the world shared what they’re seeing in the office sector and how office owners and brokers need to respond.

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NAIOP New Jersey: Let’s get the Next Energy Master Plan Right

Originally published on February 7, 2024, by Dan Kennedy for NAIOP.

Commercial real estate developers and owners recognize the important role they must play in combating the effects of climate change. In my state, New Jersey, residential and commercial buildings account for the second-largest share (26%) of greenhouse gas emissions, while 87% of residential buildings and 82% of commercial buildings rely on natural gas for heating spaces and water.

To address climate change, Governor Phil Murphy (D) has issued an energy master plan to achieve this with an unrealistic goal: converting New Jersey into a 100% clean energy economy by 2035. The governor has directed this plan to be updated in the coming year. 

NAIOP New Jersey is approaching the governor’s initiative as an opportunity to improve an unrealistic policy document that has done little to achieve its lofty goals. Critically, this is an opportunity for our industry to make a meaningful contribution toward an energy policy that is realistic, achievable and addresses the threat we all face from climate change.

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Charlotte City Council Committees Discuss Density, Adaptive Reuse Incentives

Yesterday was "First Monday," the day when Charlotte City Council holds its four regular committee meetings.  After all the discussions, they gather together in the evening to give the Council a full review and discuss any other pertinent matters.  Here are some highlights:

Transportation, Planning, & Development
Planning Director Alyson Craig provided a presentation containing a staff recommendation in response to a referral made by the City Council earlier last year. It's important to note that the Council adopted the 2040 Comprehensive Plan in 2021 which called for broader allowance of higher-density dwellings throughout the city.  The adoption of the Unified Development Ordinance (UDO) followed in 2022 and permitted the development of duplexes and triplexes in single-family neighborhoods.  After complaints from some neighborhood groups, who seem to have been deemed by the leadership as having the most influence on a plan already debated by experts, the Council directed staff to develop proposals aimed at slowing and potentially repealing these provisions.  Further discussions will take place at the next two UDO Advisory Committee meetings to be held next week and the week after.

Jobs & Economic Development

Economic Development Director Tracy Dodson provided a presentation on a potential pilot project involving the proposed conversion of one or more buildings in Uptown.  Staff will have additional discussions and come back to the Council with a menu of incentive options that may include tax increment financing, tax increment grants, and other similar related tools.