Originally published on January 16, 2024, by Rebecca Randolph for NAIOP. 

As the business landscape continues to evolve, it’s key for relationship builders in all industries to reconsider the ways they connect and engage with both new and existing clients. In our fast-paced, digital world, new technologies have transformed how companies do business, including how they attract new prospects, foster relationships, create trust and maintain relevance. While these new technologies are rooted in the basic principles of relationship building, business development professionals should take a close look at these new methods to consider how they can help reinforce their current approach to support their company’s growth and longevity.

A MULTICHANNEL APPROACH

In the wake of the COVID-19 pandemic, companies across the globe sought out new platforms for conducting business, collaborating, and connecting with colleagues and peers. Although these technologies, such as Zoom and Microsoft Teams, had been in existence for several years, they quickly became the go-to solution for staying connected regardless of physical location. While these platforms remain relevant in the post-pandemic world, they are no longer the only option for maintaining connectivity and collaboration. After many months spent separated from society and the physical workplace, most individuals are eager to reconnect in person.

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Originally published on January 17, 2024, by Eric Schmutz for NAIOP.

Iowa Republicans held their 2024 presidential caucus on Jan. 15, and as expected, former President Donald Trump won with 51% of the votes cast. Florida Governor Ron DeSantis placed second with 21.2% and former South Carolina Governor Nikki Haley placed third with 19.1%. Businessman Vivek Ramaswamy, after receiving 7.7% of the votes, suspended his campaign and promptly endorsed Trump. Former Arkansas Governor Asa Hutchinson received less than 200 votes and also suspended his campaign, but has yet to endorse another candidate. 

The current delegate totals among the candidates stand at Trump with 20 delegates, DeSantis with 8, Haley with 7, and Ramaswamy with 3. A candidate needs 1,215 delegates to win the party’s nomination. The action now moves to New Hampshire where Republicans will hold their first presidential primary on Jan. 23, and then to South Carolina where the first Democratic primary will be on Feb. 3 and the Republican primary will be on Feb. 24.

Unless a major shakeup occurs, we will likely see a repeat of the 2020 race between President Joe Biden and Trump. If so, it will be the first time a former president has run as his party’s nominee for a non-consecutive presidential term since 1892, when former President Grover Cleveland (D) defeated incumbent President Benjamin Harrison (R) in a rematch.

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Originally published on January 9, 2024, by Todd Burns and Andrew Volz for NAIOP.

The potential for artificial intelligence (AI) to transform businesses, industries and society has been mounting for decades, but recent advancements have moved the science from niche to mainstream. The technology’s proficiency in writing, drawing, coding and composing has driven corporate leaders to consider both the opportunities and threats that AI presents for their future.

For commercial real estate, it’s clear that strategically embracing AI could transform the sector. In JLL’s 2023 Global Real Estate Technology Survey, investors, developers and corporate occupiers ranked AI and generative AI among the top three technologies expected to have the greatest impact on real estate over the next three years. Less clear, however, are the details of what exactly comes next. Respondents indicated the least understanding of AI and generative AI when compared to other surveyed technologies such as blockchain, virtual reality and robotics.

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Originally published on December 20, 2023, by Aquiles Suarez for NAIOP.

As 2023 comes to a close and we look ahead to the challenges facing commercial real estate in 2024, it is clear that persistent advocacy on the public policy front will be more important than ever to ensure that the interests of NAIOP members are protected. This is true of course at the state and local level, but it is at the federal level, where government gridlock has been most on display, that maintaining our strong advocacy will be critical.

As some media reports have already noted, this Congress will be one of the most unproductive since the Great Depression. Just 20 pieces of legislation have been signed into law. Narrow partisan majorities in the House and Senate, and continued dysfunction in the House Republican conference in particular, have made advancing legislation in this Congress an even bigger challenge than usual. For three weeks, Congress lost valuable time while the drama surrounding Speaker Kevin McCarthy unfolded, with Republicans finally settling on the fourth candidate to vie for the spot. While the House did manage to pass debt-ceiling increases and government funding measures that were “must-pass” bills, the only other bills that Congress seemed able to digest were those renaming post offices and those with no opposition at all.

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Originally published on January 3, 2024, by Toby Burke for NAIOP.

The political battle over the presidency and the control of both chambers on Capitol Hill is expected to garner most of the attention of the national media this year. While the outcome of these campaigns will have significant implications on policy debates at the national level, they should not overshadow or minimize the important political races for control of state legislatures and gubernatorial offices across the country. The outcome of these more grassroots races in comparison to control of state capitols may be more reflective of the policies of importance to the American people.

Republican governors currently hold a 27 to 23 advantage over Democrats heading into 11 gubernatorial elections later this year. The 11 states holding gubernatorial races in the fall are Delaware, Indiana, Missouri, New Hampshire, North Carolina, North Dakota, Utah, Vermont, Washington and West Virginia. Except for Montana, North Dakota (to be determined), Utah, and Vermont, the incumbents are either term-limited, not seeking re-election or seeking another elected office. North Carolina is expected to be one of the most competitive this year because Democrat Rory Cooper is unable to seek reelection based on term limits and the recent Republican successes for statewide and presidential offices.

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The list is complete!  Candidates who filed are competing for important seats on the County Commissions, the State Legislature, and the U.S. Congress.  Click the links below to familiarize yourself with the candidates:

• North Carolina Board of Elections - State and Federal Candidate List
• Mecklenburg County Board of Elections - Candidate List
• Iredell County Board of Elections - Candidate List
• Cabarrus Board of Elections - Candidate List
• Gaston County Board of Elections - Candidate List
• Union County Board of Elections - Candidate List

This is big news when it comes to the impact on growth and real estate development strategies.  According to a recent article, featured in Axios Charlotte, North Carolina is receiving a 1.09 billion dollar federal grant, the largest ever received by the North Carolina Department of Transportation (NCDOT), toward the S-Line, a passenger rail line from Raleigh to Virginia.  Additional dollars will be allocated to plan and develop rail corridors between other cities, including "high-speed" rail linking Charlotte and Atlanta.  Other corridors to be studied and planned are those between the following cities:

• Charlotte and Kings Mountain
• Fayetteville and Raleigh
• Wilmington and Raleigh
• Winston-Salem and Raleigh
• Salisbury and Asheville

For additional details, read the full article here: 

Mega federal investments will revolutionize
passenger rail out of Charlotte

Originally published on December 15, 2023, by Marie Ruff for NAIOP.

The tale of the office market in 2023: it was neither the best of times nor the worst of times. This year has continued to be one of recalibration and reevaluation for office space usage across the U.S. While some companies have called employees back to the office full-time, others have embraced the transition to being fully remote and others are somewhere in between. But what does the data show about office usage now and what’s ahead? In a recent NAIOP webinar, the authors of the recent office space demand forecast published by the NAIOP Research Foundation explained their research findings.

The forecast’s authors – Hany Guirguis, Ph.D., professor, of economics and finance, Manhattan College, and Michael Seiler, DBA, visiting research scholar, Federal Housing Finance Agency; visiting professor (MIT); and J.E. Zollinger Professor of Real Estate & Finance, College of William & Mary – started off with a high-level look at the economy. The U.S. economy avoided a recession in 2023 and real gross domestic product (GDP) has now expanded for the fifth straight quarter. “It’s nothing to brag about but it’s not as bad as some of the doomsayers say,” Seiler said.

Seiler explained that the Federal Reserve’s continued efforts to quell inflation by raising interest rates have been effective but at the expense of economic growth. After peaking at 9.1% in 2022, the inflation rate has declined to 3.1% every year, according to the U.S. Bureau of Labor Statistics. And the national unemployment rate, currently at 3.9%, “has been trending in the right direction: quite low and quite stable,” Seiler said.

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NAIOP Charlotte, the Commercial Real Estate Development Association, held its 2023 Annual Meeting: What the Future Holds on Tuesday, December 5, 2023, at The Terrace at Cedar Hill, where we elected the 2024 Board of Directors. 

We awarded the 2023 Award of Excellence to Dale Stewart, PE, partner at LandDesign. Dale gives time and energy to NAIOP Charlotte and humbly serves others in the community without concern for recognition or compensation. He champions the commercial real estate industry on a national, state, and/or local level and passionately seeks to be a change agent, even in the face of diversity. 

­The meeting concluded with insights from The Differentiators’ Jim Blaine as he provided a pulse on what’s going on at the federal, state, and local landscape levels and the potential impacts in North Carolina and Charlotte. 

2024 Board of Directors

Your future leaders are coming into view!  Candidate filing for elected office opened at noon on Monday, December 4th and remains so until noon on Friday, December 15th.  Candidates who decide to run will be competing in 2024 contests for positions from County Commissioner, to State Legislator, U.S. Congress, and all the way up to U.S. President.  Click the links below to see who has filed so far and begin to familiarize yourself with the candidates:
 
Mecklenburg County Board of Elections - Candidate List
 
Iredell County Board of Elections - Candidate List
 
Cabarrus Board of Elections - Candidate List

Gaston County Board of Elections - Candidate List

Union County Board of Elections - Candidate List

Originally published on December 6, 2023 Eric Schmutz for NAIOP.

For the first December in recent years, Congress is no longer facing a government shutdown deadline. Prior to the Thanksgiving recess, Congress approved a two-tiered appropriations package. This “laddered” approach primarily funds domestic programs (such as housing, agriculture, transportation and infrastructure) until Jan. 19, 2024, and the remaining programs, including defense and homeland security, until Feb. 2, 2024. Year-end 2023 is not without its share of must-pass legislation, however.

Before Congress adjourns for the holidays, House Speaker Mike Johnson (R-LA) must convince his conference to approve the $886 billion National Defense Authorization Act, reauthorizing legislation for the Federal Aviation Administration (FAA), and Section 702 of the Foreign Intelligence Surveillance Act (FISA). In addition, the House must reach an agreement with the Senate and President Joe Biden on aid packages for Ukraine, Israel and Taiwan that House and Senate Republicans say must include border security funding. With six legislative days left on the schedule, the House appears to be adding to their busy schedule by approving impeachment inquiries for Biden and Homeland Security Secretary Alejandro Mayorkas.

Adding to Johnson’s challenges, the House voted 311-114 last week to expel Representative George Santos (R-NY), making him the sixth member in history to be expelled from Congress and shrinking the already narrow and fractured Republican majority in the body.

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Originally published on December 5, 2023 Doug Faron for NAIOP.

In today’s environment, there are countless barriers to new commercial real estate development opportunities, including rapidly rising borrowing rates, increased constraints on banks, growing insurance costs and geopolitical risks, to name a few. On top of that, a major constraint to development today is the rising cost of construction. The upward trajectory of construction spending itself can be attributed to many factors including inflation, labor costs, rising insurance rates, materials and even permitting costs. As the cost to build becomes more expensive, developers are grappling with how to deliver high-quality buildings on time and within budget.

As a result, to achieve deadlines and stay within budget, developers must generate solutions to the industry dilemma of rising construction costs. In this article, we will dive into what’s driving construction spending, how these costs are impacting developers and solutions for maintaining development momentum.

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Originally published on November 20, 2023 by J. Byron Brazier for NAIOP.

When you travel to a different country, you expect to encounter a different landscape, culture and customs. But in many parts of the U.S., communities mere blocks or miles apart feel like wholly distinct worlds. Take Chicago: Its beautiful architecture and stunning lakeshore belie the staggering economic disparities among neighborhoods and real estate developments. 

In Lincoln Park, a community on Chicago’s North Side, the median income is $123,044 and 85.6% of residents have a bachelor’s or graduate degree. Nearly 80% of Lincoln Park’s residents are white. Ten miles south, in the Woodlawn community, the median income is $28,794 and 26.1% of residents have a bachelor’s or higher degree. Eighty percent of Woodlawn’s residents are Black. 

Drive through Lincoln Park and you’ll see high-end workout facilities, a range of shops and restaurants and an enormous Whole Foods. Drive through Woodlawn and you’ll spy far fewer amenities. Of these two communities, you can probably guess which has enjoyed large-scale, sustained investment and which has experienced underinvestment and systemic inequities. 

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The NAIOP Research Foundation has published the NAIOP Office Space Demand Forecast for Q4 2023.

Key Takeaways:

• The office market continues to face stiff headwinds as office utilization has remained relatively flat over the last year, as evidenced by mobile phone location data and building-access records.
   
• The U.S. economy has defied many economists’ forecasts for a recession in 2023, but office-using employment growth has stalled. Nonetheless, with a recession now appearing less likely, employment growth should continue next year, and firms may be more willing to commit to leasing space than they have been in 2023.
   
• As office leases expire, tenants are trading space for quality, leasing smaller spaces in newer buildings with modern amenities to draw workers to the office.
   
• By contrast, the largest increases in vacancies since 2020 have been concentrated in a small proportion of the most functionally obsolete office buildings, which tend to be poorly located and poorly amenitized. Few of these buildings appear likely to remain in use as offices, barring significant renovation.
   
• New construction has slowed, but given the lag between starting construction and delivering new office space, projects begun in earlier years continue to reach the market, with 17.1 million square feet delivered over the last two quarters. Combined with negative 12.3 million square feet of net absorption over the last two quarters, these completions have contributed to a rising national average vacancy rate, which reached 18.4% in the third quarter, the highest rate since 1992.

Given these trends, net office space absorption in 2024 is expected to be 5.7 million square feet. Moving forward, the forecast projects that net absorption will total approximately 4.5 million square feet during the first three quarters of 2025.

View Report

Originally published on November 27, 2023, by WDG for NAIOP.

Adaptive reuse architecture presents a creative and specialized challenge. The prevailing trend is to convert vacant office buildings into multifamily residential or hospitality properties. These designs are a purposeful, more sustainable solution that provides vibrancy to obsolete, underutilized and often vacant buildings. Converting unused offices to another occupancy can address housing supply shortages and help bring back commercial business districts. The improved functional spaces increase the tax base for taxpayer and municipality benefits. The properties utilize the existing public infrastructure, roadways, transportation network options and utility connections for the rapid reconnection of an existing community. Understanding basic concepts of conversions is critically important for development professionals, city officials and local communities. Each potential property needs to be evaluated on its own merits to determine the probability of success, and whether the location, costs, timing and existing building layout make sense for a conversion.

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Originally published on November 20, 2023, by Rob Nanfelt for REBIC.

A coin toss is a reasonable way to determine who will receive first possession of the ball in overtime during a football game. It’s been the standard and accepted practice for years at every level of the sport. Now we’re learning that the outcome of elections can be determined in a similar manner. The outcome means someone wins and someone loses. But our low voter turnout this season means we are all losing!

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Originally published on November 13, 2023, by Rick Scardino for NAIOP.

As a retail real estate specialist for more than three decades, I’ve seen many trends come and go. One day, it’s an explosion in the sale of bank pads. And now, I’m seeing that niche real estate investors – who historically operate with a bit of herd mentality – have crowned the car wash industry the latest investment darling. The evolution of the car wash industry and the resulting uptick in interest from investors, developers and operators alike has been fascinating to watch. Brands like Take Five, Waterway, Zips, Spotless and Mister Car Wash are just a few of the modern success stories bringing car wash investment into the headlines. So, what’s with the hype?

EXPERIENCE DRIVES CHANGE

The evolution of the car wash industry forms an intriguing narrative. From its origins to the present day, consumer preferences, technological advancements and environmental considerations have been the catalyst for change as the new-age car wash emerges at a rapid pace.

The primary car wash categories are 1) In-bay Automatic/Roll-over; 2) Self-Service; and 3) Conveyor. According to Grand View Research Inc., conveyor car washes are consistently the most profitable in the car wash sector in the U.S., where more than 72% of drivers use professional car wash services an average of 13 times per year. While the self-service wash still exists, it is becoming rarer as a better experience for slightly more money is likely available just down the street.

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Originally published on November 9, 2023, by Francis Chantree for NAIOP.

More and more Americans are moving to a different state, often to one inland and less densely populated but with great real estate options. The highest net migration is seen in Idaho, Montana and Vermont, plus Maine and other states offering plenty of space and housing, a trend that fuels the local real estate sectors.

A record 7.9 million Americans swapped states in 2021, 5.8% more than in the year before, and 2022 saw a further increase. By contrast, relocating within the same state decreased year-over-year by 7.7% in 2021. A recent StorageCafe study ranked states by net migration figures, analyzing the number of people arriving minus those leaving for every 1,000 residents.

New England and the Mountain West region are joined in popularity by states ranging from South Carolina to Nevada. Many relocate from often-expensive places like California or New York; better housing costs and availability – boosted wherever there is generous self-storage provision – are key drivers of interstate migration. Many people on the move don’t necessarily give up good salaries, not least because the enduring work-from-home trend can make anywhere in the country an option.

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Originally published on October 25, 2023 by Brielle Scott for NAIOP.

Geopolitical strategist Peter Zeihan combines an expert understanding of demography, economics, energy, politics, technology and security to help clients best prepare for an uncertain future. At NAIOP’s CRE.Converge last week in Seattle, attendees had an opportunity to hear from him at the closing keynote.

Zeihan covered everything from Stalin to NAFTA to the best time to buy a BMW. Here are just a few takeaways from his talk.

U.S. DEMOGRAPHIC SHIFTS AND THE LABOR FORCE

“What we’re seeing is a significant relocation of people – the biggest since the 1950s,” Zeihan said. People are moving to an arc of cities from roughly Salt Lake City down the Front Range into Texas, back up through the South to around Richmond. “That ‘U’ is seeing a fairly strong internal population migration. Everyone else is seeing a decline.” Which generations are moving? Those who have money to spend (Boomers) and families to raise (millennials).