The Urban-suburban Office Market Upswing

Posted on March 15, 2018

According to a VTS blog post, The Rise of the “Urban-Suburban” Office Market, many companies want their offices to be in dynamic locations that appeal to young professionals, but that no longer means only downtown markets. Suburban office construction was strong throughout 2017, but the markets that will fare the best will have “urban-type” amenities such as walkability, public transit, a variety of housing options, retail and restaurants. The article warns, “Owners and developers of suburban office buildings that don’t embrace this urban-suburban ‘vibe’ might find it tougher to justify new developments or sign new tenants. Simply offering big office buildings and huge surface parking lots are not often enough to draw companies today. It’s more about creating a mixed-use destination.”

Welcome to the 2018 NAIOP Charlotte Board

Posted on March 15, 2018

NAIOP Charlotte is pleased to announce our 2018 Board of Directors.

President - Cheryl Steele, Horack Talley
President Elect - Tracy Dodson, Lincoln Harris
Secretary - Scott Harris, Choate Construction
Treasurer - Alyson Craig, UNC Charlotte | Childress Klein Center for Real Estate
Immediate Past President - Brendan Pierce, The Keith Corporation
Past President - Jim Gamble, Bohler Engineering

Click here for a full list of the 2018 NAIOP Board of Directors

CRE's Critical Contributions to US and State Economies in 2017

Posted on March 14, 2018

By: Dr. Stephen S. Fuller

Development and construction of new commercial real estate in the United States – office, industrial, warehouse and retail – generates significant economic growth at the state and national levels. This annual study, “The Economic Impacts of Commercial Real Estate,” published by the NAIOP Research Foundation, measures the contribution to GDP, salaries and wages generated and jobs supported from the development and operations of commercial real estate.

Commercial real estate development and operation of existing buildings generated the following economic benefits:

  • Supported 7.6 million American jobs in 2017 (a measure of both new and existing jobs).
  • Contributed $935.1 billion to U.S. GDP.
  • Generated $286.4 billion in salaries and wages.
Click here to read more.

Last Chance to Register for the NAIOP NC Conference

Posted on March 14, 2018

This is the last week to register for the NAIOP NC Conference. Hope to see you in Pinehurst next week! 

NAIOP Members: $330
NAIOP DL Members: $300
Industry Guests: $400

Click here to register.


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Welcome New NAIOP Charlotte Members

Posted on March 13, 2018

We are proud to introduce our new association members! The following is a list of individuals who have joined NAIOP Charlotte since October 5, 2017:

  • Timothy Bahr, Healthcare Realty
  • Justin Bishop, JLL Bank of America
  • John Brock, Edwards Construction Services
  • Andreane Champagne, DCE Solar
  • Lee Deal, Trademark Visual
  • Michael Duganich, TD Bank N.A.
  • Sabrena Fernandez, Spangler Restoration
  • Mohammed Idlibi, UNCC - MSRE
  • George Jenison, Jenison Construction Incorporated
  • John Alexander Kincaid, Southside Constructors Inc.
  • Jim Langlois, McMillan Pazdan Smith Architecture
  • Bradley Loman, GreerWalker LLP
  • Stephen McClure, The Spectrum Companies
  • Derek Meachum, Momentum Construction
  • Scott Muller, Trademark Visual
  • Brian Richards, Beacon Partners
  • Brian Simpson, M+A Architects
  • Michael Tuck, Samet Corporation
  • Cary Watts, Burton Engineering Associates

Crunching the Numbers on the 2018 Tax Law for CRE

Posted on March 13, 2018

A recent Advantage Series webinar helped members understand the implications of the new 2018 Tax Reform law, thanks to Crystal Christenson of the accounting firm Wipfli, LLC.

Catch a recap on the Market Share blog and listen to the archived webinar.

Building a Sound Infrastructure Plan

Posted on March 12, 2018

Transportation Secretary Elaine Chao says details about the Trump administration’s infrastructure plan should be coming out soon. The goal of the plan is to spend roughly $200 billion in federal funds and generate $1.5 trillion in spending by state and local governments and private investors for transportation, energy, water and other infrastructure projects.

Government investment in infrastructure is a priority issue for NAIOP in 2018. Last month, NAIOP President and CEO Tom Bisacquino wrote an op-ed for Fox News, reminding readers: “In the real estate industry, infrastructure encourages development. People are more likely to develop property, start businesses and choose to live where the roads, bridges, ports and power grid are dependable.”

Last week, Chao told the American Association of State Highway and Transportation Officials that the plan’s guiding principles are:

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New Report: Industrial Space Demand Forecast Q1 2018

Posted on March 9, 2018

By: Dr. Joshua Harris

Industrial Demand to Remain Strong as Market Becomes Undersupplied

Demand for U.S. industrial space is expected to remain robust and steady throughout 2018, with quarterly net absorption forecast to average 55.6 million square feet. This is higher than the 44.1 million square feet of actual net absorption, on average per quarter, recorded in 2017, but lower than the 60 million square feet of quarterly net absorption forecast six months ago. According to Dr. Hany Guirguis, Manhattan College, and Dr. Joshua Harris, New York University, the predicted increase over 2017 figures is due to the faster and broader macroeconomic growth and increased consumer spending expected in 2018.

The model, run on a quarterly basis, forecasts slightly lower industrial space demand in 2019, when inflation and interest rates are expected to rise, moderating growth. U.S. gross domestic product grew by 2.6 percent in the fourth quarter of 2017, according to the advance estimate released by the U.S. Bureau of Economic Analysis, and by 2.3 percent for all of 2017. (For comparison, U.S. GDP grew by just 1.5 percent in 2016.) Sustained growth, especially with low unemployment at 4.1 percent as of January 2018, will translate into increasing demand for industrial properties as industrial users see more justification for investment and expansion of facilities.

Click here to read more.

Job Training, Higher Wages Needed to Spur US Economic Growth

Posted on March 8, 2018

An analysis by the McKinsey Global Institute summarized in the Harvard Business Review concluded increasing consumer demand for goods and services is key to restarting growth across advanced economies. U.S. economic growth has averaged only 2 percent per year since 2010, while productivity growth, a key to increasing living standards, has been “languishing near historic lows since the financial crisis.” The report cites slowing population growth, flat wages and weak corporate investment as contributing to lower demand. This trend can be potentially reversed by “focusing on productive investment as a fiscal priority, growing the purchasing power of low-income consumers with the highest propensity to consume, unlocking private business and residential investment, and supporting worker training and transition programs to ensure that periods of transition do not disrupt incomes.”

Charlotte Water Lengthening Sanitary Sewer Capacity Reservations

Posted on March 7, 2018

With capacity challenges mounting in numerous basins across the City, Charlotte Water is taking steps to assure developers they’ll have the sewer taps for their projects when the need arises.

Charlotte Water announced this week that it will now be extending its capacity reservations from 12 to 24 months, effective for all connection applications approved on or after January 1st, 2017.  As a result, there will be no expiring capacity reservations for 2018.

The Capacity Assurance Program (CAP) started in 2017, as a way for developers to reserve sanitary sewer capacity after a capacity review is completed and a connection is approved. The program reviews the capacity of the system from the point of connection through the local gravity system, through trunk lines and eventually to the wastewater treatment plants. It ensures that new connections to wastewater treatment system won’t overwhelming existing pipes and plants. 

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2018 Workplace Trends: Healthier and Homier

Posted on March 7, 2018

Architect and Work Design magazine publisher Bob Fox has identified seven major trends that he predicts will make an impact on the workplace in 2018. To attract and retain top talent, he believes businesses will create health-oriented workplaces that offer a sense of community through wellness programs and collaborative projects with other building tenants. Fox also sees the rise of “resimercial” office designs that bring the comforts of home into work and can accommodate a broader range of functions. Other trends Fox predicts include office designs that reflect the companies’ missions, the prioritization of overall value rather than cost reduction when redesigning space, the use of virtual assistants, and women leading change to create healthier, higher-performing workplaces.

Legal Agreements for Mixed-use Projects

Posted on March 6, 2018

By: Paul N. Dubrasich

Anyone considering developing a mixed-use project should be aware of these key legal, design and management considerations.

Mixed-use development projects of all types – including urban infill projects, transit-oriented developments and walkable lifestyle communities – have taken hold in urban centers and suburban areas across North America. Millennial consumers, as well as downsizing retirees, increasingly favor living within walking distance of stores, their favorite cycling and barre classes, restaurants and cultural venues, rather than having to drive to homes at the distant reaches of urban sprawl.

Local governments love mixed-use development for a variety of reasons. They put less pressure on infrastructure cost than more sprawling development, create accessible job opportunities, reduce traffic and help stimulate local commerce. Developers are responding to the evolving demographics and environmental forces driving these types of developments, not just in the urban core, but also in outlying areas, especially on sites close to public transportation.

Charlotte Hosting Unified Development Ordinance Summit on March 24th

Posted on March 6, 2018

The City of Charlotte is a little more than a year into a multi-year effort to draft a comprehensive Unified Development Ordinance (UDO), which will update the policies and regulations that guide land use and development in Charlotte. When finished, the UDO will combine zoning districts and development ordinances in a single document that should allow for more a streamlined regulatory process.

The two major components of the UDO will include:

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City Releases TOD Ordinance Draft, Seeks Feedback from Development Industry

Posted on March 5, 2018

The City of Charlotte has released a draft of its Transit-Oriented Development A (TOD-A) ordinance, which would allow higher-density, mixed-used development within a quarter-mile of transit stations like the CATS Blue Line.

TOD-A is the first of at least 4 transit-oriented zoning districts that the Planning Department plans to unveil in the next few months, and is intended to accommodate the highest-intensity development along the transit corridor, with allowable building heights as tall as 250′.

After setting base densities and building standards, the ordinance uses a voluntary points system to incentivize developers to meet aesthetic design, open space and affordable housing objectives through allowances for greater building heights.

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California Considering Change that Threatens CRE

Posted on March 5, 2018

Interest groups in California are collecting signatures in order to place an initiative on the November ballot that could change the way property taxes are calculated.

If passed, the move (known as “split roll”) would place a heavier property tax burden on commercial real estate and hinder economic growth. Any NAIOP member doing business in commercial real estate in California would be impacted by the ballot initiative.

Since the passage 40 years ago of Proposition 13, the tax rate on residential and commercial property has been treated the same way. Prop 13 controlled the growth of property tax rates by limiting annual increases of property assessments to no greater than 2 percent each year. NAIOP members participated in discussions during the California Business Properties Association winter board meeting last week on ways to preserve Proposition 13 and its economic benefits.

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Energy Code Exemption for Industrial Buildings Took Effect March 1

Posted on March 2, 2018

An Energy Code exemption championed by REBIC and NAIOP will finally take effect this week, after the Rules Review Commission set an effective date of March 1, 2018, for N.C. Session Law 2017-10, formerly known as SB131.

Language in the bill, which was signed into law during the 2017 session of the General Assembly,  excludes from state Energy Efficiency Code requirements any buildings with the following use classifications:

  • Factory Group F
  • Storage Group S
  • Utility & Miscellaneous Group U

Furthermore, language in the legislation introduced by Representative Bill Brawley ensures that the energy code exclusion ‘shall apply to the entire floor area of any structure’ included in the provision. This language was intended to prevent the office or showroom portion of a warehouse, industrial or manufacturing building from having to meet energy efficiency code requirements, when the majority of the structure does not.

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The Rise of Smart Buildings As-a-Service

Posted on February 28, 2018

A recent Memoori report, Occupancy Analytics & In-Building Location Based Services 2017 to 2022, finds “value-added services such as space utilization, indoor positioning, connected lighting and asset tracking are helping to drive the adoption of As-a-Service business models.”

Smart Building As-a-Service refers to third-party companies working with building owners to deploy technology to maximize efficiency and use data-driven analytics to understand better how people operate within the building. For example, if building owners and managers subscribed to a sensing-as-a-service firm, the firm would be responsible for not only installing the equipment but also managing, analyzing and reporting the data the sensors collect.

Industrial Sector Strong in Q4 2017 and into 2018

Posted on February 27, 2018

According to a REIS, Inc. analysis, the industrial sector experienced robust growth at the end of last year and will continue to expand during 2018. Warehouse and distribution space vacancy is at a historic low and flex/R&D space vacancy rates fell in the fourth quarter. Both subcategories had strong rent growth due to “improved trade and robust e-commerce sales.” Additionally, market indicators such as increasing e-commerce sales, manufacturing sector expansion, growing aggregate trade and added industrial-related jobs all indicate the sector is poised for further growth in 2018.

Congress Takes Action to Slow "Drive-by" Lawsuits

Posted on February 26, 2018

Last week, the House of Representatives passed H.R. 620, a bill to improve the Americans with Disabilities Act (ADA) by reducing opportunities for people to file nuisance lawsuits under the law. The legislation, which allows property owners to fix any alleged violations while keeping penalties in place for businesses that remain in noncompliance, passed 225-192 and will now move to the Senate.

The measure is aimed at eliminating so-called “drive-by lawsuits,” a tactic used by some “unscrupulous trial lawyers,” as House Judiciary Committee Chairman Bob Goodlatte (R-VA) called them, whose lawsuits, he said, “[divert] money from accessibility where it belongs.” As documented in a 60 Minutes report last year, some lawyers cruise around local communities in an attempt to spot minor ADA infractions at offices, gas stations, malls and other locations. In some cases, these lawyers don’t even bother to leave their homes, and instead use aerial images from Google Maps to target alleged violators.

H.R. 620 requires that anyone making a complaint against a business must file a written complaint. It gives the business owner 60 days to fix any violation, and up to an additional 60 days if the owner is acting in good faith and can demonstrate substantial progress toward making the changes. Owners who refuse to address violations could be sued.

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City Releases TOD Ordinance Draft, Seeks Feedback from Development Industry

Posted on February 26, 2018

The City of Charlotte has released a draft of its Transit-Oriented Development A (TOD-A) ordinance, which would allow higher-density, mixed-used development within a quarter-mile of transit stations like the CATS Blue Line.

TOD-A is the first of at least 4 transit-oriented zoning districts that the Planning Department plans to unveil in the next few months, and is intended to accommodate the highest-intensity development along the transit corridor, with allowable building heights as tall as 250′.

After setting base densities and building standards, the ordinance uses a voluntary points system to incentivize developers to meet aesthetic design, open space and affordable housing objectives through allowances for greater building heights.

Read More