Posted on September 1, 2017
The following resource is from NAIOP's I.CON: Trends and Forecasts, June 8-9 in Long Beach, California. More than 600 of industrial's top leaders gathered to connect, learn and make deals at CRE's hottest industrial event.
Posted on August 31, 2017
By: Renee Eshelman
Gone are the days of handshakes and scribbled-napkin deals. Today, most commercial real estate transactions are memorialized with a letter of intent (LOI) to outline the main agreed-upon deal points for a proposed transaction. Although signed by each party, LOIs are typically stated to be “nonbinding” and therefore not legally enforceable, merely an agreement to agree.
The nonbinding nature of LOIs can be both a blessing and a curse. Busy landlords considering a new lease might review the main points of the deal that affect their bottom line — lease term, rental rate, tenant improvements, etc. — and, finding that everything seems correct, might consider themselves finished. Why not skim over or altogether avoid reviewing the rest? The details can be worked out in the lease; there seems to be no need to put themselves to sleep reviewing the fine points now. Why spend the time and expense of legal review? What harm can these provisions really do? The answer: quite a bit!
Posted on August 30, 2017
By: Dr. Joshua Harris
Current Forecast: Third Quarter 2017 Report
The NAIOP Industrial Space Demand Forecast is based on a predictive model that forecasts demand for industrial space at the national level on a quarterly basis for eight consecutive quarters.
Posted on August 29, 2017
The law of supply and demand hasn’t been repealed, and that’s causing commercial real estate construction prices to jump, especially in the mid-Atlantic, Texas and Louisiana.
The problem is there aren’t enough skilled laborers for all of the new construction builders would like to do. The scale of the problem increases for larger projects, which require more skill and teamwork. “There aren’t enough companies with the workforce required for such complex projects,” Perryman Construction CEO Angelo Perryman tells Forbes.
The article adds that: “Multifamily buildings from eight to 24 stories tall have increased in construction cost by $23.40 per SF from 2013 to 2016, according to a Fannie Mae study, and they are forecast to jump another $15 per SF in 2017.”
Posted on August 28, 2017
The office market absorbed 8.8 million square feet of space in the second quarter, according to a report from JLL. More than half of that growth came from two markets: Seattle-Bellevue and Dallas.
“There were 11.7 million square feet of new deliveries in Q2, which helped push vacancy up to 14.8 percent,” according to JLL’s latest outlook. “Even as demand stabilizes, asking rents for new product have risen 3.2 percent over the year and by 4.9 percent for CBD Class A space.”
“Moving into the second half of 2017 and into 2018, we expect the wave of new supply to deliver over the next six quarters will markedly alter the office landscape, increasing competition among landlords for tenants and stabilizing rents in the process,” the report states.
Posted on August 25, 2017
Written by Cinda Kelley
Employers in Plainfield, Indiana, are helping fund connector bus service that brings employees to local industrial parks.
It's been more than 25 years since the central Indiana town of Plainfield embraced the transportation, warehouse and distribution industries with an aggressive, innovative business attraction effort. The town’s work paid off handsomely, and Plainfield is now one of North America’s key logistics hubs, with more than 40 million square feet of facilities at the end of 2016.
Posted on August 24, 2017
Written by Brielle Scott
You’ve heard of sailing a ship with a “skeleton crew,” but what about no crew at all?
The ghost ships from tall tales of pirates and buried treasure are no longer the stuff of fiction: A Norwegian company is developing a fully autonomous container ship that will eventually troll the high seas with no crew aboard.
Posted on August 23, 2017
In a press conference last Tuesday, President Donald Trump announced his latest executive order, which addressed infrastructure permitting. Though the event ultimately devolved into a controversial discussion about the tragic events in Charlottesville, the order offers some insight into the administration’s strategy on infrastructure policy.
The executive order, entitled “Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure,” is aimed at expediting permitting for infrastructure projects. It broadly tasks federal agencies with proposing ways to reduce average permitting time from the current average of seven years down to two years, and assigns an agency to each future project, placing them in charge of navigating the bureaucratic process. To demonstrate its inherent complexity, Trump unveiled a six-foot long graphic depicting the permitting process at the press conference.
Trump has often spoken of a $1 trillion infrastructure plan, though none has materialized as of yet. His budget request proposed a mix of $200 billion in tax credits and direct funds, but it remains unclear whether this could spur enough private investment to reach $1 trillion. To complicate things further, the president recently announced that he would scrap plans to create an infrastructure advisory panel, which would have allowed the private sector to share input.
Posted on August 23, 2017
Join CoreNet Global Carolinas for their 2017 Mega Event on September 13 at 1:30pm at The Ritz Carlton.
Agenda
12:45-1:30 PM – Event Registration
1:30-3:15 PM – Plenary Session/ Keynote Speaker (Paul Depodesta)
3:30-4:25 PM – Breakout Session 1
4:30-5:25 PM – Breakout Session 2
5:30-7:00 PM – Networking and Cocktail Reception
Posted on August 22, 2017
By: Amanda Tran
AMID A CHALLENGING retail landscape dominated by news of brick-and-mortar store closings, the food hall has emerged as a promising opportunity for the commercial real estate industry and food entrepreneurs. Although food halls vary greatly in size and focus — ranging from “mega” halls, such as Mario Batali’s Eataly in Boston, Chicago and New York, to much smaller venues in aging strip malls, such as The Block in Annandale, Virginia, a suburb of Washington, D.C. — they all feature a mix of vendors offering high-quality artisanal food in a communal atmosphere.
Garrick Brown, vice president and head of retail research at Cushman & Wakefield, credits food halls’ explosive growth to the rise of “foodie culture” over the past 20 years and to the influence of millennial consumers. Brown explains, “For millennials, the emphasis is on authenticity. Processed foods are out; authentic and locally sourced foods are in.”
Posted on August 21, 2017
By: Hazel Garcia
STEM careers, also known as careers involving Science, Technology, Engineering, and Math, are some of the best paying jobs available. Requiring only a Bachelor’s degree for most for most of them, they are one of the better education bargains as well. The high pay that comes with these jobs combined with the smaller amount of education required helps minimize student loan debt as well, which leads to a better quality of life.
In the past couple of decades, more women are entering STEM programs to get the education required for these high-paying positions. While the number of women entering STEM programs has grown considerably, it’s still a male-dominated industry. Depending on which state you live in, there might as many as 4.5 times more men working in STEM than women.
Posted on August 17, 2017
The co-founder of one of the nation's first funds to provide real estate acquisition and private debt servicing to cannabis-related ventures spoke at I.CON '17: Trends and Forecasts in June. Access the presentation and session recording on the marijuana market as it relates to industrial space, risks to landlords, structuring leases with marijuana tenants and more on the conference resources page.
Posted on August 17, 2017
Business North Carolina is seeking nominations for its annual Building North Carolina awards, which will be featured in their November issue. Submit your suggestions on the most important commercial real-estate projects completed in the state between July 1, 2016 and June 30, 2017 and the developer who has had the biggest impact on the industry.
Building North Carolina winners will be selected based on design, innovation and community impact in such categories as best public project, commercial project, renovation, and overall design. Submitted projects will also be considered for a Carolinas AGC 2017 Pinnacle Award, bestowed at its annual convention in January.
Entries should be submitted no later than Aug. 22.
Posted on August 16, 2017
Are you interested in going beyond local NAIOP relationships by networking with other executives from across North America in your industry segment?
Learn about the benefits of participation, eligibility requirements and how to apply to the three types of Forums.
The application period for the National Forums is now open! Create an account and apply using our online tool — applications are due by September 11, 2017. Notification of appointment will be emailed and followed by a letter.
Posted August 15, 2017
Loan originations for commercial and multifamily properties in the second quarter of 2017 jumped 20 percent from the second quarter of 2016, according to data from the Mortgage Bankers Association. Such loan originations were 28 percent higher than in the first quarter of the year.
“The second quarter saw a 91 percent year-over-year increase in the dollar volume of loans for industrial properties, a 33 percent increase for office properties, a 21 percent increase for multifamily properties, a 14 percent increase for hotel properties, a 7 percent increase in health care property loans, and a 9 percent decrease in retail property loans,” MBA reports.
It finds that the jump in loan originations comes despite a slowdown in the volume of sales transactions.
Posted August 14, 2017
As more millennials enter the workforce, property owners and operators are responding to their demands by reshaping office spaces. In “Special Report Suburban Office Challenging CBD,” Marcus & Millichap notes that many companies are moving to downtown locations in large cities. But the report adds that suburbs are adjusting as well, and explains how they’re being successful.
“Numerous suburban office locations have become increasingly competitive, however, by clustering in walkable villages featuring many of the amenities and services of urban environments,” the report notes. “These locations are generally more affordable than their urban counterparts while remaining attractive to employees seeking a variety of offerings that are within walking distance.”
The report finds that almost one-quarter of commercial real estate transactions in 2014 involved urban properties. “Since then, investors have once again begun to focus on suburban options, restraining downtown activity to 21.7 percent of 2016 office sales. The flow of capital reflects the convergence of opportunity, yield, and perceptions of future growth, and it appears investors’ attention is once again moving beyond the core.”
Posted August 11, 2017
Retail employment across the country has taken a hit in 2017, as chains including Macy’s, Sears and JC Penney have all shuttered locations. A new report from Reis indicates the country has too many retail outlets and predicts where to future closings may occur.
“A good way of measuring what markets may be over-retailed is to compare retail employment to population,” the report says. It finds Little Rock, Arkansas; Syracuse, New York; Omaha, Nebraska; Orlando, Florida; and Louisville, Kentucky, are the most over-retailed, based on their growth over the last five years. California’s San Bernardino/Riverside, Oakland-East Bay and Los Angeles markets came in as the least over-retailed, along with Tucson, Arizona, and Tacoma, Washington.
“While the numbers show that the retail industry could, in fact, be over-saturated, the impact of this saturation on the real estate industry may not be as troublesome as many would presume,” the report says. That’s partly because different businesses, such as restaurants, yoga studios, and medical centers are taking over vacated retail space. Despite challenges, “the retail industry is performing better than many would assume,” the report concludes.
Posted August 10, 2017
A recent report prepared for the Energy, Kresge and Barr Foundations finds that adoption of building resiliency standards – which provide guidance for preparing buildings, infrastructure, and other systems for natural or man-made hazards – isn’t as widespread as it could be.
“[M]ost of the standards are in pilot phases or with their first customers, and many organizations are involved. Moreover, interviews and focus group conducted for this project revealed that facilities managers, participants in the real estate sector, and coordinators of business associations and on-the-ground projects had little awareness of the standards,” the report finds.
Further, it says real estate industry associations aren’t doing enough to promote information about resilient building techniques or the existence of standards. “The National Institute for Building Sciences, RELi, FORTIFIED, and other entities are leading efforts to quantify the costs and benefits of resilience, which can support effective policy design and encourage investment. Such research efforts could lead to more targeted, performance-based outcomes for resilient buildings, and a clear articulation of resulting monetary returns,” the report concludes.
Posted August 9, 2017
The House Transportation and Infrastructure Committee last week voted unanimously to advance H.R. 1758, the Brownfields Reauthorization Act of 2017. As its name suggests, the legislation would formally reauthorize the brownfields program for the first time since 2006, when authorization for the program expired. Congress had continued to appropriate funds despite a lack of authorization, but at varying and often decreased levels. Reauthorization provides supporters of brownfields redevelopment efforts with added leverage in future funding fights. H.R. 1758 makes important adjustments to the program, giving states added flexibility in spending brownfields grant funds, and expanding the universe of eligible grant recipients to include non-profit groups.
Administered by the Environmental Protection Agency, the brownfields program assists states in the cleanup and remediation of properties where contamination is suspected. The fear of unknown and potentially exorbitant costs – particularly those stemming from liability – at these sites often forces developers to look elsewhere for new opportunities. As a result, brownfields go untouched, which can depress surrounding property values and deprive local communities of much-needed tax revenue. Remediation of brownfields sites can yield substantial returns on taxpayers’ investment. Since its inception, the brownfields program has created 10 jobs for every redeveloped acre, and has leveraged $18 in private and state development funds for every $1 of taxpayer-funded brownfields grants.
NAIOP joined several other members of the real estate community in support of the bipartisan legislation, and will continue to advocate for reauthorization of and funding for the brownfields program as the bill is considered by the full House of Representatives.
Posted on August 8, 2017
Written by Thomas J. Bisacquino
The world today moves faster than it ever has before. Smartphones provide immediate access to people and information. Retailers deliver with blinding speed, often the same day. But not everything should, or can, be immediate. That’s true in tax policy, and in commercial real estate (CRE).
In the CRE industry, owners and operators often must wait years, even decades, to recoup their investments. Meanwhile, they keep pouring further spending into their properties to keep them up to code and to deliver the perks tenants demand. CRE doesn’t deliver immediate rewards, but forces owners to make the necessary long-term investments that will pay off for them and the economy.
