Originally published on March 13, 2024, by Kathryn Atkins for NAIOP.

How do you know if you are optimizing the space in all your properties worldwide? How long would that take you to figure out with your current analytical tools?  

While everyone might think they know what AI is, a session at I.CON West this week in Long Beach, California, did the job of defining it. Taylor Odegard, founder, CEO, chairman and head of innovation for NavigatorCRE, said that AI needs two things before it can be defined as such: data analytics and machine learning. AI learns from each of these to deliver its “product.” 

For William O’Donnell, managing partner with Prologis Ventures, AI helps them optimize their decision-making, customer engagement, and operating efficiency. Clifton Harness, CEO and co-founder, TestFit, Inc., jumped in with a real-life example: How could their client mitigate the parking problem where parking spaces are laid out effectively, minimizing land use, while avoiding banging car doors and fender-benders? Using AI algorithms, the problem went from “If we cut off two inches on each side…” to “What do people do in the building for which we’re designing this parking lot? What does each end user say about the size of the parking spaces? Doesn’t Costco need wider spaces than the local movie theater? If it’s a hospital, then what? Is it a shopping mall?” 

Originally published on March 13, 2024, by Kathryn Hamilton, CAE for NAIOP.

Primarily used for the storage of trucks, trailers, containers, large equipment and materials, industrial outdoor storage (IOS) is a unique property type that comes with its share of challenges. A panel of IOS experts took the stage at I.CON West this week in Long Beach, California, to walk attendees through the pressures of this industrial-zoned land and why it’s important to an overall logistics portfolio. 

Moderated by Matthew Goelzer, AIA, LEED AP, principal with MG2, panelists included Jennifer Hall, partner, LIDD Consultants Inc.; James Hooks, senior vice president, CBRE; Michael Landsburg, chief development officer, NFI Real Estate; and Richard Weiss, senior vice president, Dalfen Industrial. 

Here are takeaways from their conversation: 

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

Understanding the ever-evolving regulations and reporting requirements around ESG can be challenging. A panel of industry experts spoke to I.CON West attendees on why these regulations are about more than compliance. They can lead to market differentiation, improved communication with tenants, and interest from global investors. 

Moderator Megan Krest, associate director of ESG at Cushman & Wakefield, asked the panelists about their work in California involving reporting and compliance. Ethan Gilbert, director of global ESG at Prologis, discussed AB 802, a California law requiring buildings over 50,000 square feet to submit annual energy consumption data to the state. 

“It’s a challenge because most industrial owners are operating under a triple net lease model, so utilities are under the direct control of our tenants,” he said. “The usage is not something the landlords have insight into, yet the state holds us accountable.” 

Originally published on March 13, 2024, by Marie Ruff for NAIOP.

“Developers are prioritizing projects that go beyond standard building codes to deliver high-performance buildings,” said Grant Waldron, director of sustainability strategy, GAIA, moderator of a panel on ESG (environmental, sustainability and governance) and decarbonization strategies at I.CON West in Long Beach, California. He identified ESG reporting and requirements, tenant demands, operational savings and capital markets as factors driving change. 

“What excites me about ESG is that as developers, we get to communicate all the things we’re already doing well,” said Josh Cox, LEED AP, senior vice president, development, Hillwood Investment Properties. For Hillwood, this includes steps like pursuing USGBC LEED certification to have third-party verification that can communicate the company’s strong environmental and sustainability commitment.  

While the environmental piece of ESG often takes center stage, the panelists talked about volunteering as part of the social component of ESG. “It’s phenomenal what you can do for your community, with your community,” said Erin Thrash, vice president, of architecture and design, Rexford Industrial Realty, Inc. Rexford bought a hotel that the company is going to turn into an industrial facility; the company opened the doors to 11 charities for a “shopping experience” where they picked up 4,000 items from the property including linens, dishwashers, pizza ovens and more. “All of these items would have been things that we might have had to pay to demo, but instead we gave that all back to the community.” 

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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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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Originally published on March 12, 2024, by Kathryn Atkins for NAIOP.

When J.C. Renshaw, head of supply chain consulting North America for Savills, started his career 35 years ago, supply chains had not been invented. Okay, they were there, but it was when the COVID-19 pandemic hit that “supply chain” became a household phrase – especially for people who were late to their local retailer to purchase toilet tissue. For the layperson, and even those in the industry struggling to manage their unwieldy supply chain, the definition is the same: getting the right “stuff” to the right place at the right time. Simply said, not easily done. 

In his discussion, Renshaw set the stage for where we are now, covered some of the current megatrends challenging supply chains, and discussed the many countervailing and interwoven forces at work. The goal is to find and wield the magic wand that will result in even the smallest competitive edge in the marketplace. 

From labor shortages, retention issues, and rising costs to international transit through the Suez and Panama Canals, and huge fluctuations in inventory level requirements, supply chain leaders have their hands full. While port volumes and congestion have normalized, huge ports (Los Angeles and Long Beach, and New York/New Jersey) find themselves competing for business – and port incentives are a novel approach the industry has had to embrace.  

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.

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

That’s a wrap on the 2024 NAIOP NC Conference! Hosted by NAIOP Charlotte, NAIOP 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: https://lnkd.in/gFCxnR7x

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!

Presenting: LS3P ASSOCIATES LTD.
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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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.

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

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Thanks to our sponsor:

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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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)

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)

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.

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.

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

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

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Thanks to our sponsor:

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

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.

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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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