Originally published on July 9, 2021 by Shawn Moura Ph.D. for NAIOP E-Newsletter.

In June, NAIOP conducted its eighth survey of its U.S. members on the impacts of COVID-19. Since April 2020, the association has examined the pandemic’s effects on commercial real estate and how firms have responded. Most American adults are vaccinated, and daily coronavirus case counts have plummeted in the five months since the previous survey. This has allowed a widespread return of customers to restaurants and retailers, and most observers now expect that office occupancy rates will rebound in the fall when schools re-open for in-person instruction. 

Respondents to the survey report a strong recovery in retail property rent collections, as well as retail property acquisitions and development activity, alongside continued favorable trends for industrial, office and multifamily properties. Less than one-quarter of respondents now expect the pandemic to significantly affect their business operations for more than a year, and respondents are much more optimistic about employment within their own firms than in previous surveys. 

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Originally published on July 7, 2021, by Toby Burke for NAIOP's blog.

NAIOP of North Carolina recently hosted the first in-person Day at the State Capitol since the outbreak of the pandemic. It provided NAIOP members from the Charlotte, North Carolina Piedmont Triad, and Raleigh-Durham chapters with the opportunity to advocate for effective policies that advance commercial real estate development within the state. This year’s legislative priorities focused on three areas: economic development, tax reform, and regulatory reform.

Regulatory reform emerged as a dominant issue during NAIOP of North Carolina’s meetings with state legislators. In particular, NAIOP members advocated for strengthening the state’s brownfield program within the North Carolina Department of Environmental Quality. There is growing concern within the commercial real estate community that the administrative delays and inconsistencies with the current program are discouraging the redevelopment of dormant or underutilized contaminated properties.

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Originally published on July 13, 2021, for the NAIOP E-Newsletter.

The Senate returns this week from its July Fourth recess to continue work on an infrastructure package supported by President Joe Biden and a bipartisan group of 22 senators, which the White House hopes will garner the needed 60 votes in the Senate needed for passage. At the same time, House and Senate Democrats are working on a parallel track to develop a budget bill that will include Democratic leadership priorities and that can pass the Senate with only Democratic votes.

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We are proud to introduce our new association members! The following is a list of individuals who have joined NAIOP Charlotte since March 12, 2021:

• Brian Taylor, Miller-Valentine Group
• Caleb Gass, Heritage BlueFire
• Chandler Markey, Sands Investment Group
• Philip Elliott, Consulting Services Incorporated
• Elsa Simaan, Stewart Title Guaranty Company
• Greg Hartley, Acro Development Services, PLLC
• HeatherMucci, Novus Architects
• John Moscati, GTA Associates, Inc.
• Philip Potter, Whiting-Turner Contracting Company
• Allen McDowell, Bohler Engineering
• AnthonyZook, Bohler Engineering

Originally published by Ron Derven for NAIOP's Development Magazine Summer 2021 Issue.

The post-pandemic period could see a lot of innovation and experimentation in commercial real estate.

COVID-19 delivered a gut punch like no other to the commercial real estate industry last year, with transactions in the second quarter of 2020 plummeting approximately 40% over the same period in 2019.

By the fourth quarter of 2020, however, sales activity had nearly recovered, according to John Chang, director of research with Marcus & Millichap.

“Investors adapted to the new climate and devised new solutions to address the many obstacles to getting business done,” Chang said. “Barring a new, severe and deadly outbreak, COVID-related challenges ahead will likely be speed bumps for the commercial real estate industry rather than roadblocks.”

Originally published on June 29, 2021 for NAIOP E-Newsletter.

Last week President Joe Biden announced agreement with a bipartisan group of senators, led by Kyrsten Sinema (D-AZ) and Rob Portman (R-OH), on a bipartisan infrastructure plan. The infrastructure deal would total $1.2 trillion over eight years, with approximately $579 billion in physical infrastructure, including roads, bridges, transit, water and sewer projects, and upgrades to the electrical grid. However, the nascent deal almost unraveled when Biden, in an effort to appease Democratic progressives, promised not to sign the legislation unless it was simultaneously accompanied by a reconciliation bill incorporating elements of his other domestic spending priorities.

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Originally published on June 15, 2021, by Katie Sloan for Rebusiness Online.

When it comes to mall redevelopment, one of the biggest hurdles is changing the business community’s perception that enclosed malls are only for retail use, says Sean Garrett, president of acquisitions and director of community relations for East Peoria, Illinois-based Cullinan Properties Ltd. 

“There is no reason an insurance office can’t be right next to a retailer and a neighbor of a dentist,” states Garrett. “Downtowns and Main Streets have been developed this way for generations.” 

Cullinan recently followed this approach when it rebranded its Quincy Mall in Quincy, Illinois, to Quincy Town Center. One of the anchor tenants is now Quincy Medical Group, which backfilled a former Bergner’s department store. For Garrett, merging retail and medical uses today is a “natural fit.”

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Originally published on June 15, 2021, by Esther Fung for the Wall Street Journal.

During the worst of the pandemic, many landlords offered deals where ailing retailers paid a percentage of their monthly sales in rent—rather than a fixed amount—to help them survive. Now, this once temporary way of charging tenants looks poised to outlast Covid-19.

More shopping-center owners are signing new leases where rent is tied directly to a portion of sales, at least for a period. These percentage-rent leases are especially attractive to newer retailers, offering some flexibility so that they aren’t saddled with large losses as they are starting out.

While most landlords tend to prefer the reliability of a fixed monthly rent payment, the wider use of percentage leases reflects how much retail has become a renters’ market.

Originally published on May 2021 by Hany Guirguis, Ph.D., Manhattan College and Michael J. Seiler, DBA, William & Mary and the University of Cambridge.

Office Space Absorption Projected to Stabilize by Mid-2022

The U.S. economy is experiencing a strong rebound from the COVID-19-induced recession, resulting in job growth in office-using sectors. However, tenant-safety concerns remain a drag on office leasing. The U.S. office market posted continued declines in net absorption in the fourth quarter of 2020 (-26.7 million square feet) and the first quarter of 2021 (-34.8 million square feet). Nonetheless, as coronavirus safety concerns abate and the economy continues to expand, negative net absorption is forecast to moderate over the next two quarters, with a return to positive absorption in the fourth quarter of this year (Figure 1). Quarterly net absorption in 2022 is expected to average 11.7 million square feet, in line with the 2015-2019 quarterly average of 11.6 million square feet.

At the time of this writing, more than half of eligible Americans have received at least one dose of the COVID-19 vaccination, and more than one-third are fully vaccinated. As vaccination rates increase and new coronavirus cases decline, more employers are re-opening their offices. However, a widespread return to the office will likely depend on the return of K-12 schools to in-person instruction. Many schools currently rely on a full- or part-time remote schedule, requiring parents of young children to either stay home or seek alternative childcare arrangements. With vaccination rates on the rise, most schools are now planning to resume full in-person instruction in the fall. As safety concerns about returning to the office recede and schools reopen, office absorption should begin to respond to the current upswing in economic growth.

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Originally published on June 22, 2021, for NAIOP E-Newsletter.

In the wake of failed infrastructure discussions between the White House and Senate Republican leadership, represented by Senator Shelley Moore-Capito (R-WV), the focus of attention has turned to the second group of Senators attempting to forge a bipartisan deal. The effort, led by Senators Kyrsten Sinema (D-AZ) and Rob Portman (R-OH), gained momentum last week with the endorsement of 21 senators, including 11 Republicans and 10 Democrats. A draft framework of the plan leaked to the press last week, but the particulars of the plan remain in flux, subject to changes based on a review by President Joe Biden and the White House staff.

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The following statement was issued by REBIC on Tuesday, June 22, 2021.

Last night the “Plan Policy” section of the 2040 Comprehensive Plan passed the Charlotte City Council by a 6-5 vote. This outcome had been widely expected for several weeks. In the end, REBIC took the position that moving ahead to the more difficult challenges, such as the debate over the “Implementation Strategy” and “Manuals and Metrics” sections, as well as the Place Type mapping and ultimately the Unified Development Ordinance (UDO) was in the best interests of all parties. It was evident that members of City Council had withdrawn to their respective corners and that any further compromise was not possible.

Following an introduction, the real estate industry faced some big hurdles:

• Removal of Mandatory impact fees
• Removal of Mandatory inclusionary zoning
• Removal of Mandatory Community Benefit Agreements
• A broken process set up to accept comments but one that provided little feedback in return
• A City Council (with the exception of a few members) with little knowledge of the Plan
• A tight, artificial timeline with a proposed vote on the entire document by April 26th

After last night here’s where we are:

Breakfast with Principals
June 29 & 30 | 8:00am – 9:00am ET 

A few spots are still available to attend next week’s Breakfast with Principals. This event provides an opportunity to meet with fellow members, make connections, and discuss what is going on with NAIOP and Charlotte’s commercial real estate industry while enjoying breakfast from two of Charlotte’s local hot spots Community Matters Café and Nick’s Cafe.

Table hosts are Pete Kidwell, Beacon Partners, Pat Pierce, Selwyn Property Group, Sagar Rathie, Crescent Communities, and Chris Thomas, Childress Klein.

Space is limited to 6 people per table, with a maximum of 2 tables per location. This is a NAIOP member-only event.

There is no charge to sign up for this event. Breakfast will be on own – make sure to come hungry and help support local businesses! 

Register for Nick's Cafe on June 29

Register for Community Matters Cafe on June 30

Questions

If you have questions, please contact the NAIOP Charlotte office at [email protected]. 

Summer Social
July 14 | 4:30pm – 6:00pm | Charlotte Beer Garden

Network with NAIOP members and guests at the Charlotte Beer Garden! Make new connections, catch up with friends, and enjoy the Charlotte summertime!

Registration

Registration for this event is $15 for NAIOP members and $20 for non-members through July 9. Rates increase to $20 for NAIOP members and $25 for non-members on July 10.

Location

This event will be held at the Charlotte Beer Garden, 1300 S Tryon St., Charlotte, NC 28203. 

CREW Charlotte is excited to host its first in-person luncheon in over a year! Space is limited so do not delay.

Learn more about the Charlotte Future 2040 Comprehensive Plan from Assistant City Manager, Taiwo Jaiyeoba.

Charlotte has been one of the fastest-growing cities in the country in recent years. This growth has established Charlotte as a vibrant and desirable city. However, this rapid development has also contributed to and highlighted, many challenges that have faced our community for decades. The Charlotte Future 2040 comprehensive plan outlines how we address these challenges and guide our growth and development over the next 20 years. This plan is a living document that provides a policy framework that will guide our city’s decision-making and investment in both the near- and long-term. The community-driven planning process has been guided by a focus on equitable growth and Charlotte's residents coming together to prioritize what is most important to us (housing, jobs, environment, livability, etc. The plan seeks to address the inequities of the past and unite the city around a shared set of goals for our future.

Originally published by Richard Florida for Bloomberg CityLab on May 14, 2021.

Just last spring, a chorus of pundits loudly proclaimed a sweeping urban exodus and the impending death of cities. Now, just slightly more than a year later, our cities are springing back to life. Sidewalks are starting to bustle; restaurants, which have spilled onto the streets, are teeming with patrons; museums and galleries are reopening; and fans are heading back to baseball parks, basketball arenas and even outdoor concert venues.

But one area of urban life where the pandemic is poised to leave a far bigger mark is on the places where we do business. The ongoing shift to remote work challenges the historic role of the Central Business Districts — neighborhoods like New York’s Midtown and Wall Street, Chicago’s Loop, or San Francisco’s Financial District — as the dominant centers for urban work. 

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Originally published in the Spring 2021 Issue by Jennifer LeFurgy, Ph.D. for Development Magazine.

Large revenue shortfalls will accelerate technological advances, conversions and design innovations. 

Quarantines and business shutdowns fueled by the COVID-19 pandemic have led to a dramatic decrease in parking demand. Subsequently, many sectors of the economy that depend on parking revenue are facing budget shortfalls this year.

Spothero.com reported in 2020 that the parking industry saw parking volumes in many areas fall by up to 97%, resulting in job losses and furloughs for 50% of the industry’s workforce. Commuter lots had a 50% to 70% reduction in use, while visitor lots saw up to a 95% drop from the same time the previous year, according to a survey by Smarking, a parking software company. 

Municipalities are scrambling to recover not only lost parking income but also a dramatic reduction in revenue from fees and fines. A 2019 CarRentals.com survey of parking data for 16 major U.S. cities found that they collected a total of $1.4 billion in annual parking ticket revenue. In 2019, Chicago issued 2.06 million parking tickets. Through June 30 of 2020, the city gave out less than 500,000. New York City projected that it would lose $600 million in parking revenues in 2020.

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DL Lunch & Learn with David Furman
June 3 | 12:00pm ET

Next week, join the conversation with Charlotte native and distinguished architect, David Furman, as he talks about how he got started in the industry and what opportunities, successes, and challenges have shaped his 40+ year career.

Take advantage of this opportunity to meet and learn from a leader in the Charlotte community!

This is a free event, available only for NAIOP Charlotte Developing Leaders. Prior registration is required. Zoom information will be sent on June 2.

Speaker

David Furman is a Charlotte native, architect, and developer, who has specialized in creating the urban experience through unique residential and mixed-use developments over a 40-year career. His Centro CityWorks, company has designed and/or developed over 40 projects in downtown Charlotte and SouthEnd, including Charlotte’s first downtown high-rise condo, Courtside, as well as the 28 story TradeMark building where he lives and works. He is currently on the board of Charlotte Center City Partners as well as an active participant in many initiatives to advance Charlotte’s urban presence as a premier place to live, work, and play. 

The recommended draft of the Charlotte Future 2040 Comprehensive Plan is now available online at cltfuture2040.com. The City of Charlotte is hosting a virtual Planning Community Conversation about the recommended draft on Thursday, May 27, from 5:30-6:30 p.m.

Anyone interested in participating must complete the community conversation sign-up form to speak during the meeting and submit questions or comments through the WebEx virtual meeting platform. The meeting will also be live on the City of Charlotte’s YouTube and Facebook pages, and staff will take questions submitted through the video comments.

The City will be hosting a press conference at 3:30 today to discuss the new draft.

Our analysis will be released in the coming days, once we have had adequate time to review the changes.

Read the New Draft Here

Originally published on May 7, 2021, for the Building  Design and Construction Network.

Construction employment was unchanged from March to April as nonresidential contractors and home builders alike struggled to obtain materials and find enough workers, according to an analysis by the Associated General Contractors of America of government data released today. Association officials said the industry’s recovery was being hampered by problems getting stable prices and reliable deliveries of key materials, while the pandemic and federal policies were making it harder for firms to find workers to hire.

“Contractors are experiencing unprecedented intensity and range of cost increases, supply-chain disruptions, and worker shortages that have kept firms from increasing their workforces,” said Ken Simonson, the association’s chief economist. “These challenges will make it difficult for contractors to rebound as the pandemic appears to wane.”

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On May 6, 2021, Marcus Jones, Charlotte City Manager, released a memo providing an update on the 2040 Comprehensive Plan.  Included is a link to the 650+ comments from the community and the next steps.  The timeline continues to move toward a release of the second draft of the plan on May 19 with a potential vote by the City Council on June 21.  To access more information:

• City Manager Memo - https://naiopc.memberclicks.net/assets/Manager%27s%20Memo%20-%20Comp%202040%20Plan.pdf
• City of Charlotte Comprehensive Plan Site - https://cltfuture2040.com/
• REBIC information on the 2040 Plan - https://www.rebic.com/2040-plan
• Public Comments – https://www.cltfuture2040plan.com/
• GetItRightCLT Campaign - https://getitrightclt.com/