TOP FIVE US METROS FOR LIFE SCIENCES IN 2022

By Ioana Ginsac

Growth in the life sciences sector has driven demand in recent years for both commercial real estate space and labor to accommodate this specialized sector. A new study by commercial real estate platform CommercialCafe set out to identify the best metros for life science companies in 2022 and assessed more than 40 metropolitan statistical areas (MSAs) in terms of regional talent pool and workforce; accessibility of local office markets; the degree of availability of existing dedicated property; as well as the state of the local pipeline aiming to expand local life sciences capacity.

Boston took the number one spot on the list, with San Francisco in second place, then San Diego third, New York fourth, and Washington, D.C., rounding out the top five.

A longtime “flagship market” for life sciences, the Boston metropolitan area remains a leader in the sector. The MSA stood out for several key indices scored in the ranking: Boston boasts the largest labor pool among the metros analyzed, as well as the largest life sciences real estate market — nearly 25 million square feet of existing dedicated property, of which just under 14 million square feet was LEED-certified space. What’s more, with an additional 23.8 million square feet of new life sciences developments in the pipeline — under construction, as well as in the planned and prospective stages — Boston seems firmly placed at number one for the foreseeable future.

Last week, the U.S. Senate passed the Inflation Reduction Act of 2022, a $740 billion budget reconciliation measure with provisions to address climate change and energy security, extend federal healthcare subsidies, and allow Medicare to negotiate prescription drug prices. As we informed you last week, the bill, which had been negotiated by Senate Majority Leader Charles Schumer (D-NY) and Senator Joe Manchin (D-WV), contained a proposal changing the taxation of carried interests that would have harmed the commercial real estate industry and real estate entrepreneurs.

When the Schumer-Manchin agreement was announced, NAIOP and NAIOP Arizona, along with our national real estate allies, mobilized to support Senator Kyrsten Sinema (D-AZ) in her efforts to oppose the proposed changes to carried interest. In order to ensure her vote, the proposal was dropped from the bill before the legislation was brought up for floor debate.

We are gratified that the concerns of NAIOP and the real estate industry were considered on this very important issue. For more than a decade, NAIOP has successfully opposed various proposals to alter the tax treatment of carried interests, or “promotes” as they are known in real estate. While characterized in the media as affecting Wall Street hedge fund managers, these tax increases would have had a much broader economic impact, impacting real estate partnerships, the venture capital industry and others. We have been engaged with policymakers long before this latest proposal was introduced, and our members’ support has been extremely helpful.

Senator Sinema promised to continue working with Senator Mark Warner (D-VA) to develop legislation reforming carried interest taxation. I want to assure every NAIOP member that, on this and the other important issues affecting commercial real estate, we and our NAIOP chapters will continue our strong advocacy on behalf of you and our industry.

Compiled from REBIC, staff reports

REBIC’s Rob Nanfelt reported Tuesday that the City’s Planning Committee is taking up the matter of the proposed Unified Development Ordinance. Next month, committee members will take any additional recommendations before the third/final draft.

Last week, the Charlotte City Council received comments from the community during a public hearing on the proposed UDO. Click here to view the resolution. The entire hearing is available to view here – beginning approximately at the 2:51:30 mark.   

Next is a review and recommendation from the City’s Planning Committee scheduled to begin Tuesday, July 19, at 5 p.m. Those interested can view it on the City’s Planning Department YouTube Channel. The complete agenda and meeting packet is available here.

REBIC's Rob Nenfelt and his team put together this week's Two For Tuesday and UDO takes center stage early next week.

UDO - Public Hearing Scheduled for Monday

The Charlotte City Council has scheduled a public hearing on the proposed Unified Development Ordinance (UDO) for Monday, July 11. The Council Action Review begins at 5:00 pm followed by the Public Forum/Business meeting at 6:30 pm. An agenda should be available here by Friday afternoon. Click here to sign up to speak. 

Also, Planning Staff has just released responses to public comments submitted prior to last Thursday's deadline. Additional changes will be reflected in the next and likely final draft when it is released which will occur prior to the expected vote on adoption in late August. Here's a link to the page containing the Second Draft Public Comments - With Staff Responses.

For additional UDO resources, please visit Charlotte's Unified Development Ordinance (UDO) - (charlotteudo.org).

Vacant Storefronts Can be Repurposed into Retail Incubators

They can provide an immediate boost in shopping districts and grow future businesses into long-term tenants.

• Written by Ilana Preuss, Development Magazine

The COVID-19 pandemic has left America’s retail districts pockmarked with empty storefronts, but there is a creative solution. These vacant spaces, which often can be purchased or rented at reduced prices, are prime targets for conversion into retail incubators.

Retail incubators, like business incubators, nurture new or small-scale entrepreneurs during the startup phase. They mitigate some of the challenges of opening a business by providing financial and technical assistance, such as the basics of marketing and business plans. Tenants typically share space, ideas and operating expenses in locations that they could not otherwise afford. Many spaces have flexible or temporary lease terms. Some allow for small-scale manufacturing and hold community events, such as product demonstrations, fashion shows and art openings.

According to the U.S. Chamber of Commerce, new business applications in the United States set an all-time record of 5.1 million in 2021. At the same time, the pandemic has led to consolidation of space and locations by major retail brands, which reduced the prospect of attracting businesses. The challenge for small businesses is they can’t immediately fill the footprints of major store closings. However, they can make temporary use of retail space to establish their businesses, and occupying formerly abandoned stores can help energize struggling downtowns.

Thursday will mark the release of the Strategic Mobility Plan (SMP) draft. The public can access the May 19 meeting at this link.

The SMP’s goal is to shape the mobility future for the City of Charlotte and expand on the “Safe and Equitable Mobility” goal of the Charlotte Future 2040 Comprehensive Plan (2040 Plan). The SMP dives deeper into the mobility policies of 2040 Plan to achieve a safe, connected, equitable, sustainable, prosperous, and innovative mobility vision for Charlotte. To learn more, follow this link to the Strategic Mobility Plan homepage.

SMP Virtual Engagement Sessions will be live on Thursday, May 26 (6 p.m.) and Tuesday, May 31 (noon). Meeting links will be available by visiting charlottenc.gov/smp.

Additionally, you can sign up to share input during the public comment portion of the City Council Business Meeting on Monday, June 13, at 6 p.m.

UDO – Updates

On Wednesday, there will be a presentation on the findings related to the Economic Analysis of the draft UDO.

originally published by MARIE RUFF  for NAIOP National

Industrial real estate contributes valuable jobs and services to the economy but is not always well understood by the local community. Concerns about traffic and adjacent land uses may also exist. In a session at NAIOP’s I.CON East in Jersey City, New Jersey, this week, a panel of experts discussed effective practices for engaging with local officials, decision-makers, and community members about the role of industrial facilities as a “good neighbor.”

Read the Full Article Here!

A special thanks to Elizabeth McMillan at Crescent Communities for sharing this information below.  Please pass along to your colleagues.

As a follow-up to the Charlotte Future 2040 Comprehensive Plan, the Charlotte Planning Department has moved into Part 2 of the implementation phase, the Charlotte Future 2040 Policy Map. This part of the process will translate the plan’s place-based policies to specific locations throughout the community.  The Planning Department has put out a survey to collect data and input from residents and professionals to help influence the Policy Map, which will help guide the UDO.

Please feel free to share this email with others in hopes that more of our voices can be heard.

Complete Survey

• Click “Get Started” on left
• Click “Live Work Play Survey” at the top banner, left side
• Click the link at the bottom that says “Click here to take the Live, Work, Play Survey” or go here: https://survey123.arcgis.com/share/95573d500fe944269a9f8c6b7f7a4e58

** The first page sets the stage for the previous work and gives an overview of the process, so may be helpful if you need a refresher.

Top 3 Items to Note:

1. We are making significant progress on our efforts to identify and bring aboard a seasoned individual to provide additional eyes and ears on the ground in Iredell County and Cabarrus County.  More on that to come later this week.

2. The City of Charlotte is seeking development/real estate representatives to serve on two advisory boards created by the passage of the policy section of the 2040 Comprehensive Plan.  It is essential we engage qualified and knowledgeable individuals to fill these positions.  We have an incredible opportunity here and I could use your help.  (Deadline is Friday, August 27^th, details follow)

For more information on the new advisory boards, please visit: https://charlottenc.gov/CityClerk/Pages/BoardsandCommissions.aspx

3. The next phases of CLT Future 2040 (mapping and UDO) are underway –

• Alan and I had our second monthly meeting with Taiwo and Alyson last Thursday.  As a result of that meeting, REBIC will be putting together a small group of design professionals that will meet with planning staff every two weeks (for as long as necessary) beginning a few days prior to the public release of the UDO on October 4^th.  These meetings will allow REBIC representatives to provide feedback and to receive an immediate response, much earlier in the process, on elements of the proposed ordinance that could be problematic if implemented  It also allows us to be a cheerleader for those things in the UDO that help streamline the process and reduce development time frames.

• Brenda Hayden will be joining Alan and me for the monthly meetings beginning in September.

• A brief presentation containing the projected schedule for mapping/UDO is here.

• The planning staff is providing a presentation to the Transportation, Planning, and Environment Committee this morning at 10:30 am.  Here’s a link to the agenda (viewing information is contained therein):  https://charlottenc.gov/CityCouncil/Committees/Transportation%20and%20Planning%20Doc/TAPE_Committee_Meeting_Agenda_August_23_2021.pdf

• There will also be a presentation to the full Charlotte City Council this evening.  The meeting begins at 5:00 pm and the agenda is located here: file:///C:/Users/rnanfelt/AppData/Local/Packages/Microsoft.MicrosoftEdge_8wekyb3d8bbwe/TempState/Downloads/Agenda%20(1).pdf

• To view the meeting, click on this link and go to the appropriate viewing box:  https://www.youtube.com/results?search_query=city+of+charlotte

• Due to recent and higher than anticipated COVID infection rates, the Government Center has been closed to the public for the time being.

originally published by REBIC with permission to repost through NAIOP Charlotte

The North Carolina General Assembly released their long-awaited conference budget report on Monday. The budget, once approved by both chambers, will then be sent to the Governor. Today, Governor Cooper indicated he would sign the budget proposal.

The budget includes massive infrastructure investments. 

NAIOP, the Commercial Real Estate Development Association, commends congressional lawmakers on the passage of the $1.2 trillion infrastructure package, which now moves to President Joe Biden for signature into law. 
 

A longtime priority issue for NAIOP members – the nation’s foremost owners, developers, and investors of office, industrial, retail, and other commercial real estate – the bills $550 billion in new federal investments in U.S. infrastructure will provide critical financial support for roads, bridges, rail and mass transit systems, as well as underlying water, energy, power, and broadband systems, among others. 
 

Investment in these transportation and infrastructure networks is essential to repairing and strengthening the supply chain. Included in the bill are $17 billion for port infrastructure and $25 billion for airports – critical funds that will help address facility deterioration, lower emissions through electrification and other low-carbon technologies, and reduce congestion near these heavily-trafficked areas.  
 

Dear NAIOP Chapter Executives:

The NAIOP Research Foundation is currently conducting a brief survey of U.S. members on development costs for office, warehouse/distribution, manufacturing and retail projects. This updated information is needed to complete the 2022 U.S. edition of the Economic Impacts of Commercial Real Estate, and we would appreciate your help promoting the survey to members who are likely to know about development costs for manufacturing and retail properties, as only a few respondents have provided information for these property types.

The survey takes about 2-3 minutes to complete, and we are now offering anyone who provides information on development costs (including those who have already completed the survey) with a $10 Amazon gift card. Please encourage members to complete the survey, either using the personalized link they received on Monday, September 20, or using this open link: https://research.zarca.com/r/hh79EQ If someone else at their firm would be better able to complete the survey or is more familiar with manufacturing or retail projects, members can send them the open link. The survey will now close on October 6.

Originally published on August 3, 2021, for NAIOP E-Newsletter.

The bipartisan group of senators negotiating infrastructure legislation finalized legislative text over the weekend and officially introduced the measure Sunday night. Senate Majority Leader Chuck Schumer (D-NY) has stated he plans to hold a vote on the bill later this week.

Senators Rob Portman (R-OH) and Kyrsten Sinema (D-AZ) officially introduced the 2,702-page Infrastructure Investment and Jobs Act, emphasizing the bipartisan nature of both the process and the legislation. The bill includes $550 billion in new spending and provides more than $1 trillion in total spending on roads, bridges, ports, and broadband. The package also includes spending on Biden administration priorities, including electric vehicle charging stations, climate resilience, and water infrastructure.

Read More

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.

Read More

Originally published on June 8, 2021, by the NAIOP Source E-NEwsletter

Discussions over a bipartisan infrastructure deal have entered a critical stage as the Biden administration negotiates with Senate Republicans, with progressive Democrats increasing pressure on the White House to pass legislation with only Democratic votes. The White House and Senate Republicans remain at odds on major issues but have continued to seek an agreement. Republicans oppose the inclusion of what they consider non-infrastructure spending, such as long-term care for seniors and people with disabilities, in an infrastructure deal. The White House and Democrats have used the term “human infrastructure” to refer to these initiatives. Both sides also continue to argue over the funding mechanism, with President Joe Biden originally proposing an increase in the corporate tax rate from 21% to 28%, but recently dropping that in favor of a 15% global minimum corporate tax as a means of paying for the infrastructure plan.

Full Story

Originally published on June 2, 2021, by Sasha Jones for Bloomberg News.

The future of the office sector remains largely uncertain at this point post-pandemic, but there’s one segment that continues to see huge gains.

Investors have spent more than $10 billion on buying life sciences buildings this year, Bloomberg News reported, citing data from Real Capital Analytics. That’s about 4 percent of all global commercial real estate transactions through May, twice what was recorded at the same time last year.

And those numbers don’t even include new life-science developments, such as Boston’s massive Fenway Center, which broke ground in 2017.

Read More

Originally published on May 25, 2021 for NAIOP E-Newsletter.

President Joe Biden set Memorial Day as his deadline for reaching an agreement with Senate Republicans on a bipartisan infrastructure initiative, but despite several meetings and counterproposals, the two sides appear to remain far apart on a deal. With Democrats controlling the Senate, Biden had said he would resort to budget reconciliation, a procedural measure that would enable the White House to avoid a filibuster and pass legislation with only Democratic votes in the Senate, to get most of his proposed $2.25 trillion American Jobs Plan infrastructure initiative enacted into law.

Read More