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When and Why to Consider Underground Detention

Originally published on February 8, 2023, by Chris Strawn and Tom Jansen for NAIOP E-Newsletter.

Stormwater management considerations are a vital part of the site selection and development process – and can impact the long-term value of a property. In fact, the majority of land development projects over one acre require a stormwater management system so it’s important to understand the available options as well as their pros and cons.

Stormwater management is traditionally executed on the surface with a pond that controls how much water can be released typically at or below historic flow rates. One alternative is to create an underground detention system. It is most often used in developments where land availability, parcel limitations and land costs do not allow the development of surface stormwater Best Management Practices (BMPs).

It’s important to consider when and why it is appropriate to implement underground vs. above-ground solutions to maximize the long-term real estate value of properties.

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[Watch] How CRE Benefits the U.S. Economy

Originally published on February 6, 2023, by NAIOP.

The four phases of commercial real estate development yield significant contributions to the U.S. economy, creating jobs and building the places we work, shop, live and play. In 2022, combined economic contributions of new commercial building development and the operations of existing commercial buildings:

  • Contributed $2.3 trillion to U.S. GDP
  • Generated $831.8 billion in personal earnings
  • Supported a total of 15.1 million jobs

Each dollar of construction spending generates $2.89 in economic, reflecting the cumulative effects of the initial construction expenditures as they cycle throughout the economy. Construction spending of $1.8 trillion yields $5.2 trillion to U.S. GDP.

State economies benefit from a healthy commercial real estate industry, which yields state revenue and adds inventory to attract new businesses and jobs.

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Global Economic Implications for the China Slowdown

Originally published on February 3, 2023, by Brielle Scott for NAIOP E-Newsletter.

Painting a picture of the current global economic climate is a complex venture, but Reva Goujon, director at Rhodium Group, leveraged her vast geopolitical expertise to do so at NAIOP’s Chapter Leadership and Legislative Retreat this week in Washington, D.C.

“First – catch your breath!” Goujon said at the start of her remarks, pointing out that 2022 created a cocktail of inflationary drivers, including:

  • The land war in Europe, which caused a surge in food and energy prices.
  • Tightening monetary policy (“How is the Fed going to land this plane?” she asked).
  • A still-tight labor market (“There are nearly twice as many job openings as eligible workers,” Goujon noted).
  • The U.S.’s “next-level” financial sanctions against Russia and tech controls against China.
  • China ending its “zero-COVID” policy with a bang, among other factors.
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A Groundbreaking Tool for Advancing and Measuring CRE Supplier Diversity

Originally published on February 2, 2023, by Brielle Scott for NAIOP E-Newsletter.

NAIOP, in conjunction with the Commercial Real Estate Diverse Supplier (CREDS) Consortium, has debuted the commercial real estate industry’s first collaborative supplier diversity initiative, helping to advance member companies’ environmental, social and governance (ESG) objectives. NAIOP chapter leaders from across North America had the opportunity to learn more about the program this week at the Chapter Leadership and Legislative Retreat in Washington, D.C.

“We talk a lot about ESG as an element that guides corporate policies and investing strategies,” said Duane J. Desiderio, senior vice president and counsel for The Real Estate Roundtable, who spoke at the session. He said most companies are familiar with the ”e” in ESG – company policies related to environmental regulations, energy usage, pollution, greenhouse gas emissions, etc.

But when it comes to the “s” or social aspect of ESG, “That’s where we heard from our members we needed to get involved,” Desiderio said. “What are the metrics for social impact in a company?”

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Vision 2023: Annual Report

Originally published on January 31, 2023, by NAIOP E-Newsletter.

NAIOP is your forward-thinking partner committed to working alongside our members to build your knowledge, advance your career and protect your business.

Watch our 2022 accomplishments and preview what's ahead for the association throughout this year, including the release of new programs, opportunities to connect across the chapter network, and resources that will move our members' businesses forward.

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The Case for Implementing DEI in Commercial Real Estate

Originally published on January 31, 2023, by Trey Barrineau for NAIOP E-Newsletter.

Like many industries, commercial real estate has often struggled to make progress on diversity, equity and inclusion (DEI). An interactive session during NAIOP’s Chapter Leadership and Legislative Retreat (CL&LR) in Washington, D.C., in late January explored the “what, why and how” of DEI and how firms in the industry can better implement it.

Rhonda Payne, CAE, the founder and CEO of Flock Theory, opened by discussing personal identity, which Psychology Today defines as “the memories, experiences, relationships and values that create one’s sense of self.” According to Payne, some aspects of each person’s identity are fixed. These include things you were born into, as well as the era in which you exist. Furthermore, there are the choices we make (such as which college to attend or what career to focus on) and the opportunities that are presented to us.

“All these things make up an individual’s identity,” Payne said. “All these contribute to the diversity within a space or team.”

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NAIOP: Commercial Real Estate Vital to the Overall Economy; Industrial Sector Leads, and Retail Stages a Comeback

Originally published on January 26, 2023 by Kathryn Hamilton for NAIOP E-Newsletter. 

The impact of new commercial real estate development in the U.S. continues to grow, according to the annual Economic Impacts of Commercial Real Estate research study conducted by the NAIOP Research Foundation.

The combined economic contributions of new commercial building development and the operations of existing commercial buildings in 2022 resulted in direct expenditures of $826.9 billion and the following impacts on the U.S. economy: 

  • Contributed $2.3 trillion to U.S. gross domestic product (GDP).
  • Generated $831.8 billion in personal earnings.
  • Supported 15.1 million jobs.

Among other highlights:

  • Significant (143.4%) increase in non-warehouse (manufacturing) industrial building construction in 2022, making it the largest segment of new CRE construction in 2022.
  • The four property types covered in the report saw increased construction spending (hard costs) last year (see table).
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Bringing Wellness to the Industrial Workplace

Originally published on January 20, 2023 by Brielle Scott for E-Newsletter.

Wellness in the workplace – it’s a buzzy phrase we hear often in reference to office buildings, but when it comes to the industrial and manufacturing facilities that are ubiquitous to us, what kind of wellness features would we find inside?

Long days, physical labor and often isolated locations can take its toll on the workers at these locations. According to the U.S. Bureau of Labor Statistics, there was a 60% turnover rate in the industrial sector in 2020, and it stands to reason that the additional burdens placed on these essential workers (not to mention the staggering increase in e-commerce demand) during the COVID-19 pandemic may have exacerbated the issue.

As any corporate accountant can tell you, employee turnover can have a major impact on a company’s bottom line. And large-scale owners of industrial assets are under the same market pressures as office, multifamily or hotel owners when it comes to ESG reporting and performance.

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NAIOP Insights: ESG Essentials for Commercial Real Estate

Originally published on January 19, 2023 for NAIOP E-Newsletter.

ESG is emerging as a hot topic for businesses and commercial real estate development in particular. To stay ahead, developers can embrace standards to set their projects up for success. Learn how smart building technologies, tax and state incentive programs, and setting measurable goals as companies establish their ESG practices can support this evolving initiative.

NAIOP Insight by: Rielle Green, LEED AP O+M, WELL AP, Fitwel Ambassador Director of ESG, Acadia Realty Trust.

This NAIOP Insight was filmed at CRE.Converge 2022.

Watch NAIOP Insights Video Series

Return to the Hill: CL&LR 2023

Originally published on January 18, 2023 by Aquiles Suarez for NAIOP E-Newsletter.

In less than two weeks – and for the first time since February 2020 and the start of the COVID-19 pandemic – NAIOP members and chapter local executives will be headed to Capitol Hill to meet with their elected representatives, senators and congressional staff. In so doing, they will be taking the opportunity to establish relationships with newly elected members of Congress, renew and deepen existing ties with incumbents, and talk to their elected officials about issues important to the commercial real estate industry.

All of this occurs as part of NAIOP’s Chapter Leadership and Legislative Retreat (CL&LR), a three-day conference where local NAIOP chapter executives and their leadership come together in our nation’s capital to talk about their chapters, share best practices, and spend a day meeting with their elected federal representatives on Wednesday, Feb. 1, Capitol Hill Day. For much of the next two weeks, NAIOP members coming to Washington, D.C. will be scheduling meetings with their senators and representatives to discuss NAIOP’s 2023 Federal Priorities with them.

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Meet Kim Snyder, 2023 NAIOP Chair

Originally published on January 3, 2023 by NAIOP E-Newsletter.

“NAIOP has done a great job of recruiting the best of the best in our business to get involved,” said Snyder in a message to NAIOP members. “It shows a commitment, it shows a dedication to our industry, that you don't see every day. So, I'm super excited about this coming year and working with all the volunteers and helping to guide the outcomes to a positive place.”

Snyder is president, west region, for Prologis, Inc. His career spans more than 30 years in industrial real estate, and he is responsible for all Prologis development, acquisitions and operations in key markets including the Inland Empire, Los Angeles, Seattle and the San Francisco Bay Area.

He has been a NAIOP member since 2004, has contributed as a member of the executive committee, and is a longtime member of NAIOP’s National Forums program. He is a member of the NAIOP Inland Empire and NAIOP SoCal chapters.

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What a Way for Congress to Start the Year

Originally published on January 4, 2023, by Aquiles Suarez for NAIOP E-Newsletter.

A word that has been repeatedly used to describe the workings of Congress is “chaos.” So why should we expect things to change just because it’s a new year? The spectacle put on by the new Republican majority in the House of Representatives trying to choose a speaker this week clearly shows that nothing will be a sure thing in this Congress.

Kevin McCarthy (R-CA), the Republican minority leader in the last Congress who wanted to be speaker in the next, after his party won a slim majority in the 2022 congressional midterm elections, failed to get the needed number of votes on the first round of voting. Then he failed on the second round. Ditto on the third try.  Meanwhile, House Democrats were clearly enjoying the Republican dysfunction, with all of them voting for their leader, Hakeem Jeffries (D-NY), giving him more votes than McCarthy. While Jeffries was not going to get enough votes to become the speaker, it was great optics for House Democrats who were united while Republicans appeared disorganized.

Choosing a speaker is the first order of business for a newly elected Congress. It’s a constitutional requirement, and nothing in the House happens until a speaker is chosen. Members cannot be sworn in, committee assignments cannot be made, and Congress cannot consider legislation. It has been 100 years since a speaker was not chosen by a new Congress on the first ballot.

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What Will 2023 Bring for CRE?

Originally published on December 27, 2022 for NAIOP E-Newsletter by Ed Finkel.

As the calendar turns to 2023, what’s ahead for the commercial real estate field? We talked to several NAIOP Distinguished Fellows and Research Foundation Governors to get their forecasts for the next 12 months.

Investor Interest in Single-family Housing 

Single-family rental housing is top-of-mind for Distinguished Fellow Suzanne Lanyi Charles, who chairs the Paul Rubacha Department of Real Estate at Cornell University. A sector that grew quickly after the 2008 housing crisis, single-family rentals have become a well-established asset class with publicly traded and private companies that have as many as 80,000 units, she notes.

The rapidly rising interest rates of the past year have led smaller investors to pull back, Charles says, but that creates an opportunity for the large to become larger. “I’d expect to see the largest institutional investors, those that have access to cheap capital, to use this period of high-interest rates and declining home values, to grow even larger,” she says.

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State Election Successes for Both Political Parties in 2022

Originally published on December 14, 2022 by Toby Burke for NAIOP E-Newsletter.

While the primary focus of the national media during the 2022 election may have been on a potential “red wave” for control of the U.S. Senate and House of Representatives, there were over 6,200 state legislative races in 46 states according to the National Conference of State Legislatures. The outcomes of these state races significantly impact core policy issues of importance for commercial real estate, such as taxes, regulations and economic development. Generally, political pundits may conclude that the status quo was maintained in this election cycle, with Republicans remaining in political control in a majority of state legislatures and Democrats making modest but significant gains in a few.

Both the Republican Legislative Campaign Committee and the Democratic Legislative Campaign Committee can claim political successes, either maintaining or flipping political majorities in certain state chambers. These include lowering a chamber’s majority by the opposing party gaining seats, or ending veto-proof majorities. 

The post-election analysis by MultiState shows 28 state legislatures under full Republican control, compared to 20 legislatures under full Democratic control. The political parties in the commonwealths of Pennsylvania and Virginia will have divided control between the two chambers heading into the 2023 session. Prior to this year’s election, Republicans controlled 30 state legislatures to 17 by the Democrats with 3 under divided control: Alaska (House bipartisan coalition), Minnesota and Virginia. The election breakdown by Multistate reflects Democrats taking over chamber majorities in the Michigan legislature, the Minnesota Senate, and the Pennsylvania House.

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CommercialEdge: Office Vacancy Rates Rise Nationwide in 2022

Originally published on December 19, 2022 by Eliza Theiss for NAIOP E-Newsletter.

Although many in the industry had assumed that the office market would stabilize in 2022 –  and perhaps even begin to recover pandemic losses – this stabilization did not occur. Rather, wider economic changes; repeated interest rate increases by the Federal Reserve; the further establishment of work-from-home and remote office arrangements; and increasing numbers of office footprint reductions by businesses caused vacancy rates to continue to rise throughout the year. At the same time, rent growth remained patchy.

Listing Rates Show Significant Growth, But Only in Select Markets

Large segments of the office-using sector have adopted remote and hybrid work (at least in part) since the start of the pandemic. Accordingly, the demand for offices has decreased in most markets. In addition, many businesses have also reduced the size of their offices, while others have firm intentions to do the same in the near future. As a result, the national vacancy rate – which reached 16.3% in November – was 150 basis points (bps) higher than it was in October 2021, according to the most recent CommercialEdge report.

In fact, during the last 12 months, vacancy rates increased in 86 of the 120 areas monitored by CommercialEdge, including 22 of the 25 most significant markets. Specifically, the leading U.S. office markets with the largest vacancy rate increases were San Francisco (+390 bps) and Portland, Oregon (+400 bps).

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Chapter Leadership and Legislative Retreat 2023

Chapter Leadership & Legislative Retreat

 

Date: Monday, January 30, 2023 - Wednesday, February 1, 2023

Where: Capital Hilton, Washington, District of Columbia

NAIOP celebrates and empowers those who step up to lead their local chapter. You motivate volunteers, delegate tasks, and manage schedules. You raise awareness, conduct community outreach, and demonstrate the value of membership. You contribute your time, your expertise, and your dollars. NAIOP provides the annual Chapter Leadership & Legislative Retreat for you.

Add to Calendar

NAIOP Expects Growing Weakness in Office Demand

Originally published by Mark Heschmeyer on December 12, 2022, for CoStar News.

Any increase in a key measure of office demand in 2023 isn’t likely to occur, according to the latest projections from the commercial real estate association, NAIOP.

The difference between tenant move-ins and move-outs of leased space could continue to slow into 2024 as net absorption is hampered by economic uncertainty, the trade group said.

The national office market absorbed 6.6 million square feet during the second and third quarters of 2022, but the vacancy rate continued its climb to 17.1%, the highest level since the third quarter of 1993, according to the NAIOP's "Office Space Demand Forecast" for the fourth quarter of 2022 published by the NAIOP Research Foundation.

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What's old is new: Why you should consider adaptive reuse

Originally published on December 9, 2022, by Mike Cavanaugh and Scott Waddell for BDCNetwork.com

While new construction allows for incredible levels of customization, there’s no denying that new buildings can have adverse impacts on the climate, budgets, schedules, and even the cultural and historic fabrics of communities. While any responsible architect will design buildings to minimize these impacts, there is no avoiding them entirely.

One proven strategy to limit these impacts is breathing new life into existing buildings, especially those with long-life durability, aesthetic character, and long-lasting exterior cores of steel and concrete. Known as adaptive reuse, this strategy takes an existing, unused building (think your nearby empty mall, a vacant corporate office, or a long-unused factory) and transforms it into a needed space that will bring value and vibrancy to its community.

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Congress Continues Funding Discussions as Deadline Approaches

Originally published by NAIOP E-Newsletter on December 13, 2022. 

Senate budget negotiators were at an impasse last week with a Dec. 16 deadline looming for passing a spending measure that would keep the government funded. Indications are that bipartisan negotiations will continue, however, after Democrats delayed introducing their own partisan omnibus funding legislation. Senate Appropriations Committee Chairman Patrick Leahy (D-VT), the lead Senate negotiator, stated that he was holding off the introduction of an omnibus appropriations bill because progress in bipartisan talks had been made over the weekend.

Congress is expected to pass a temporary stopgap measure extending the funding deadline for another week, until Dec. 23, to give negotiators more time to finalize a deal. If an agreement is not reached, Democrats have threatened to move a yearlong continuing resolution that would fund the government at current levels, although it is unclear whether they would have the votes to pass the measure.

2023 Board of Directors

Executive Committee 

President
Steve McClure
The Spectrum Companies
President-Elect
Dan Melvin
LandDesign
Secretary
Ken Jonmaire
Trinity Capital Advisors
Treasurer
Bobbi Jo Lazarus
Elliott Davis
Immediate Past President
Welch Liles
Asana Partners
Past President
Pat Pierce
Selwyn Property Group


Directors At-Large 

Director At Large
Todd Summerfield
ProLogis 
Director At Large
Larry Shaheen
McIntosh Law 
Director At Large
Paxton Hollar
SunCap 
Director At Large
Alyson Craig
City of Charlotte 
Director At Large
Sagar Rathie
Crescent Communities 
Director At Large
Mary Katherine Stukes
Moore & Van Allen 
Director At Large
Nick Matus
Bank of America 
Director At Large
Elise Falls
Childress Klein 
Director At Large
Caleb Phillips
Brasfield & Gorrie 
Director At Large
Maggie Houston
Beacon Partners 

 

Ex-Officio

Ex-Officio
Kip Womack
UNC Charlotte
CKP Center for Real Estate 
Ex-Officio
Rob Nanfelt
REBIC 
Ex-Officio
Pat Pierce
Selwyn Property Group
(National Board Liaison) 

 

Committee Chairs

Coming soon!