Industrial Vacancy Approaches Historic Low

U.S. industrial markets absorbed 57.8 million square feet of space in the first quarter of 2016, up 9.3 percent from the first quarter of 2015, according to Cushman & Wakefield’s “MarketBeat: U.S. Industrial Snapshot Q1 2016.” This marks 24 consecutive quarters of positive net occupancy gains for the sector, making the current expansion the longest and strongest on record.

While the U.S. industrial market shed over 182 million square feet of space during the economic downturn, it has absorbed more than 990 million square feet during the current recovery. Furthermore, the ongoing industrial expansion has been more broad-based than previous expansions, with widespread occupancy gains continuing to be recorded across the country; 22 markets reported over 1 million square feet of positive net absorption during the quarter.

The report cites an improved outlook for U.S. manufacturing and increases in e-commerce as major drivers of industrial net absorption. It also notes the uptick in speculative industrial construction: spec projects under construction in the first quarter totaled 109.9 million square feet, 62.5 percent of the total 175.8 million square feet under construction.

“Expect 2016 to be another year where net absorption passes the 200 msf mark,” the report concludes. “Leasing demand will balance new deliveries and hold national vacancy steady. Rent growth is expected to drive value in 2016. Gains will continue to permeate all product types but will be most pronounced for product located in supply constrained infill locations.”

From April 26, 2016 NAIOP Source – Click here to view article.

Managing Package Deliveries

Tech fixes will help overwrought property managers today, but what will happen as online sales grow even more?

THE “LAST MILE” of the distribution chain can be challenging (see “An Efficient ‘Last Mile,’“), but it may be nothing compared to moving a package those last few feet — from carrier to consumer — as online sales surge.

Package delivery already is a problem at many apartment complexes and some office buildings. According to a 2014 National Multifamily Housing Council (NMHC) and Kingsley Associates package delivery survey, at 77 percent of apartment buildings surveyed, package carriers will first try to deliver a parcel directly to the resident’s door, rather than going straight to the management office. Rick Haughey, NMHC vice president for industry technology initiatives, said that number drops to just 20 percent in high-rises (buildings of nine stories or more). If the resident isn’t home, package carriers will take a parcel to the management office 70 percent of the time, which leads to a huge volume of packages for the manager to handle. That same survey also revealed that the average apartment complex receives as many as 100 packages a week, with the volume doubling around the holidays.

“According to a 2015 Wall Street Journal article, Camden Property Trust estimated that handling a single package results in 10 minutes of lost productivity,” notes Kobi Bensimon, vice president of RealPage Inc., a Carrollton, Texas, firm that sells package locker systems as well as property management software and other IT services. “Multiply that by the 1 million packages Camden handled in 2014, and you begin to see just how big an issue package management is, especially as online shopping continues to grow — 2015 saw a 25 percent growth in package shipments over 2014.”

This is a year-round problem, not just a holiday season issue, according to Lisa M. Newton, vice president, multifamily operations, for Hines in Houston. She says that the problem used to be the risk associated with accepting a package, but today it is about volume and how that volume affects a management team’s time and space constraints. Newer developments are able to plan for packages, she adds, while older communities may have limited options to expand.

Here are some solutions that the industry is using.

Don’t Take Packages

The simplest solution is to not accept packages for residents if they are not at home or in the office. Last year, Camden Property Trust stopped accepting deliveries for residents at all of its 169 U.S. apartment properties.

Transwestern has a similar policy at Emerald Plaza, a 30-story mixed-use building in San Diego. “Our formal policy is that we do not accept packages. But we want to help our tenants, so we have made arrangements with UPS, Fedex and Norco Delivery Services to have boxes on site for package pickup and delivery,” says Mark D’Ambrosi, general manager, management services, for Emerald Plaza’s offices. “In addition, there are three postal box-type stores within three blocks of our building — a UPS, a Go Postal and a Postal Annex store. We have encouraged our tenants who receive after-hours packages to make arrangements with one of these stores. The stores accept packages on a 24-hour basis.”

Emerald Plaza also has an on-site mail room, which is operated by the U.S. Postal Service. Tenants receive mailboxes at no additional cost. According to Transwestern, if a package is too large for a tenant’s mailbox, USPS places the package in an oversized (18 by 18 by 24-inch) mailbox, and a key for that mailbox is placed in the tenant’s assigned mailbox. If the package is too large for the oversized box, the postal carrier attempts to deliver it to the tenant’s office suite. If nobody is there to accept the delivery, a delivery tag is left in the tenant’s mailbox.

From April 26, 2016 NAIOP Source – Click here to read the full article.

Women in CRE: Dismantling the Glass Ceiling

The 2015 Benchmark Study Report: Women in Commercial Real Estate, by Commercial Real Estate Women (CREW) Network, found that women working in commercial real estate are more likely to be satisfied in their careers than ever. However, there remains room for progress, with disparities in compensation and the numbers of women in C-suite positions relative to men.

From April 26, 2016 NAIOP Source – Click here to view article.

How Mexico City’s Public Space Authority Is Improving Urban Livability

Mexico City’s Public Space Authority (known by its Spanish acronym, AEP) was set up in 2009 with a mandate to improve the quality of urban life and reduce social inequality through the use of public space. According to Citiscope, its interventions range from introducing small pocket parks to larger parks and streets projects that stretch for several blocks. Unlike traditional parks and recreation departments, it is not responsible for the maintenance of its spaces, which allows for more creative thinking but also raises questions about the long-term viability of those spaces. It also has an easier time putting the needs of people ahead of those of cars than traditional transportation departments.

So what does the AEP actually do? Once a week, it closes a major downtown thoroughfare to traffic to allow for Sunday strolls. “Bright green umbrellas and live music transform the street into a lively hangout. In a handful of residential neighborhoods, streets that meet at funny angles leave vestigial asphalt, which the AEP has turned into extensions of the sidewalk with planters and signage. In an innovative financing scheme, 30 percent of the revenues from a new parking meter system are funneled into the AEP’s coffers, reflecting the belief that streets are public spaces.” It is also building a large-scale linear park in a disadvantaged area and installing outdoor Wi-Fi zones.

“What we’re basically trying to do is guide the development of the city through our interventions. So on one hand, we give new value to neglected, rundown central areas of architectural heritage. We make interventions in the historical center, for example. But on the other hand, we also try to bring projects for public spaces to marginal neighborhoods, where social segregation is strong,” says Ana Isabel Ruiz Remolina, AEP’s executive director of projects. The AEP’s experiences offer plenty of lessons for other cities as well as private commercial real estate developers and property owners.

From April 19, 2016 NAIOP Source – Click here to view article.

Congratulations to Our 2016 Clay Shooting Tournament Winners

Thank you to everyone who came out on Thursday, April 21, for the NAIOP Charlotte and CRCBR Annual Clay Shooting Tournament at Rocky Creek Sporting Clays.DSC_4055

Click here to view photos from the event.

Top Overall Team
Bo South
Marchs Raburn
Houston Roberts

Top Overall Male Shooter
Brian Gibson

Top Overall Female Shooter
Amy Sullivan

Team Flurry Contest Winners (Sponsored by InterCon)
Barry Misiak
Bret Estridge
Nick Puckett
Knox Tate

Congratulations to our White Rabbit Contest Winners, sponsored by American Asset Corporation.

Top 500 Internet Retailers Continue to Grow, but Less Rapidly

The recently released “Internet Retailer Top 500 Guide” reveals that online sales continue to grow, but the largest retailers are growing at a slower pace than the industry as a whole for the first time since 2009. The 500 largest online retailers collectively grew their web sales 13.5 percent to $331.5 billion in 2015, the slowest growth rate since the Great Recession.

Overall, U.S. shoppers spent $341.7 billion on Internet retail sales in 2015 according to the U.S. Commerce Department. Online sales grew almost five times as fast as in-store sales (14.6 to 3.1 percent, respectively). E-commerce’s share of total retail sales have grown more than 4 percentage points in five years, from 6.3 percent in 2011 to 10.6 percent in 2015. The largest online retailers in North America are a major force behind these trends: the top 500 merchants’ U.S. online sales of $286.2 billion made up nearly 84 percent of total e-commerce sales in 2015.

But the biggest online retailers, their technology partners and other industry observers say it’s becoming tougher than ever to grow online, as Amazon.com Inc. (No. 1) continues to grow its market share and pressure other merchants on price, delivery times and more.

From April 19, 2016 NAIOP Source – Click here to view article.

E-commerce Trends are Broadening in Unexpected Ways

When was the last time you walked into a store and bought something without having researched it beforehand? Traditional brick-and-mortar stores continue to host scores of customers walking in their doors and out with purchases, but e-commerce plays an increasingly important role in the retail industry – and by extension, to industrial real estate. (Excerpt from E-commerce Trends are Broadening in Unexpected Ways, Erika Morphy for Globest.com.)

Granted, online commerce still takes a minuscule percentage of total US sales, but the overwhelming majority of consumers research those sales online, said James A. Tompkins, Ph.D., chairman and CEO of Tompkins International, during a keynote address at I.CON ’16: Impact Projects,

A few of Tompkins’ key points cited in the article:

  • Consumers Demand Immediate Delivery. As recently as 2013, delivery of an item purchased online within 4 days was considered exceptionally fast. Customer expectations have steadily increased to next-day delivery being expected in 2016, and same-day predicted as the new normal for 2017.
  • The Arrival of Cross-border Commerce. According to Tompkins’ figures, some 48 percent of online cross-border commerce purchases, or $245 billion, will originate in the Asia-Pacific region, driven by China’s consumers by 2020. Europe will be second in global online cross-border commerce, with $180 billion in purchases by 2020, and North America will be third at $140 billion, according to Tompkins.
  • More E-Commerce Fulfillment Centers Around Airports. Because most cross-border commerce export and import orders travel by air, this growth will require a substantial increase in e-commerce fulfillment centers (FCs) around major international airports, Tompkins said. Right now, the industry has just scratched the surface in terms of product developed for this particular use.

Read the full article on GlobeSt.com (login may be required) and see complete resources, recordings, presentation and coverage from I.CON ’16: Impact Projects.

From April 19, 2016 NAIOP Source – Click here to view article.