7 Takeaways: Analysis of Tech Industry’s Impact on North American Office Markets

Job growth in the top 30 tech markets in North America has shifted from a “breakneck” to a “brisk” pace over the past year, according to a CBRE Research report titled “Tech-Thirty 2016,” that measures the tech industries impact on North American office markets.

“Over the past five years,” the report noted, “the software/services industry created 780,000 new jobs at a 7.3% growth rate and accounted for nearly 20% of major leasing activity. In 2016, job creation slowed to a 4% annual growth rate.”

Here are six other takeaways from the report:

  1. San Francisco is the top-ranked tech city in North America and has been for the past five years. The City by the Bay is followed in ranking by Phoenix and Austin.
  2. Thirteen of the 30 tech markets outperformed the U.S. average high-tech job growth rate and increased their growth momentum between 2013 and 2015. The top three cities were Toronto, Charlotte and Dallas/Fort Worth.
  3. Tech submarket rent premiums averaged 14 percent with the top three submarkets being East Cambridge, Massachusetts; Palo Alto; and Santa Monica, California.
  4. Nineteen tech markets posted double-digit rent growth over the past two years, led by Silicon Valley, Raleigh-Durham and Orange County.
  5. Tech markets that have the greatest growth potential and offer the best value for investors include Phoenix, Raleigh-Durham, Dallas/Ft. Worth, Charlotte and Nashville, among others.
  6. Tech markets over the next year should experience steady job growth.

NAIOP Nominations Announced

NAIOP Charlotte members will elect the slate of nominees for the NAIOP Board at the 2016 Annual Meeting on Friday, December 2, 2016.

Below is the Nominating Committee’s recommendation for the 2017 Board of Directors:

President –
Brendan Pierce, The Keith Corporation
President Elect – Cheryl Steele, Horack Tally
Secretary – Sherrie Chaffin, Trinity Capital Partners
Treasurer – Scott Harris, Choate Construction
Immediate Past President – Jim Gamble, Bohler Engineering
Past President – Clifton Coble, Bissell Development

Directors (two year term)
Tracy Dodson, Lincoln Harris
Nate Doolittle, LandDesign
Barry James, Crosland Southeast
Amy Sullivan-Hicks, ECS Carolinas
Dan Warren, Elliott Davis Decosimo

Directors (remaining on the board)
Matt Cochrane, KDC Development
Alice Eckenrode, Bank of America Merrill Lynch
Jenny Fowler, Childress Klein Properties
Jason Moore, Rodgers Builders
Tim Robertson, Beacon Partners

UNCC Liaison –
Alyson Metcalfe, UNC Charlotte | Childress Klein Center for Real Estate
REBIC Liaison – Joe Padilla, REBIC
National Board Member – Jim Merrifield, Merrifield Patrick Vermillion

$2.5 Billion “Zombie” Buildings Sold Across US in 2016

According to CoStar, “zombie” office buildings – those 25,000 square feet or more in size with 90 percent vacancy – are being sought by real estate investors. Over 1,800 of these buildings exist, primarily in markets like Detroit, Northern New Jersey, Dallas/Fort Worth, Chicago and Washington, D.C. The count does not include buildings constructed in 2015 and 2016 that may be still going through initial lease up.

“[These are] empty or nearly lifeless office buildings that are still standing, creating dead zones that drain the vitality out of otherwise commercially viable areas,” according to the article. “And just like in movies, TV shows and video games, these zombies are being hunted; not by apocalypse survivors but by real estate investors.”

These vacant office buildings total over 160 million square feet and account for just over 2 percent of the nation’s total office inventory. Some areas see more “zombie” buildings than others; for Detroit and Northern New Jersey, that number is closer to one-third of vacant office space. In New York and San Francisco, they account for just 4 percent or less of total office vacancy.

Risk-tolerant investors see opportunity in these buildings, many of which sell at about a 25 percent discount compared to what investors are paying on average for all office properties nationally. A well-conceived redevelopment or re-use project could add significantly to the property’s value.

Join a Unified Development Ordinance Community Workshop

The City of Charlotte is updating their land use policies and development ordinances. This comprehensive effort – Charlotte Place Types & Unified Development Ordinance – will shape the future growth of our city.

Come lend your voice and learn more about these efforts by joining one of our upcoming workshop discussions. Each workshop is the same; simply choose the one that is most convenient for you.

Online meeting registration encouraged at: http://bit.ly/2frN7OJ.
For more information, visit CharlotteUDO.org.

South Workshop
Tuesday, November 29, 6-8 p.m.
Queens University Sports Complex, 2229 Tyvola Rd., Charlotte, NC 28210

Central Workshop
Friday, December 2, noon – 1 p.m.
Main Library, 310 North Tryon St., Charlotte, NC 28202

East Workshop
Thursday, December 8, 6-8 p.m.
Charlotte Museum of History, 3500 Shamrock Dr, Charlotte, NC 28215

West Workshop
Tuesday, December 13, 6-8 p.m.
Goodwill Opportunity Campus, 5301 Wilkinson Blvd, Charlotte, NC 28208

North Workshop
Thursday, December 15, 6-8 p.m.
The Oasis Shrine Auditorium, 604 Doug Mayes Pl, Charlotte, NC 28262

Industrial Space Vacancy Drops to 5.9 Percent

At the end of the second quarter 2016, industrial real estate posted its lowest vacancy rate in 16 years, thanks to growth in retail sales, residential construction and manufacturing, according to a new report by Marcus and Millichap titled “Industrial Research Report Second Half 2016.”

The report says that the sale of retail items persists as the principal force driving the sector’s lengthy surge, which is now in its seventh year. It cites omnichannel distribution, which combines traditional store locations with an online function, as a driver of change in industrial property site selection and design. At the forefront, according to the report, is Amazon. By the end of 2016, the company is expected to be operating 70 fulfillment and sorting centers, which is nearly two times the number the company had in 2011.

“The movement of more retail sales online and through warehouses and fulfillment centers is also creating potentially new strategies in the investment market for some owners of properties near major population centers,” according to the report. Owners capable of adapting to the delivery demands of e-commerce may choose to join the market.

Owners of other industrial assets may see a liquid investment market ahead, with the combination of continued equity flow and available debt.

Improving Cell Reception Inside Office Buildings

By Matthew Gaulin

Distributed antenna systems improve cellphone reception within office buildings.

IN TODAY’S FAST-PACED, digitally connected world, dependence on mobile devices has dramatically increased. Cellphones are no longer simple devices used only for voice communications. Smartphones and tablets are utilized for multiple tasks such as online shopping, navigation, social media, phone calls, video, etc. In the past, cellphone users were simply hoping to stay connected as they roamed from building to building. Now, users not only want to maintain voice communications when away from their home or office, but also expect to continue their voice and high-speed data communications seamlessly while inside these buildings.

Most large venues in the U.S. — shopping malls, stadiums and arenas — have addressed cellphone voice and Long Term Evolution (LTE) data coverage by either working with carriers to increase their macro networks (cell towers) outside the building or providing a distributed antenna system (DAS) inside the building. Although most office, industrial and residential buildings have not yet increased their macro networks or provided a DAS, tenants and other users of these spaces have the same expectations of continuous voice and high-speed data service.

Understanding the Problem

Some of the issues surrounding poor cell signals within a building can be attributed to the lack of cell towers within the proximate area or spotty coverage throughout the building. In a typical scenario, the lower floors of a high-rise office or multifamily residential building may have a usable signal, but the upper floors do not, even though cellphones indicate five bars. Locations on higher floors generally show strong signal strength, but cellphones cannot make a connection due to the high level of radio-frequency (RF) noise at those elevations. Although low-rise industrial buildings don’t have this problem, they also suffer from poor cell coverage because most are constructed with metal or concrete block walls, which block the RF signal.

The main reason for lack of cell signal within most buildings today, however, is low-E glass. This type of glass, which is designed to significantly improve the thermal efficiency of the building envelope as required by energy codes, blocks the RF signal. Since the glass effectively blocks the cellphone signal from entering the building from outside, the solution is to provide a system that will receive and broadcast the signal within the building. This is what a DAS system does.

Click here to read more.

NAIOP Charlotte’s Battle of the Bands Rocked!


NAIOP Charlotte hosted its inaugural Battle of the Bands on Thursday, November 10th and it was a hit! Click here to view photos from the Battle.

Many thanks to Good Bones, Grievous Angels and Roadkil for their outstanding performances! Congratulations to Grievous Angels who took home the trophy this year!


We are appreciative of all of our partners in success, whose support allowed NAIOP Charlotte to donate $5,000 to The Harvest Center.


Planning Committee
Jim Gamble, Bohler Engineering | Rebecca Herron, MPV | Mike Kramer, Bank of America | Jody Luke, The Korte Company | Henry Pharr, Horack Talley | Dawn Royle, Investors Title | Mark Simmons, Shiel Sexton Company, Inc | Cheryl Steele, Horack Talley | Ryan Stemmer, Richter Development | Amy Sullivan-Hicks, ECS Carolinas | Scott Wilson, Childress Klein Properties

Clifton Coble, Bissell | Brian Kreefer, The Keith Corporation | Sherry Waters, The Harvest Center

Mick Mixon, Carolina Panthers

Rock Stars – Elliott Davis Decosimo | Faison Enterprises
First American Title Insurance Company | Spectrum Properties

Superfans – Baker Audio Visual |Bass, Dunklin, McCullough & Smith, PLLC
Batson-Cook Construction | Bohler Engineering | GreerWalker | HomeTrust Bank | Horack Talley
Humphreys & Partners Architects, L.P. | Rodgers Builders | The Keith Corporation

We will rock it out again next year, so watch for a date in the near future.