Features

cbre-research-change-in-construction-employment-2005-2015

Labor Shortages Are Driving Up Construction Costs, Says CBRE

by Haisten Willis June 16, 2016

A new research report from CBRE says that despite the global collapse of commodity prices — including many key inputs to construction — overall construction costs continue to rise nationwide. This is largely because of worker shortages that have driven up labor costs, offsetting any savings on materials. In January, average total construction costs in the United States registered a year-over-year increase of 1.8 percent, according to the RSMeans Construction Cost Index (CCI). Since January 2011, the national CCI has increased by an annual average of 2.3 percent, resulting in a cumulative 11.8 percent increase during that period. “The price of materials is just one driver of overall construction costs,” says Andrea Cross, head of research for the Americas at CBRE and co-author of the report. “The cost of construction labor tends to be much more variable across geographies and over time, so it typically has a larger impact on overall cost trends.” Cross also notes that the collapse of the housing market and subsequent recession affected supply-side dynamics for new construction throughout the country, as a substantial number of construction workers left the industry during the downturn and never returned. Nationally, the number of workers employed in construction-related occupations …

June 16, 2016

Features Multifamily Office Retail Top Stories

Walkability On the Rise in America’s Major Cities, Study Finds

by Haisten Willis June 14, 2016

A new report from George Washington University finds that metropolitan areas in the United States are shifting toward developing more walkable areas, reversing a trend that dates back more than half a century. Christopher Leinberger and Michael Rodriguez of The George Washington University School of Business wrote the report, titled “Foot Traffic Ahead, Ranking Walkable Urbanism in America’s Largest Metros.” “The end of sprawl is in sight,” the authors write. “The nation’s largest metropolitan areas are focusing on building walkable urban development.” For what may be the first time in 60 years, the report finds that walkable urban places (WalkUPs) in all 30 of the largest metros are gaining market share over their drivable suburban competition, which is often accessible only by car. This has been coupled in recent years by substantially higher rental premiums in the office and retail sectors. The 30 metro areas measured include 46 percent of the nation’s population (145 million of 314 million) and 54 percent of the national GDP. They were measured based on the current percentage of occupied walkable urban office, retail and multifamily rental square feet in their WalkUPs. The top walkable metro areas are as follows: The study found that walkable …

June 14, 2016

Features Top Stories

No Alarm Bells Sounding Yet Over ‘Disappointing’ May Jobs Report

by Jeff Shaw June 9, 2016

Weak job growth in May has dealt an “employment curveball” to the U.S. economy, says Robert Bach, director of research for the Americas at Newmark Grubb Knight Frank. But the longtime economist is quick to add that the latest report from the U.S. Bureau of Labor Statistics (BLS) is an “outlier among a recent string of positive economic news,” including an uptick in both consumer spending and housing prices and a drop in weekly jobless claims. Employers added a meager 38,000 net new payroll jobs last month, according to the BLS, far below the 160,000 jobs forecasted in Bloomberg’s survey of economists. Revisions to March and April data subtracted a combined 59,000 jobs, revealing a three-month trend of slowing job growth. Over the past three months, job gains have averaged 116,000 per month. “If the report is not a quirk, then it suggests the economy, specifically the labor market, may be losing momentum,” says Bach. Employers could be reacting to falling profits and labor productivity, which have been under pressure for some time. It’s also possible that recent hikes in the minimum wage are restraining job formation — although restaurants would be among the first employers to feel the pinch, …

June 9, 2016

Conference Coverage Features North Carolina Southeast Top Stories

HB2 Brings Corporate Relocations in North Carolina to ‘Screeching Halt’

by John Nelson June 8, 2016

CHARLOTTE, N.C. — House Bill 2 (HB2), the recently passed North Carolina bill that requires transgender individuals to use public bathrooms corresponding to the sex on their birth certificate, has rocked the state since its passing on March 23. Tech giant PayPal has scrapped its previously announced plans to bring 400 jobs to Charlotte; artists such as Bruce Springsteen, Pearl Jam, Maroon 5 and Nick Jonas canceled planned concerts in North Carolina; and the NBA is considering moving its 2017 All Star Weekend away from Charlotte. In addition to these headlines, corporate relocation inquiries to North Carolina have essentially “gone away,” according to Chris Schaaf, executive vice president of JLL. “If you look at JLL’s core business and offerings, one of those services relates to major relocations. The easiest thing for me to do would be to sit up here and say how busy we are for that aspect of our business, but the reality is that it’s come absolutely to a screeching halt,” says Schaaf, speaking at the seventh-annual InterFace Carolinas conference held on June 1 at the Hilton Charlotte Center City. The conference drew 249 brokers, developers, contractors, financial intermediaries, owners and managers who do business in North …

June 8, 2016

Features Hospitality Top Stories

Warning Sign: Hotel Sector Sees First Year-Over-Year Occupancy Drop Since 2009

by Jeff Shaw June 7, 2016

Occupancy rates for U.S. hotels declined 0.5 percent during the first quarter of 2016, causing the first year-over-year decline since the fourth quarter of 2009, according to hotel data research firm STR. The Hendersonville, Tenn.-based company suggests that the industry has passed the inflection and is forecasting hotel occupancy declines in both 2016 and 2017. The national occupancy rate dropped from 61 percent in first-quarter 2015 to 60.7 percent in first-quarter 2016. The information was included in CBRE’s annual Hotel Horizons report, which suggests that new supply is outpacing hotel demand nationwide. Supply increased by 1.5 percent from first-quarter 2015 to first-quarter 2016, but demand only increased by 1 percent over the same time period. The report is not all bad news, however. CBRE predicts the average daily room rate (ADR) will increase by 4.3 percent in 2016, and another 4.9 percent in 2017. This increase in rates will offset the projected decline in occupancy, and result in an increase in revenue per available room (RevPAR) of 4.2 percent and 4.7 percent in 2016 and 2017, respectively. The numbers are modest compared with the 6 to 8 percent RevPAR increases of recent years, but positive nonetheless. “The first-quarter decline in occupancy …

June 7, 2016

Features Top Stories

AIA’s Architecture Billings Index Positive for Third Straight Month

by John Nelson June 2, 2016

WASHINGTON, D.C. — After beginning the year with a decline, the Architecture Billings Index (ABI) has posted three consecutive months of increasing demand for design activity at architecture firms. The American Institute of Architects (AIA) reported the April ABI score was 50.6, down from the mark of 51.9 in March but still in the positive territory. The score reflects an increase in design activity, with any score above 50 indicating an increase in billings. A barometer of future non-residential construction activity, the ABI reflects the roughly nine- to 12-month lead time between architecture billings and construction spending. The index is produced by The American Institute of Architects (AIA) Economics & Market Research Group. The score is tabulated based on a monthly survey sent to a panel of AIA member-owned architecture firms. The design contracts index jumped from 51.8 in March to 54.3 in April. The metric tracks trends in the dollar volume of signed design contracts, with any score above 50 reflecting a growing value of the design contracts signed by AIA member-owned firms. Because the design contracts index functions as an early indicator of construction contract awards, Kermit Baker, AIA’s chief economist, is confident that the growth in the …

June 2, 2016

Features Office Top Stories

U.S. Office Market to Benefit from Surge of Foreign Capital, Says Office Roundtable

by John Nelson May 31, 2016

MIAMI — Volatility in world markets affected capital flows to the U.S., contributing to a slowdown in office deals in the first quarter of 2016, but foreign funds are expected to surge in the second half of the year, according to an office roundtable held at Accesso Partners’ second annual Capital Markets Conference in Miami. Commercial brokerages attending the conference included CBRE, Eastdil Secured, JLL, HFF, NAI Global and NGKF. The majority of brokers in attendance said the opportunities today are in Class A suburban office properties with walkable amenities. “In almost every market, there are trophy suburban assets that offer a stronger risk-adjusted return than comparable properties in the central business district,” said Jim Postweiler, managing director of JLL’s Chicago office. “In strong submarkets, a suburban property can command yields that are difficult to obtain in CBDs today.” Other brokers and office acquisition specialists said office towers and mid-rise buildings in CBDs are experiencing rising demand from institutional investors eager to invest in “repositioned” assets. “There is still good leasing activity in these markets and more importantly, a good rent growth story,” said Will Yowell, vice chairman of CBRE’s Atlanta office. “We think the markets have another 18 to …

May 31, 2016

Features Top Stories

Viability of Surface Level Parking Declines Amid Retail Shift to Pedestrian Mixed-Use Environments

by Katie Sloan May 26, 2016

The United States devotes a lot of land to parking, with nearly 500 million parking spaces nationwide. That equates to around 4 million acres or 6,000 square miles of surface parking — an amount of space roughly equal to the land area of Hawaii. With about 250 million cars on the roads today, that’s more than 700 square feet or two surface parking spaces for every single car. It probably doesn’t seem like it when you are circling the block for the tenth time looking for that perfect space, but trust me — we have plenty of parking in this country. Remember, that’s just surface parking — nothing above or below those spaces. It doesn’t account for parking structures, mixed-use projects or garages attached to suburban single-family homes across the U.S. If those are added, the total spaces skyrockets into the billions by some estimates. It is no mystery how we got here. The growth patterns of the United States are well documented. The sprawling development of most American cities has solidified the dependence on the automobile, with cars and roads claiming more and more real estate. This, in turn, continues to spread development out further, which fosters the need …

May 26, 2016

Features Top Stories

RECon Recap: Ben Bernanke Discusses Hits, Misses of U.S. Economic Recovery

by Jeff Shaw May 24, 2016

LAS VEGAS — This is a “Rodney Dangerfield recovery,” declares Dr. Ben Bernanke, former chairman of the Federal Reserve. Much like the late comedian, it gets no respect. Referred to by President Barack Obama as “the epitome of calm,” the 14th chairman of the Federal Reserve shared his insights during a one-on-one interview with Marcus & Millichap’s new CEO, Hessam Nadji, as part of the brokerage firm’s 18th annual Retail Trends program at the Renaissance Las Vegas Hotel early Monday evening. The program was held in conjunction with the International Council of Shopping Centers’ (ICSC) RECon event, the marquee convention in the shopping center industry. This year the convention attracted 36,000 registered attendees, up from 35,000 a year ago and a post-recession high. The annual convention is a wall-to-wall networking and dealmaking event with educational sessions mixed in. “In some dimensions it has been a strong recovery, in others it has been disappointing,” says Bernanke, who served as Fed chairman from February 2006 through January 2014. The Upside U.S. employers have added 15 million jobs over the past seven years, says Bernanke triumphantly before rattling off some other positive economic indicators. The unemployment rate is down to 5 percent, housing …

May 24, 2016

Features Top Stories

RECon Recon: A Glimpse at What Retail Marketing Professionals Can Expect to See and Hear at RECon 2016

by Katie Sloan May 23, 2016

As someone that has been driving and supporting public relations and marketing programs for developers, property managers, retailers, brokers and consultants for more than 25 years, ICSC’s Spring RECon convention in Las Vegas has become an annual ritual. I haven’t missed a single May conference in nearly 20 years. Like all longtime attendees, I’ve seen the good, the great and the ugly and I’ve come to see RECon as an important window into an evolving industry. My perspective as a public relations and marketing professional has been shaped by experiences that include representing some of the most influential developers and iconic destinations in the industry. I’ve helped open centers all over the country, and my firm has become adept at working with our clients to secure approvals and public support; drive communication around public and private financing efforts; and elevate traffic, increase visibility and shape and share the public narrative for standout projects and industry visionaries and leaders. Along the way, I’ve seen retail marketing change in very exciting ways. In recent years, the most savvy developers, owners and managers have become more sophisticated — leveraging advanced tools, new technologies and a proven understanding about what makes spaces and places memorable …

May 23, 2016

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