From the Editor: Challenges Continue Into a New Year

Jennifer LeFurgy

The good news is the U.S. economy grew 7.4% in the third quarter of 2020. The not-so-good news is the number of coronavirus cases continues to rise.

Despite the promise of a rapidly developed vaccine, the first half of 2021 will be uncertain for the commercial real estate industry. While the industrial sector continues to do well thanks to e-commerce demand, retail is struggling, and the office sector faces an adjustment. Many companies have extended their office closures and limited business travel into mid-2021. And some question if the current economic growth rate can be sustained.

We will undoubtedly face a markedly changed economic landscape and way of doing business next year. My hope is that we can learn from the challenges we have faced during this difficult year and share these lessons in our NAIOP community.

Stay safe,
Jennifer LeFurgy, Ph.D.
Editor-in-Chief

In This Issue:

• A new class of speculative refrigerated facilities could be poised for strong growth amid record-setting demand for grocery deliveries during the COVID-19 crisis.
• Life sciences real estate is one of the hottest investment opportunities right now, but it’s important to note that these buildings are complex structures that can be costly to build and operate.
• The COVID-19 pandemic has created challenges — and opportunities — for commercial real estate. Both aspects were topics of discussion during NAIOP’s CRE.Converge Virtual 2020, held in October.
• The NAIOP Research Foundation’s National Research Directors Meeting in late September provided a virtual discussion of current trends in office and industrial development.
• A survey of commercial real estate professionals shows that 2020 was a difficult year for pay, benefits and staffing levels — and 2021 might not be any easier.
• The latest Commercial Real Estate Women (CREW) Network study measuring diversity in the commercial real estate industry shows that not much has changed since the last survey in 2015.
• In the wake of the COVID-19 pandemic, building owners in many cities now must deal with property damage caused by widespread civil unrest and rioting.
• Data center operators are increasingly making wholesale changes to their future business strategies and operations, from site locations to the types of employees they plan to hire.
• Determining whether a building is “vacant” or “unoccupied” could be a crucial factor when it comes to paying insurance claims.
• The COVID-19 pandemic has had a major impact on urban mass-transit systems across the country, straining budgets and reducing service for passengers.
• Modular construction can be a good choice for workforce housing and other mid-market residential developments where affordability is a primary consideration.
• In Calumet City, Illinois, a vacant Super Target store will soon be turned into a vertical farm with the capacity to produce 25 million leafy green plants each year.
• Canada’s federal government moved quickly with a series of wide-ranging economic support measures when the COVID-19 pandemic gripped the country in March.
• Steve Martin, the owner of Atlanta-based SDM Partners and NAIOP’s 2015 national chair, shares lessons learned as someone who struck out on his own in the commercial real estate business.
• Landlords need to be aware of the many legal ramifications of leases that end up in bankruptcy.
• The NAIOP Research Foundation recently published a report titled “The Evolution of the Warehouse: Trends in Technology, Design, Development and Delivery.” Here’s a preview.

Most Popular From Fall 2020

1. “Kilroy Realty Corporation: Commitment, Culture, People”
2. “Rethinking Real Estate: The Office of the Future”
3. “Construction Uncertainty Continues as Pandemic Persists”
4. “There's Opportunity at the Office Park”
5. “Cold Storage Can Be Complex and Costly”