July, 2019 - Sachse Construction
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Month: July 2019

5 Ways to Activate ‘Dead Space’ in Mixed-Use Developments

by Sachse Team

While it will always be the tenants that bring traffic to a development, the real challenge for developers is keeping the traffic on-site for an extended period of time, creating opportunities for both cross-shopping and guest engagement.

Increasing dwell time has been a primary focus of developers and tenants alike given the fact that when customers linger, they spend more. According to a study by Path Intelligence, increasing dwell time by just 1% leads to an average 1.3% increase in sales, and for tenants that can add up.

Developers can add value by activating underutilized space to increase guest interaction and introduce programming and placemaking to keep consumers engaged. Building façades, alleyways, and even parking lots (once thought of as dead space) can all be repurposed to not only differentiate your property, but allow for a more memorable connection with guests.

HERE ARE FIVE WAYS TO ACTIVATE ‘DEAD SPACE’ IN MIXED-USE DEVELOPMENTS

1. Celebrate the destination. By understanding the unique location and target consumers, developers can find opportunities to bring a local connection to the forefront. Consumers organically form stronger bonds with destinations they feel they can relate to on a personal level. Developers should leverage this opportunity to identify meaningful symbols or touchpoints that bring the unique community to life.

From commissioning a local artist to activate a parking garage wall, to implementing a regional hobby like cornhole outside a food court, there are opportunities to make a more meaningful connection with local shoppers, so it doesn’t just feel like “a shopping center”—it feels like “their shopping center.”

2. Make space functional. Provide guests with opportunities to become immersed in the experience, through touch, trial, and play. Anytime you can allow for interactive experiences you are no longer offering just products, you are engaging consumers and creating more reasons to visit. For example, turning a building façade into a rock-climbing wall or carving out space for a dog park gives the property robust lifestyle offerings that can benefit both the shopper and the tenants.

A development that offers guests both product and meaningful services is more likely to thrive as some legacy retailers struggle to adapt to the changing industry. Leveraging space for engaging programming, activities, and events will continue to bring guests to your property.

3. Tell the brand story. Walls should never just be walls—they are a foundation to personalize a development and engage your guests in your unique brand story. Your brand can no longer live just on the pylon. There should be touchpoints and winks to the brand throughout the space, from wayfinding to doorknobs. Every inch of your environment is a chance to introduce your brand voice to your guest.

Consider ways to demonstrate your brand through non-graphic/non-obvious decisions, as well. Does your brand have a focus on sustainability? Perhaps you leverage biophilic design to represent this. Are you more about creating community? Consider seating fixtures and furnishings that encourage gathering. By bringing their brand to life, developers have a chance to make a big emotional connection, with a small investment.

4. Leverage the parking lot. With the rise of car-sharing programs, developers will have more open parking space than ever before and should find ways to re-purpose that valuable square footage. Identifying opportunities to better leverage this space, both functionally and aesthetically, is vital.

Create dedicated click-and-collect parking spaces or BOPIS (buy online pickup in store) drive-through lanes to differentiate your development. Store pick-ups accounted for nearly a third of U.S. online sales last November and December, up from 22% just a year earlier, according to GlobalData Retail. These offerings would keep development traffic efficient and customer satisfaction high. And providing experiential offerings—food trucks, farmers markets, movie nights—in overflow parking spaces will keep the experience fresh to increase return visits.

5. Tell the local story. Find the story behind the site and tell it in a meaningful way to further enrich the customer experience. Stories of our history come in various shapes and sizes: notable property owners, history of the town, fun facts, etc.

A recent project in downtown Cincinnati leveraged underutilized sidewalks to tell the region’s rich brewing history through a series of wayfinding and graphic installations. Through rich storytelling and impactful graphics, this urban trail takes visitors and residents alike on a historical journey of adventure and discovery, in an area that was previously undervalued. Developers can take the same approach, identifying underutilized space on their property and bringing it to life by adding a layer of environmental graphics, placemaking, or storytelling.

From parking lots to branded moments, dog parks to local art, people are seeking new, enjoyable experience. Find those moments of wow that engage customers on a deeper level, creating enjoyment and reasons to come back. Find opportunities to create social media moments, impactful design that people want to share. Most of all, have fun with leftover spaces. Take your guests on unexpected experiences by simply rethinking the space between.

New AI-Enabled Technology Quickly Identifies Bridge Defects

by Sachse Team

The standard approach to identifying structural deficiencies in bridge decks is decidedly low tech. The time-intensive “sounding” process requires ground crews to drag a chain across the surface of the road to listen for hollow-sounding fluctuations and watch for vibrations. Often requiring road closures for days or weeks at a time, the technique creates headaches and hazards for motorists, road workers and inspectors.

Two companies aim to bring the bridge inspection process into the 21st century with a new system that employs drones, artificial intelligence and algorithms to quickly spot defects and problems. The creators of the patent-pending methodology estimate it can help transportation projects slash up to 70% in man hours compared to traditional methods, in less than half the time.

The program, a joint project of Kansas-based AEC firm GBA and AI provider Dynam.AI, records overhead images shot from an unmanned aircraft hovering about 200 feet above the bridge. Equipped with FLIR infrared thermography cameras, the DJI-made drones evaluate the condition of concrete decks, overlayments and bridge joints.

The camera’s infrared sensors can detect electromagnetic radiation and heat fluctuations that indicate areas of stress, said Ben Lindner, advanced robotics and remote sensing group leader at GBA. The aim of the surveillance, which requires a trained operator and a spotter who keeps an eye on surroundings, is to detect compromised areas before potholes develop and further erode the structure.

Once the images are captured, Dynam.AI’s Auguste algorithm then converts the findings into data streams that detect areas of decay with greater than 85% accuracy. The combined technology can detect problems unseen by the human eye, said Lindner, and can also convert images into 3D models to help visualize anomalies.

“A human can detect a pattern of temperature changes, but by using a computer vision system you can get down to the pixel level,” he said. “It’s kind of like an X-ray vision that helps identify portions of the bridge that are at risk of delaminating.”

Impact assessment

The need for timely and accurate inspection of bridges and other structures is growing as America’s infrastructure ages. According to a 2019 study from the American Road & Transportation Builders Association, the U.S. has over 47,000 structurally deficient bridges.

“The economic value of quicker bridge inspections is kind of tremendous, when you look at the financial need for infrastructure repairs today,” David Ferrell, managing director of Dynam.AI, told Construction Dive. “It also can help save lives and create a better work environment for civil engineers who don’t have to strap on a hard hat and step out where traffic is whizzing by at 70 miles per hour.”

GBA has used the new system on about 35 projects over the past year, including along the I-135 Canal Route highway through Wichita, Kansas. For that project, the company inspected five linear miles of bridges for a total of 1.6 million square feet of bridge deck and 594 bearing assemblies, Lindner said.

That stretch of highway carries an average of 92,500 vehicles a day, according to the Kansas Department of Transportation, so minimizing closures was a big priority.

“To shut that down and do a traditional chain drag would have meant six to eight weeks of traffic disruption and put traffic engineers in harm’s way,” Lindner said. Instead, the drone-based data collection took five days.

The project team estimates that the process saved $250,000 on direct costs alone. In the future, the tool will allow KDOT to track areas of damage as repairs are made or additional assessments are gathered.

Future applications

The system has improved since it was launched nine months ago, Lindner said. For instance, the drones can now pinpoint issues to within a very precise area of roadway. Earlier versions were accurate to within 5 to 15 feet, but the program is now accurate within just a few feet.

“Getting within less than 5 feet may not seem like much, but it is a big difference,” he said, “it can mean not having to shut down an entire lane of traffic to make repairs.”

While the system is designed for inspection of existing bridges, the techniques it employs could be a stepping stone to technologies that can help avoid a situation like that of the Florida International University pedestrian bridge that collapsed just before opening last year, said Ferrell.

In addition, the team sees the potential for infrared-equipped drones helping with analysis of new construction such as parking lots, power plants and evaluating the curing temperature of concrete, said Lindner.

The goal for now, though, is to develop an off-the-shelf bridge inspection solution that is available to traffic engineers and builders nationwide. “We’re trying to wrap all of this technology up in a neat piece of software,” Lindner said.

New Cool Roof Technologies Adapt to the Weather

by Sachse Team

Cool roofs can be made of a highly reflective type of paint, a sheet covering or highly reflective tiles or shingles. Nearly any type of building in any locale can benefit from a cool roof, but builders and designers must consider the climate and other factors before deciding to install one, according to the Department of Energy.

Standard or dark roofs can reach temperatures of 150 degrees F or more in the summer sun. A cool roof under the same conditions could stay more than 50 degrees F cooler and save energy and money by using less air conditioning, the DOE says.

As the need for more climate-resilient building products increases, scientists around the world are studying new cool roof products that can change with the seasons. They include:

  • A system that encapsulates an inorganic PCM between reflective aluminum foil sheets. Researchers found that PCMs employed in this way reduce summer cooling loads without impairing winter thermal performance.
  • Smart coatings that may be applied directly to roofing materials to selectively reflect and absorb heat. One of these, United Environment & Energy’s bio-based thermochromic material, is made of waste cooking oil.
  • A surface technology that “sweats” like human skin to cool buildings. Designed by scientists in Switzerland, the system incorporates a thermo-responsive hydrogel that releases stored water when the air temperature exceeds 90 degrees F. As this water evaporates, it provides a cooler surface temperature for about three hours, researchers found.
  • Smart ceramic roof tiles with a surface coating of tungsten trioxide that allow infrared light to pass through at temperatures below 120 degrees F but block rays above that threshold.

How Tech Is Taking On Its Biggest Challenge Yet: Real Estate

by Sachse Team

It’s 2019, and the pace of innovation across industries is accelerating at breakneck speed.

Mobile experiences have unlocked new shortcuts for travelers. Busy 9-to-5 professionals are ordering pre-cooked dishes to their doorstep because meal kits weren’t convenient enough. Walk-out trackers are eliminating the need for long lines at the grocery store. (If you’ve ever tried to grab lunch at the supermarket in a big city, you know what a game-changer this is.)

And yet, the process of buying or selling a home looks a lot like it did 10, 20, 30 years ago. Each step of the way still relies at least in part on manual systems, physical paperwork, analog communications or tricky logistics, leaving consumers exhausted by a time-consuming and costly endeavor.

But it’s naive to think that real estate is standing still. The pressure to reduce friction is more palpable than ever. According to data from CB Insights, the amount of venture capital poured into real estate tech increased from about $20 million in 2008 to $3.9 billion in 2018.

In the next five years, the face of real estate will be transformed by technology.

Waves Of VC Funding Fuel The Rise Of Real Estate Tech

With the value of the housing market totaling a massive $33.3 trillion, there’s enormous opportunity for anyone who can claim even small slices of market share or solve a single pain point.

Entrepreneurs have taken notice. Consumers demand convenience, certainty and choice in all aspects of their lives. Our firm is among a slew of startups in the space that are actively working to improve different segments of the homebuying transaction, in ways that I predict will change everything we currently know about buying and selling homes.

Home Search

In the early 2000s, companies like Zillow and Trulia put the power of property search in buyers’ hands. The next wave of transformation will come through AI and big data. These technologies will narrow down a consumer’s options among a sea of listings (think property match, rather than property search), and innovations like voice commands will make asking to see the perfect home even easier.

The Showings Process

Improvements in virtual, augmented and mixed reality will empower more people to purchase homes sight unseen, while self-guided tours and smart locks will make on-demand showings the norm.

Access To Home equity And Timing Multiple Transactions

It’s tricky to buy a new home before you can get the money out of your old one. Companies are fixing that with offerings like home swaps, trade-ins and trade-ups that reserve your next residence while they take care of your existing home sale. Meanwhile, instant buyers, known also as iBuyers, ease the seller’s plight with quick closings.

Security Risks

Blockchain has the potential to make digitized closings more secure through the use of smart contracts. These encrypted forms eliminate the need for sharing sensitive wire information over hackable platforms like email.

Paper-Driven Escrow And Closing

Streamlining closing is an uphill battle against steep regulations, complex processes and ingrained human involvement. Yet there’s been headway made in settlement technologies, e-documentation and virtual notarizations.

Where The Real Estate Agent Fits In

Tech disruption often means machines replace a job that humans once did. While this might be the case for mechanical, repetitive work like factory assembly, bowling alley pin setting and subway ticket punching, real estate is fundamentally different. Despite all the improvements toward a more convenient, streamlined transaction, there are a few reasons why real estate agents are positioned to remain vital players.

For one, consumers will have a hard time moving away from an open-market process. Basic economics would say a market process is the only way to get the most money for your house — any other way you slice it, there’s an intermediary who takes a cut at the homeowner’s expense.  And not everyone (arguably, a slim minority) will want to navigate that market alone, especially when it comes to their largest financial asset.

As technology smooths out certain pain points, however, the agent’s value proposition will shift even more toward an advisory role empowered by as much technology as they’re willing to adopt, learn and integrate into their own processes. It will be critical for agents to accept rather than resist the changes around them and find ways to make their clients’ lives easier.

Real Estate: An Industry Of Its Own

The truth is that real estate is unlike any other good or service. You can’t compare selling your house to selling a cup of coffee. Decisions surrounding a person’s home hold more weight than their next e-book purchase or shopping app download. No one will snap their fingers and revolutionize such a highly regulated, complex exchange overnight by releasing a new-fangled API.

Evolution in this space will come as a series of baby steps, gradual tweaks and solutions that will converge and go mainstream in the future. Real estate is on the precipice of change. It’s a slow ride, but blink and you’ll miss it.

Five Must-Dos When Designing a Law Firm Workplace

by Sachse Team

Law firms are placing ever-increasing importance on thoughtful workplace design to attract and retain top talent, making every office build-out or renovation a critical opportunity to win the talent war. With millennials expected to comprise 75 percent of the workforce by 2030, law firm design trends are being driven by an evolving culture that prioritizes individual workplace experiences, health and well-being, and ubiquitous technology.

The future of law firm design is rooted in change. Designers are not just designers anymore—they’re change management consultants. Architects and contractors often work with law firms’ human resources teams, facilities managers and the lawyers themselves to align the existing workforce culture with a realistic design approach. In doing so, five considerations are typically front-of-mind, if not mandatory:

1. Recruitment and Retention of the Next Attorney Generation

Just because you build it, doesn’t mean they will come (or stay), and one size does not fit all. It boils down to getting to know your people, recognizing the culture and understanding the aspirations of young attorneys moving up in the workplace before applying something across the board.

For example, the idea behind open office workstations for attorneys is rooted in thoughtful cost reduction, however there are many factors that influence whether that may or may not work, including the ever-present client confidentiality factor (both from an acoustical standpoint and from a visual standpoint) and requisite privacy.

Junior-level attorneys still view the location and size of their office, and migrating from a smaller to a larger office, as a reflection of professional progress. They aspire to the highly coveted “corner office” or larger office. It seems that private offices, whether varied in size or a universal size, are a permanent fixture in law firms for myriad reasons.

A modern alternative to open officing that promotes connectedness and increases workforce facetime is the increasing application of an intercommunicating stair. Rather than a library, additional secretarial space or mock trial rooms, law firms installing a communicating stair between floors are attempting to align themselves with the collaborative nature of tech firms and corporate HQs.

2. The Workplace Experience for the Individual

While the value proposition of a dedicated private office is still strong in law firms, attorneys appreciate having choices or offices available to them outside of the four walls of their office. If the technology is available to support them, attorneys are placing more value on breakaway spaces in which to work in a collaborative setting or in an environment that is still solitary but in a different footprint, such as a comfortable-yet-functional indoor “lounge” space or outdoor space for mild weather. It has become necessary to provide law firm attorneys and staff with options to show consideration of the individual workplace experience.

Given the tremendous pressure placed on attorneys to maximize billable hours, the more opportunities they are given to leave their desks, work solitarily in a different room surrounded by something different on the wall or a different color, with different acoustics, or even meet in a small room or hang out in the café, the better.

3. Health and Well-being in a Demanding Workplace

Wellness is paramount for overworked law firm attorneys and staff. While the legal industry has historically been a slow adopter of modern office trends, it’s taking a step forward in wellness. Law firms are showing greater sensitivity to nutrition through a fresh market kind of approach, offering fruit, yogurt and different water options as opposed to soda and candy bars in vending machines. Many new law firm offices feature yoga and retreat rooms, which are only starting to be featured in other markets.

Perhaps most significantly, many law firms are creating a director of well-being role, charged with cultivating a healthy work environment and helping drive work life balance initiatives. Well known for their long hours and the struggle to maintain work life balance, law firms, beginning with office design decisions, must adopt more sensitive and thoughtful initiatives that contribute to the well-being of their people. This will help to avoid the increased trend of younger associates burning out and leaving the industry for good.

4. The Power of Ubiquitous Tech

In order to achieve work-life balance, law firms must create and follow through on work-remote policies. To successfully support such a policy, firms need a strong technology infrastructure. Ubiquitous technology is the idea that attorneys and law firm staff can be technologically supported both internally in the workplace and externally outside of the office.

Although client confidentiality concerns preclude certain platforms and technologies from being stored on the cloud, ubiquitous technology holds law firms accountable to make investments on speedy infrastructure previously limited due to operational cost controls.

In 2005, large law firms invested in technology in their conference centers, but not on the work floor. Now they are spending more throughout their spaces on AV because it’s critical to their business. Tenant workplace investment has shifted away from high-end finishes, millwork and stone to greater investment in technology and glass facades that introduce light to the interior desks sitting just outside of the perimeter office landscape.

This shift over the past 10 to 15 years means technology infrastructure improvements now represent 40-45% of the tenant improvement factor. Response time, client accommodation, speed and access are so paramount to the business that without this reallocation of investment, law firms will fall drastically behind.

5. Future-Proof Updates

Future-proofing a law firm is more possible than ever, but it requires clients to spend a great deal of time planning and analyzing what role the workplace will need to serve seven to eight years into a lease term. Firms must budget accordingly to accommodate the impact of foolproof flexibility. Potential growth, staff increases, space decreases, infrastructure concerns with shifting technology, and future density must all be taken into account to minimize capital expenditure over the lease term.

If possible, companies should utilize a modular approach to allow for inexpensive future changes, budget accordingly and plan for what-if factors. Firms must consider the repercussions of changes; for example, what elements would be costly to move if a wall comes down, such as a sprinkler system, and which are more flexible, such as lighting.

Traditionally, law firms renew office leases in older buildings that contain perimeter private offices and only think about future changes in carpet and paint. But, older buildings are optimal in allowing firms to build-out using modules to accommodate future change with minimal impact, maintaining the traditional perimeter-office style and allowing for increased collaboration space in the core.

With the one-attorney-to-one-secretary ratio nearly obsolete, using glass as private office facades to shed light into the interior space is not as important as it was 10 years ago. The next big question in law firm design is: how do you make that interior zone experience as welcoming and desirable as that coveted perimeter?

As law firms prepare for a workforce centered on factors such as connectivity, flexibility and wellness, their workplace must reflect that shifting dynamic and be able to continually evolve. By working with their design and construction teams, firm HR and facilities leadership can create office spaces that reflect their future-focused culture.

Garden-Style Apartment Projects Allow Developers to Expand in the Suburbs

by Sachse Team

Developers in the U.S. continue to build more low-rise apartment buildings than any other type of construction. That includes a high volume of new garden-style apartment buildings—often three-story “breezeway” apartments.

“The ‘same old breezeway’ apartments are still getting built in the same old way,” says Walter Hughes, chief innovation officer with Humphreys & Partners Architects, based in Dallas, Texas.

In recent years, multifamily developers have come to vastly prefer mid-rise and high-rise buildings that squeeze more apartment units onto an average acre. But in many parts of the country, and especially in suburban submarkets, local officials refuse to allow developers to build mid-rise or high-rise structures.

“We’re accustomed to talking about development in terms of the urban core, but there is still a lot of building going on in the suburbs,” says Caitlin Sugrue Walter, vice president of research for the National Multifamily Housing Council (NMHC).

Low-rise buildings accounted for more than half of new units in 2018

Of the new apartments that opened in 2018, more than half (56 percent) were in newly-built low-rise buildings, according to data from Yardi Matrix.

By comparison, between 1990 and 1999, more than 90 percent of all new apartments coming on-line were located in low-rise buildings. “Following this trend, garden apartments are poised to lose their dominance in the apartment construction sector in the next few years,” says Adrian Rosenberg, communications specialist with Yardi’s RENTCafé.

For now, however, garden-style apartments still dominate the development pipelines of many multifamily developers. That might come as a surprise, since these low-rise projects aren’t the deals developers tend to highlight in press releases and their annual reports. But garden-style apartment projects still make sense, especially in exclusive suburban markets where local officials restrict new construction and land is still relatively affordable.

For example, the news if full of towering rental buildings rising in top urban markets like Downtown Brooklyn and Long Island City in Queens. But in terms of sheer numbers, Brooklyn and Queens have been the most active markets in the U.S. for the number of low-rise apartment projects completed since 2010, according to Yardi. That includes a lot of development in neighborhoods far from the city’s bustling downtown areas and waterfront hubs.

“Land has to be cheap in order for [garden-style apartments] to pencil out,” says Andrew Rybczynski, senior consultant with research firm CoStar Portfolio Strategy. “About half of what’s been built in suburban areas this cycle has been garden.”

For example, developers have been busy buildinglow-rise apartment properties in markets including Las Vegas, California’s Inland Empire and Memphis, Tenn., according to CoStar. Texas as been especially promising for garden-style apartment development—a third of the garden-style apartments built in the top 54 markets in the country since the recovery began have been in Texas, CoStar data shows. That includes almost 125,000 new garden-style apartments in Austin, San Antonio, Dallas, and Houston. Particularly active submarkets include Pflugerville in Austin, Allen/McKinney in Dallas, Northwest Houston and Far West San Antonio.

In Fresno, Calif., Las Vegas, El Paso, Texas, Albuquerque, N.M., Mesa, Ariz., Jacksonville, Fla. and San Antonio, garden-style apartments make up 90 percent or more of overall development, according to Yardi.

Typically, garden-style apartment buildings are about three stories high, fitting about 26 apartments on an average acre. Some designers are trying to fit more units per acre into their low-rise projects, up to 40 units, according to Hughes.

That’s a lot of density for a low-rise apartment community, though it’s still just a fraction of the density that developers can fit into a typical mid-rise building.

“An average garden apartment community is ludicrously unproductive on a per acre basis, so garden also only makes sense in areas that will not allow hi-rise, or even mid-rise. These tend to be restrictive suburbs,” says Rybczynski. “The restrictions on more productive use of land help drive down the price and allow garden to make economic sense.”

Retailers Experiment with Mini Distribution Centers in Their Stores

by Sachse Team

An increasing number of retailers are experimenting with mini distribution centers in their bricks-and-mortar locations to leverage existing physical footprints and dodge record high prices in the industrial sector.

“If [retailers] are already paying rent for a space, and they don’t need 100 percent of it, could they take 25 to 30 percent, and put stock in there? Versus trying to go and buy [or rent a warehouse at an additional cost], then they’re paying a trucker to truck that product to that warehouse and then have the trucker send it to either the store or the consumer,” says Anjee Solanki, national director of retail services at Colliers International, a commercial real estate firm. “Why not store it in the space that they’re already renting?”

Along with retailers getting the opportunity to save on operating costs, retail landlords can also benefit from a mini distribution center on their properties. First, the concept helps landlords struggling with high vacancy for large box formats, as there are fewer potential retail replacements for the space than there were a few years ago. Second, having a mini distribution center in the same location as the physical store means online sales would go through that location. Due to this, landlords can then request the retailer to include those online sales in their reporting, upping the amount of percentage rent their tenants pay, according to Solanki.

“We’re now seeing the reuse of physical retail stores gain popularity,” she notes. “What this means is companies are incorporating or leveraging the physical store combined with a distribution center. Leveraging the brand and infrastructure can provide traditional retailers a new path without allocating additional capital towards new distribution centers, while also providing customers with on-demand requests and maintaining efficient in-store inventory levels.”

There are potential drawbacks, however. A mini distribution center can mean a retailer is effectively using part of its gross area for something other than direct sales, which can then trigger certain lease restrictions with other tenants at the property. Many retail leases include all-retail selling clauses language in them, according to Solanki, meaning if one tenant is cutting its space to make room for a mini distribution center, its neighbors can accuse the landlord of not maintaining this part of the clause and request reduced rent or lease termination.

Whether bricks-and-mortar retailers can leverage the on-site distribution center effectively “really depends on if they have the expertise and can scale that aspect of the business. It’s certainly beneficial [because of] the proximity to your ultimate consumer,” says Patrick Healey, president of Caliber Financial Partners, a financial consultant company for tax strategies, investment management and estate management. “But I don’t think that’s going to be an overall trend just because of how efficient Amazon is and how efficient some of the overnight shippers are. It’s very difficult to replicate that for a retailer. That’s not their expertise.”

Leveraging an already existing physical footprint allows retailers to dodge paying to buy or rent industrial space while that sector is at its peak. Net asking rents for industrial space increased by 0.4 percent quarter-over-quarter to $7.50 per sq. ft. in the second quarter of 2019, the highest level since CBRE Econometric Advisors began tracking the metric in 1989. Year-over-year, rents rose by 6.4 percent, or two percentage points above the average annual growth rate since 2012, according to CBRE data.

Around 20 percent of industrial leases in the U.S. will be signed by retailers in 2019, as they look to strengthen their last-mile delivery strategies, according to research by brokerage firm Marcus & Millichap. Retailers accounted for just 14 percent of the nation’s industrial leases in 2008.

“At $12.8 billion, e-commerce is still a small percentage of overall third-party logistic revenues, but it is growing quickly,” says Solanki. “Present-day supply chains are highly integrated, and shippers increasingly rely on third-party logistics for expertise and sourcing knowledge.”

E-commerce sales year-over-year increased by 9.5 percent, while core retail sales growth increased by 3.8 percent, according to Marcus & Millichap research.

Construction Employment Data Demonstrates Need for New Career, Technical Educational Programs

by Sachse Team

Forty-two states added construction jobs between June 2018 and June 2019, while construction employment increased in 30 states from May to June, according to an analysis by the Associated General Contractors of America of Labor Department data released recently. Association officials said the new construction employment data demonstrates the need for new federal investments in career and technical education programs, along with immigration reform.

“Construction demand remains robust across most states, and contractors continue to add workers when they can find them,” stated chief economist Ken Simonson. “But contractors are struggling to find all the workers they need in many states, as shown by the historically high number of job openings at the end of May.”

California added the most construction jobs over the year (40,300 jobs, 4.7%), followed by Texas (39,500 jobs, 5.4%), Florida (25,800 jobs, 4.8%), Arizona (18,200 jobs, 11.6%) and Georgia (12,700 jobs, 6.5%). West Virginia added the highest percentage of construction jobs over 12 months (19.8%, 8,100 jobs), followed by Wyoming (14.1%, 2,800 jobs), Arizona and Alaska (10.3%, 1,600 jobs). Construction employment reached a record high in four states: Colorado, Oklahoma, Oregon and Texas.

Eight states shed construction jobs over the latest 12 months, while employment was unchanged in the District of Columbia. Louisiana lost the largest number and percentage of construction jobs (-12,300 jobs, -8.0%). Other states with large job losses include Massachusetts (-3,400 jobs, -2.1%), Maryland (-2,200 jobs, -1.4%), Connecticut (-1,000 jobs, -1.7%) and Montana (-800 jobs, -2.8%). Other states with a substantial percentage decline include Montana, Vermont (-2.7%, -400 jobs), Massachusetts, Connecticut and Maryland.

California added the most construction jobs between May and June (11,900 jobs, 1.3%), followed by Texas (6,100 jobs, 0.8%), Georgia (2,000 jobs, 1.0%), Florida (1,900 jobs, 0.3%) and Arizona (1,800 jobs, 1.0%). Wyoming added the highest percentage of construction jobs for the month (3.7%, 800 jobs), followed by Maine (2.8%, 800 jobs), West Virginia (2.3%, 1,100 jobs) and Vermont (2.1%, 300 jobs).

Construction employment decreased from May to June in 17 states and was flat in Alaska, D.C., New York and Rhode Island. Nevada lost the largest number and percentage of construction jobs for the month (-4,200 jobs, -4.1%), followed by Louisiana (-1,800 jobs, -1.3%), Connecticut (-1,100 jobs, -1.9%), Illinois (-900 jobs, -0.4%) and Massachusetts (-900 jobs, -0.6%). Other states with a substantial percentage decline for the month included Connecticut, Louisiana, Idaho (-0.6%, -300 jobs) and Massachusetts.

Association officials said that with unemployment rates at historic lows in many states, there is an urgent need for Congress and the Trump administration to boost funding for career and technical education programs and enact immigration reforms. These measures would make it easier for schools to set up construction-focused programs while immigration reform will allow more people with construction skills to legally enter the country.

“Contractors are eager to add even more high-paying middle-class jobs if they could only find more qualified workers to hire,” said Stephen E. Sandherr, the association’s CEO. “The federal government should make it easier to prepare and attract more people into construction. Such steps will provide significant benefits to the broader economy.”