Although retail analysts in recent years have focused on the decline of bricks and mortar space, due to the explosion in e-commerce, that same explosion is creating a demand for the building of more fulfillment centers. “The proportion of consumers who believe that receiving goods in three to four days constitutes ‘fast shipping’ fell to 35 percent in 2017, down from 42 percent in 2016 and 53 percent in 2015,” says a recent report published by the Urban Land Institute. That report, called the Emerging Trends in Real Estate 2019, notes that with increased consumer expectations of fast e-commerce delivery has come a need for new facilities vital to the new economy’s supply and demand chain. E-commerce fulfillment facilities represent approximately 20 percent of new leasing in industrial real estate, says the report, “with online sales generating three times the demand for warehouse/distribution space compared with in-store sales.” Large - and many times even massive - facilities that can satisfy what is known as the “final step” in the supply chain, are going up everywhere across the country, notes the report. “The economics of development have been incentivizing larger projects to a higher degree than ever before, with new supply consisting largely of big boxes,” the report adds. Such projects are typically being built in open spaces beyond urban cores where “large plots of land are more plentiful.” Perhaps not surprisingly, the Urban Land Institute rates highly such fulfillment center and warehouse projects, from both an investment and development perspective. Also at the top of the ULI’s investment/development list: senior housing, medical offices, and moderate-income workforce apartment projects. By Garry Boulard
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One of the busiest sections of one of the busiest interstates in the southwest is in need of widening and upgrading, say transportation experts. Interstate 10, as it pushes southward into El Paso before looping around the belly of the city and heading to the southeast, handles upwards of more than 100,000 vehicles a day. Officials with the Texas Department of Transportation estimate that, given current population trends in metro El Paso, the 55-mile segment of highway will easily see more than 300,000 vehicles daily two decades from now. For that reason, and because drivers have already been complaining about congestion issues, the state transportation department has been seeking public input on a plan called the I-10 Reimagine Corridor. Sweeping and visionary in its scope, the plan notes that every single one of the dozens and dozens of I-10 bridges in metro El Paso will eventually have to be rebuilt. DOT officials also say that highway standards now call for such bridges to have an 18-foot minimum clearance. All of the current interstate El Paso bridge clearances are no more than 16 feet. It has also been suggested that what is now a web of I-10 access ramps between the Texas and New Mexico border and the town of Tornillo could be reduced and made less confusing. The Reimagine Corridor proposal additionally proposes the $300 million building of a deck over the interstate connecting uptown and downtown El Paso. That deck could also be used as a park. Not surprisingly, public response so far exploring the major challenges facing the metro El Paso I-10 have singled out traffic congestion and connectivity. Once all of the public comments have been received and evaluated, the Texas DOT will ascertain how much funding is available for what could be a nearly $6 billion widening and upgrading project. It has been reported that if the funding for the project is secured, work on the corridor could begin as early as 2023. By Garry Boulard A project, that could eventually see the $200 million first phase construction of a spent nuclear fuel storage facility on 32 desert acres halfway between Carlsbad and Hobbs, has attracted the opposition of an array of environmental and nuclear watchdog groups. Now, members of the Atomic Safety and Licensing Board are tasked with trying to choose which of the groups, and their arguments, have standing when it comes to deciding whether or not the project should ultimately be approved. The licensing board is a unit of the Nuclear Regulatory Commission. The Camden, New Jersey-based Holtec International in early 2017 sent submission documentation to the commission asking for approval to store 500 canisters of spent nuclear fuel in what is described as an “interim storage facility.” Holtec, which specializes in the design and manufacture of parts for nuclear reactors, has noted that the facility would have a 40-year operating license, and that it would most likely end up spending around $80 million on just the licensing process itself. The project early on won the support of a number of southeast New Mexico public officials, as well as the Eddy-Lea County Energy Alliance. But a wide array of groups, such as the Alliance for Environmental Strategies, the Nuclear Issues Study Group, and the Sierra Club, have gone on record in opposition to the project. Those opponents have expressed concerns regarding the safety of the proposed facility itself, which over time would be capable of storing up to 173,000 metric tons of high-level waste, as well as the location of the rail routes used to transport the spent fuel. Holtec officials have emphasized the built-in safety features of the proposed facility, noting that the fuel will be kept in casts made of steel and lead and stored around 40 feet underground. The process by which the project will be either accepted or rejected is expected to be a lengthy affair, although a decision regarding which groups will be allowed to have their objections officially heard could be announced in either February or March. By Garry Boulard At least four out of five construction firms are expected to hire more workers this year, says a just-published job forecast survey. The survey of more than 1,300 construction companies nationally, conducted by the Associated General Contractors of Washington and the Atlanta-based Sage Construction and Real Estate, also reveals worries about hiring prospects. About 78 percent of respondents said their firms were currently having a difficult time filling positions, with 66 percent saying they expect it will remain hard throughout the rest of the year to find qualified workers. “Staffing changes are affecting project costs and completion times,” notes the 2019 Construction Hiring and Business Outlook Survey. “One third of respondents said costs were higher than expected, and a slightly higher share of firms are now putting higher prices into new bids and contracts.” The survey adds that many firms are adapting a variety of different strategies in response to the tight labor market: “Nearly 60 percent raised base pay rates, while many also increased or introduced incentives, bonuses, and benefit contributions.” Construction employment was up in 43 or the 50 states at the end of last year, according to December Department of Labor statistics, with more than 258,000 new openings filled in November. By Garry Boulard A nearly 50 year-old structure in the Capitol Hill section of Denver is slated to receive a significant upgrade and renovation later this spring. The structure at 777 Grant Street near the corner of 8th Avenue has for decades served as office space to a variety of public agencies and non-profits, including the Denver Housing Authority. In December the Denver-based LCP Development purchased the 66,000 square foot building for $9 million with plans to reconfigure much of its existing interior space. According to plans announced by LCP, which is primarily involved with infill development projects as well as property management, the six-story building will see the building out of first floor boardroom and conference room space. Ultimately, the first floor will end up with around 5,100 square feet of office space; 2,700 square feet of restaurant space; and 2,000 square feet of retail space. Plans also call for floor to ceiling glass walls on the south and north sides of the structure, with an expansion of all of the windows on the structure’s other two sides. Work on the project will not begin until the Denver Housing Authority has moved out of the building several months from now. By Garry Boulard A new housing project in Gallup, New Mexico, that could cost as much as $10 million to build and will be geared especially for veterans, is in the process of securing funding. The housing complex will also offer a variety of supportive services to its residents. The project, which could see the construction of up to 40 units, is being led by the Rehoboth McKinley Christian Health Care Services of Gallup and is expected to receive funding from a variety of sources. As currently planned, the units will measure around 500 to 600 square feet. Officials tasked with making the project become a reality have held a series of public input meetings in Gallup, explaining in particular the need to provide housing for both low-income veterans, as well as those who are classified as both homeless and disabled. The project is being done in conjunction with the City of Gallup as well as the Duluth, Minnesota-based LeBeau Development. LeBeau Development has been particularly involved with creating housing projects for homeless Native American veterans. Support for the project could come from gap funding through a Federal Home Loan Bank, as well as from New Mexico Mortgage Authority tax credits. Besides securing all of the needed funding, a move is additionally underway to find a suitable location for the new Gallup housing complex. The Rehoboth McKinley Christian Health Care Services is the product of an early 1980s merging between the Rehoboth Christian Hospital and the McKinley General Hospital. It is the primary hospital facility in both northwestern New Mexico as well as eastern Arizona. By Garry Boulard A Washington transit advocacy group is charging that the Trump Administration is purposely holding off on releasing more than $1.5 billion in funding for projects at the state level that have already been approved by Congress. In its Stuck in the Station report, the Transportation for America notes that in the last two years, Congress has authorized more than $2.3 billion in funding for transit projects to the U.S. Department of Transportation. That money was specifically designed to pay for the construction and expansion of transit systems in large, medium-sized, and small cities across the U.S. But, according to the report, while projects with a federal dollar investment of just over $782 million are now underway, those projects only represent “a small portion” of projects “that have been in the funding pipeline for years.” The remaining $1.5 billion in Congress-approved transit projects are still waiting to be authorized by the Department of Transportation. Continues the report: “Bulldozers and heavy machinery are sitting idle. Steel and other materials are getting more expensive by the day. Potential construction workers are waiting to hear about a job that should have materialized yesterday.” The report puts the blame for the delay in funding on the Trump Administration, which it charges has been less than enthused about transit projects to begin with. Noting that many of the projects only await a grant contract signature from Elaine Chao, the Secretary of Transportation, the report urges her to do so. Transportation for America represents business and civic leaders pushing for local solutions to transportation issues. Besides transit, the group is concerned with land use policy and smart growth matters. By Garry Boulard An El Paso school project that is expected to cost $28 million and will include both new construction and the demolition of an existing building may launch later this spring. Members of the El Paso Independent School District’s board of trustees have just voted to approve the consolidation of the existing Dowell Elementary School and Schuster Elementary School. At the same time, the board voted to close three other schools, all as part of a larger effort to better utilize space for a student enrollment that in recent decades has dropped from more than 60,000 students in 2015 to just over 58,000 last year. In announcing the school closures and consolidation project, board president Trent Hatch said, “We are taking this drastic step in order to guarantee the financial solvency of our district and the longterm wellbeing of our students.” The consolidation will see a new facility, to be named the Coach Archie Duran Elementary School, going up at the site of the current Dowell Elementary School at 5249 Bastille Avenue. Designed by the architectural firm of Vigil & Associations, which has offices in Las Cruces, the project will include the construction of a new 100,000 square foot structure, as well as the demolition of an existing and aged 42,000 square foot building. Money for the project is coming out of a $668 million bond approved by district voters in 2016. It is expected that work on the consolidation project will be completed by the late summer of 2021, in time for that year’s fall semester. By Garry Boulard Several years in the planning stage, a mixed-use highrise may at last become a reality on a downtown Tucson site that is currently a parking lot. Members of the Pima County Board of Supervisors have given their approval to a deal that will allow the Rio Nuevo tax increment finance district to lease the property, while working with a developer to get the project built. Once that construction is completed, Rio Nuevo will be able to purchase the property for an agreed-upon $2.7 million. As envisioned, the high rise at 75 East Broadway will house ground level entertainment, retail and restaurant space, with Class A office space on the upper floors. The building will also feature upper level glass walls, a 10th floor with an outdoor landscaped terrace, and a top floor offering 12,000 square feet of restaurant space. The real estate and investment firm CRBE Group, Inc. has been brought in as the leasing agent for the new property. If all goes as planned, work on the new high rise, in a part of the city populated with hotels and both older and newer offices buildings, will begin later this year. By Garry Boulard A drop in mortgage rates has spurred homebuilding confidence heading into 2019, says a new report issued by the Washington-based National Association of Home Builders. Using a monthly index with any responses above the number 50 categorized as positive, the homebuilders’ index today stands at 58. In a statement, Randy Noel, NAHB Chairman, acknowledged the influence of the lowered mortgage rates on homebuilder confidence, but added: “Low unemployment, solid job growth, and favorable demographics should support housing demand in the coming months.” The NAHB notes that home prices nationally are remaining steady, although an upward trend may not be entirely unexpected, as home sellers attempt to absorb the rising cost of both labor and materials. In specific sub categories, the NAHB additionally notes that buyer traffic has increased, along with current sales conditions, and sales expectations for the coming six months. Altogether, more than 876,000 residential units were built or under construction as of the end of 2018, up 3 percent over the final quarter of 2017. The NAHB is also reporting in that their Remodeling Market Index continues to show signs of strength, with the major additions and alterations market at 56; minor additions also at 56; and home repair and maintenance work at the 59 mark. As with the larger home building industry, remodelers say their greatest 2019 concerns are centered on the continued increase in building materials and labor costs. By Garry Boulard |
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