8/19/21 Hampton Roads Mastermind Group Meeting

Hampton Roads August 2021 – Key Take-Aways

• • • • Charles “Chuck” Rigney with City of Hampton Virginia said that “throughout COVID we have begun to realize that people have become just as – if not more – effective at home.”  The younger generation places a higher emphasis on work life balance than the older generation.
      • Worked with companies desiring 22K SF to start off and as the COVID situation continued they ended up tailoring down to about 9K SF.
      • The city of Hampton has been successful in securing deals because of the approach we take to the unsolicited proposal process.  Getting to ‘yes’ faster is important, but getting to a ‘no’ faster is really important.  Don’t put people in a “spin cycle”. If we are not going to make the deal, then we need to say no quickly.  We moved fast with securing Huntington Ingalls and Amazon.
      • Don Crigger with Colliers believes that despite the COVID-19 challenges and having to do things virtually, the market has surprisingly held steady.  “Over time, you must get everybody back in the room, even if it has to be done with a little bit of protocol.”
      • COVID-19 has truly affected company culture and increased attrition.  Although we are slowly getting back to conducting business face to face, several firms are being affected by having to work from home or virtually.
      • Don remains bullish on the future of office space and would not shy away from it.  Hearing a lot about the ‘hub and spoke’ model, where you have a main office and satellite offices.  Definitely seeing a move currently to the more suburban market, but the primary market will always remain appealing.
      • Chris Ambrosio with Vandeventer Black says that in the brokerage business you have to do site visits, you can only do so much from home.  You can review documents and lease agreements from home, but you must take clients physically to the property.
      • Drones play a role now, but in-person is still needed.  Eventually, when technology is good enough, we won’t even need an in-person signature to close homes or property.
      • Jeff Parker with Colliers is seeing a steady level of sales volume on retail the triple net lease, the net lease sector, grocery, and shopping centers across the board.  We handle Lyn Haven North which is the old Toys r Us and we are getting ready to launch to the market for sale.  We have had so much interest from people looking to purchase a value-add property like that. This applies to Hampton Roads and beyond.
      • Jeff added that on the leasing front we are seeing a lot of restaurants for example at Summit Point in Chesapeake, just signed a 10k square foot steak house, a chop house, an Italian restaurant that is expanding over from Norfolk.  We are seeing lots of staffing issues.  The Delta variant is putting a kink in a lot of decisions making as things are still taking painstaking long to complete.
      • Drew Ott with Colliers is seeing lots of uncertainty in the office market.  He has spent a lot of time talking with the decision makers trying to figure out the best next steps for their company and what their real office future will look like.  We have seen the full gamut, downsize, work from home, and then we have also seen in some unique cases where they would like more office space to evenly spread employees out to comply with social distancing.
      • Greg Schmitt with Kimley-Horn has seen a lot of growth on the retail side and quick serve restaurants.  You continue to see a lot of single and multifamily developments pop up as we are currently in a “housing crisis”.
      • Dan Shelton with Whiting-Turner says that the tough thing for them is we have a lot of essential workers that are required to be in the field.  So those that have been in the field the whole time have a different feeling towards those that have been out of the office.  “I definitely believe we need to get back to face to face.  Training over zoom call and teams is a nightmare.”
      • Pricing on lumber seems to be coming back down and seems to be accessible.  However, the price of steel is through the roof.  We are having to be very cautious on estimates due to the price of materials changing sporadically as well as availability.
      • As far as the market, healthcare seems to be doing well.  Also, a lot of warehousing deals are being talked about and being secured.
      • Keith Slattum with Dollar Bank has seen over the past few months, 100% of PPP loans forgiven.  A lot of your banks are extremely flush with cash now because the funding is coming in from the SBA to pay off these loans.  So now banks are looking to utilize those funds.
      • Materials affecting the business, he has seen several projects change or hold up due to the price of steel.  Also has seen some projects just not work at all because of the flux in price of steel.
      • Chris Crouch with RRMM Architects says that most of the deals we are seeing are multi family.  Not much has changed.  Quite a bit of self-storage and industrial.