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Universities Follow The Politics, Not The Science

Universities Follow The Politics, Not The Science

Authored by Daniel Nuccio via The Brownstone Institute,

At the start of 2022, both Rachel…

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Universities Follow The Politics, Not The Science

Authored by Daniel Nuccio via The Brownstone Institute,

At the start of 2022, both Rachel Fulton Brown, an associate professor of history at the University of Chicago, and Donald J. Boudreaux, an economics professor at George Mason University, fed up with the draconian dictats and bureaucratic overreach of their respective institutions, published letters openly calling out their universities for their intellectual and moral failures in how they responded to the Covid pandemic.

Fulton Brown’s letter to UChicago president, Paul Alivisatos, and provost, Ka Yee C. Lee, lamented her school’s failure to lead the charge against fashionable Covid mitigation policies, while exhorting the institution to change course, celebrate those who exhibited the courage to “stand for SCIENTIFIC INQUIRY over POLITICAL GRANDSTANDING,” and acknowledge they have “students intelligent enough to see through the gaslighting and fear to the real questions we should be asking about what it means to be a great school.”

Boudreaux’s memo to GMU president, Gregory Washington, highlighted the intellectual bankruptcy and logical inconsistencies of GMU’s then newly announced booster mandate, specifically addressing GMU’s failure to acknowledge natural immunity, the fact that Covid vaccination does not stop the spread of the virus, and that members of the GMU community still freely interacted with the unvaccinated and unboosted off-campus. 

By the time Fulton Brown and Boudreaux released their respective letters, both the University of Chicago and George Mason University had been operating with the standard suite of online classes, social restrictions, mask mandates, and vaccine requirements for nearly two years. Both schools justified their policies as being guided by science.

Teaching in the Pandemic Era: masked lectures under hot lights in empty auditoriums

In separate phone interviews, Fulton Brown and Boudreaux related some of their personal experiences teaching under these policies, and how they sometimes found themselves butting heads with administrators at their respective institutions.

At the University of Chicago, Fulton Brown, upon agreeing to teach in-person one semester, initially did so maskless. She was skeptical of the school’s mask policy to begin with. She found something cultish about the practice. She also found it difficult to effectively communicate in one when teaching in a “giant lecture hall” containing approximately eight people in an otherwise empty building. 

Furthermore, students generally found it difficult to understand her when she lectured in a mask in that setting. 

As one student, Declan Hurley, personally attested in an op-ed for one of UChicago’s student newspapers, The Chicago Thinker, this was especially true for those who were hearing-impaired.

Fulton Brown saw nothing dangerous about what she was doing. For practical reasons, it also made sense. But, before long, Fulton Brown was reprimanded. “The University of Chicago has a policy that people could report infractions,” she explained. “Someone saw me from the hallway and reported me and I got emails from both the dean of my division and the college.” 

Fulton Brown’s maskless attire got her called into the principal’s virtual office.

At George Mason University, Boudreaux, who taught online from the start of the pandemic through the end of the 2020-2021 school year, returned to in-person teaching in the summer of 2021, at which time the school did not require him to wear a mask. 

However, just before the start of the fall semester, GMU announced a mask mandate regardless of vaccination status. 

Given that he teaches large auditorium classes at night under hot stage lights for three hours straight, Boudreaux said, “The thought of teaching with a mask on was just unbearable.” Given that he also has high blood pressure, Boudreaux’s physician also thought it would be ill-advised.

Subsequently, Boudreax requested that GMU administrators let him take the risk as a fully vaccinated adult and teach without a mask. His request though was denied. 

Once more, Boudreaux found himself teaching online.

Navigating vaccine mandates and vaccine mandate backlash

Like many universities, both UChicago and GMU issued vaccine mandates in 2021. 

UChicago provost, Ka Yee C. Lee, and executive vice president, Katie Callow-Wright, claimed, “The University has determined based on expert guidance that widespread COVID-19 vaccination is the best way to contribute to greater immunity, reduce the likelihood of sudden clusters of COVID-19 on campus, minimize the risk imposed by new variants, and help protect members of our community who are at the highest risk of developing serious illness from the virus.”

GMU president, Gregory Washington stated, “Because we will come together as COVID-19 continues to circulate, we have an obligation to maintain a safe environment in which to study, work, and live.”

Both UChicago and GMU also weathered lawsuits over these decrees.

The former was sued by Fulton Brown and another plaintiff with the help of the Health Freedom Defense Fund to secure religious exemptions. 

As Jamie Green, a rep from the HFDF, explained in an email, “once we filed, the university was very open to discussions. The university backed down from enforcing the mandate on the plaintiffs.” 

However, Green said, UChicago “required a signature to statements with which the plaintiffs did not agree. What was being required was, in essence, compelled speech in order to obtain a religious exemption.”

Among other things, the statements pertained to the purported safety and effectiveness of the vaccines, and the dangers of Covid-19. 

Ultimately though, Green stated, “[T]he university allowed the plaintiffs to edit the statement as they wished and sign that.”

At the latter, GMU law professor Todd Zywicki and the New Civil Liberties Alliance successfully challenged GMU’s vaccine requirement, with the university settling before trial, granting him an exemption based on his personal medical history. The settlement, however, did not extend to anyone other than Todd Zywicki.

Both universities also eventually came to issue booster mandates

UChicago claimed, “[We] rely on consultation from experts from the University of Chicago Medicine, the City, and the Centers for Disease Control (CDC),” to justify their decision. 

GMU assured, “Public health experts have advised that vaccines are still the most effective tools to combat COVID-19.” 

Both ultimately incited even greater resistance.

Before long, Fulton Brown and Boudreaux released their respective letters.

The editorial team at The Chicago Thinker published a scathing op-ed which garnered national attention as it excoriated the university for forcing students to receive an “experimental vaccination” despite seemingly limited benefits and potential risks to students.

Boudreaux at GMU found himself fed up, saying “I just basically lost it. I’m not boosted. I had no interest in getting boosted. I don’t want to get boosted as a condition for keeping my job.”

Like Fulton Brown and his GMU colleague, Todd Zywicki, Boudreaux was ready to take his university to court. “I was all prepared to be a plaintiff to resist the booster mandate,” he said. 

A lawyer with the NCLA had offered to represent him, Boudreaux stated. 

However, before Boudreaux’s case could be brought to court, the issue became moot.

A divergence in policy: GMU reluctantly inches closer to normal while UChicago stays the course

The reason Boudreaux’s legal case became moot was because newly elected Virginia governor Glenn Youngkin signed an executive order prohibiting Covid vaccine requirements for state employees. 

Shortly thereafter, Virginia attorney general, Jason S. Miyares, issued a non-binding opinion stating, “Public institutions of higher education in Virginia may not require vaccination against Covid-19 as a general condition of students’ enrollment or in-person attendance.” 

Although nonbinding, it did effectively nullify the opinion of the previous attorney general, Mark R. Herring, which was supportive of such mandates. Hence it was sufficient to get several state universities in Virginia, including GMU, to rescind vaccine requirements for students.

Whatever GMU officials actually believed about the science backing their mandates and vaccines being “the most effective tools to combat COVID-19”, it would appear the politics of state leadership superseded all else.

UChicago, located in Illinois where Governor J. B. Pritzker issued an executive order in September 2021 requiring faculty and students at universities to be vaccinated for Covid or undergo weekly testing, still maintains its vaccine and booster mandates.

Whether the continuation of the policy is on account of expert guidance or the executive order remains unknown. What UChicago will do if and when this order is dropped remains uncertain.

In response to an email sent to President Paul Alivisatos of the University of Chicago regarding whether the school intended to maintain its vaccine and booster requirements into the Fall of 2022 and beyond, Gerald McSwiggan, the school’s associate director for public affairs, replied on March 8, “The University has made no announcements on COVID-19 policies for the 2022-23 academic year.”

Whatever UChicago decides to do, its reputation as a university of contrarian free thinkers has definitely taken another hit. 

As Hurley from The Chicago Thinker had previously declared with a headline, “In Ending Mandates, George Mason University Picks Up UChicago’s Forfeited Crown.”

Universities follow the politics, not the science

The imagery evoked by Hurley’s headline, although not without its appeal, may give too much credit to the administrators at GMU, however.

The trajectories of Covid policies at the University of Chicago and George Mason University are more similar than they are different. Furthermore, the paths they followed seem all too representative of how most universities responded to Covid.

They were quick to shut down. They imposed authoritarian policies on faculty and students when they reopened. They added additional restrictions when fashionable or mandated by local or state political leaders, with few exhibiting the courage to “stand for SCIENTIFIC INQUIRY over POLITICAL GRANDSTANDING,” or acknowledge they have “students intelligent enough to see through the gaslighting and fear to the real questions we should be asking.”

When restrictions were lifted, it was often only because they were nudged (or required) to do so by politicians – or when said politicians lifted their own orders upon realizing their policies might be costing them politicallyas was the case with masks at many schools, including UChicago and GMU.

Throughout the pandemic, many universities claimed some moral or intellectual high ground as they wrapped their decrees and their actions in the language of science and safety.

However, in reality, over the past two years many of these universities revealed themselves to be little more than political actors as intellectually bankrupt as they are morally corrupt.

Tyler Durden Wed, 03/23/2022 - 22:20

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The SNF Institute for Global Infectious Disease Research announces new advisory board

From identifying the influenza virus that caused the pandemic of 1918 to developing vaccines against pneumococcal pneumonia and bacterial meningitis in…

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From identifying the influenza virus that caused the pandemic of 1918 to developing vaccines against pneumococcal pneumonia and bacterial meningitis in the 1970s, combating infectious disease has a rich history at Rockefeller. That tradition continues as the Stavros Niarchos Foundation Institute for Global Infectious Disease Research at Rockefeller University (SNFiRU) caps a successful first year with the establishment of a new advisory board.

Credit: Lori Chertoff/The Rockefeller University

From identifying the influenza virus that caused the pandemic of 1918 to developing vaccines against pneumococcal pneumonia and bacterial meningitis in the 1970s, combating infectious disease has a rich history at Rockefeller. That tradition continues as the Stavros Niarchos Foundation Institute for Global Infectious Disease Research at Rockefeller University (SNFiRU) caps a successful first year with the establishment of a new advisory board.

This international advisory board was created in part to give guidance on how to best use SNFiRU’s resources, as well as bring forward innovative ideas concerning new avenues of research, public education, community engagement, and partnership projects.

SNFiRU was established to strengthen readiness for and response to future health crises, building on the scientific advances and international collaborations forged in the context of the COVID-19 pandemic. Launched with a $75 million grant from the Stavros Niarchos Foundation (SNF) as part of its Global Health Initiative (GHI), the institute provides a framework for international scientific collaboration to foster research innovations and turn them into practical health benefits.

SNFiRU’s mission is to better understand the agents that cause infectious disease and to lower barriers to treatment and prevention globally. To speed this work, the institute launched numerous initiatives in its inaugural year. For instance, SNFiRU awarded 31 research projects in 29 different Rockefeller laboratories for over $5 million to help get collaborative new research efforts off the ground. SNFiRU also supports the Rockefeller University Hospital, where clinical studies are conducted, and brought on board its first physician-scientist through Rockefeller’s Clinical Scholars program. “One of the surprises was the scope of interest from Rockefeller scientists in using their talents to tackle important infectious disease problems,” says Charles M. Rice, Maurice R. and Corinne P. Greenberg Professor in Virology at Rockefeller and director of SNFiRU. “The research topics range from the biology of infectious agents to the dynamics of the immune response to pathogens, and also include a number of infectious disease-adjacent studies.”

In the past 12 months, SNFiRU often brought together scientists studying different aspects of infectious disease as a way to spur new collaborations. In addition to hosting its first annual day-long symposium, SNFiRU initiated a Young Scientist Forum for students and post-doctoral fellows to meet regularly, facilitating cross-laboratory thinking. A bimonthly seminar series has also been established on campus.

Another aim of SNFiRU is to develop relationships with community-based organizations, as well as design and participate in community-engaged research, with a focus on low-income and minority communities. To that end, SNFiRU is helping develop a research project on Chagas disease, a tropical parasitic infection prevalent in Latin America that can cause congestive heart failure and gastrointestinal complications if left untreated. The project will bring together clinicians practicing at health centers in New York, Florida, Texas, and California and basic scientists from multiple institutions to help the communities that are most impacted.

“The SNFiRU international advisory board convenes globally recognized leaders with distinguished biomedical expertise, unrivalled experience in pandemic preparedness and response, and a shared commitment to translating scientific advancements into equitably distributed benefits in real-world settings,” says SNF Co-President Andreas Dracopoulos. “The advisory board will advance the institute’s indispensable mission, which SNF is proud to support as a key part of our Global Health Initiative, and we look forward to seeing breakthroughs in the lab drive better outcomes in lives around the globe.”

The new advisory board will hold its first meeting on April 11th, 2024, following the second annual SNF Institute for Global Infectious Disease Research Symposium at Rockefeller.

Its members are: Rafi Ahmed of Emory University School of Medicine, Cori Bargmann of The Rockefeller University, Yasmin Belkaid of the Pasteur Institute, Anthony S. Fauci, the former director of the National Institute of Allergy and Infectious Diseases, Peter Hotez of Baylor College of Medicine and Texas Children’s Hospital Center for Vaccine Development, Esper Kallas of of the Butantan Institute, Sharon Lewin of the University of Melbourne Doherty Institue, Carl Nathan of Weill Cornell Medicine, Rino Rappuoli of Fondazione Biotecnopolo di Siena and University of Siena, and Herbert “Skip” Virgin of Washington University School of Medicine and UT Southwestern Medical Center.


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Congress’ failure so far to deliver on promise of tens of billions in new research spending threatens America’s long-term economic competitiveness

A deal that avoided a shutdown also slashed spending for the National Science Foundation, putting it billions below a congressional target intended to…

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Science is again on the chopping block on Capitol Hill. AP Photo/Sait Serkan Gurbuz

Federal spending on fundamental scientific research is pivotal to America’s long-term economic competitiveness and growth. But less than two years after agreeing the U.S. needed to invest tens of billions of dollars more in basic research than it had been, Congress is already seriously scaling back its plans.

A package of funding bills recently passed by Congress and signed by President Joe Biden on March 9, 2024, cuts the current fiscal year budget for the National Science Foundation, America’s premier basic science research agency, by over 8% relative to last year. That puts the NSF’s current allocation US$6.6 billion below targets Congress set in 2022.

And the president’s budget blueprint for the next fiscal year, released on March 11, doesn’t look much better. Even assuming his request for the NSF is fully funded, it would still, based on my calculations, leave the agency a total of $15 billion behind the plan Congress laid out to help the U.S. keep up with countries such as China that are rapidly increasing their science budgets.

I am a sociologist who studies how research universities contribute to the public good. I’m also the executive director of the Institute for Research on Innovation and Science, a national university consortium whose members share data that helps us understand, explain and work to amplify those benefits.

Our data shows how underfunding basic research, especially in high-priority areas, poses a real threat to the United States’ role as a leader in critical technology areas, forestalls innovation and makes it harder to recruit the skilled workers that high-tech companies need to succeed.

A promised investment

Less than two years ago, in August 2022, university researchers like me had reason to celebrate.

Congress had just passed the bipartisan CHIPS and Science Act. The science part of the law promised one of the biggest federal investments in the National Science Foundation in its 74-year history.

The CHIPS act authorized US$81 billion for the agency, promised to double its budget by 2027 and directed it to “address societal, national, and geostrategic challenges for the benefit of all Americans” by investing in research.

But there was one very big snag. The money still has to be appropriated by Congress every year. Lawmakers haven’t been good at doing that recently. As lawmakers struggle to keep the lights on, fundamental research is quickly becoming a casualty of political dysfunction.

Research’s critical impact

That’s bad because fundamental research matters in more ways than you might expect.

For instance, the basic discoveries that made the COVID-19 vaccine possible stretch back to the early 1960s. Such research investments contribute to the health, wealth and well-being of society, support jobs and regional economies and are vital to the U.S. economy and national security.

Lagging research investment will hurt U.S. leadership in critical technologies such as artificial intelligence, advanced communications, clean energy and biotechnology. Less support means less new research work gets done, fewer new researchers are trained and important new discoveries are made elsewhere.

But disrupting federal research funding also directly affects people’s jobs, lives and the economy.

Businesses nationwide thrive by selling the goods and services – everything from pipettes and biological specimens to notebooks and plane tickets – that are necessary for research. Those vendors include high-tech startups, manufacturers, contractors and even Main Street businesses like your local hardware store. They employ your neighbors and friends and contribute to the economic health of your hometown and the nation.

Nearly a third of the $10 billion in federal research funds that 26 of the universities in our consortium used in 2022 directly supported U.S. employers, including:

  • A Detroit welding shop that sells gases many labs use in experiments funded by the National Institutes of Health, National Science Foundation, Department of Defense and Department of Energy.

  • A Dallas-based construction company that is building an advanced vaccine and drug development facility paid for by the Department of Health and Human Services.

  • More than a dozen Utah businesses, including surveyors, engineers and construction and trucking companies, working on a Department of Energy project to develop breakthroughs in geothermal energy.

When Congress shortchanges basic research, it also damages businesses like these and people you might not usually associate with academic science and engineering. Construction and manufacturing companies earn more than $2 billion each year from federally funded research done by our consortium’s members.

A lag or cut in federal research funding would harm U.S. competitiveness in critical advanced technologies such as artificial intelligence and robotics. Hispanolistic/E+ via Getty Images

Jobs and innovation

Disrupting or decreasing research funding also slows the flow of STEM – science, technology, engineering and math – talent from universities to American businesses. Highly trained people are essential to corporate innovation and to U.S. leadership in key fields, such as AI, where companies depend on hiring to secure research expertise.

In 2022, federal research grants paid wages for about 122,500 people at universities that shared data with my institute. More than half of them were students or trainees. Our data shows that they go on to many types of jobs but are particularly important for leading tech companies such as Google, Amazon, Apple, Facebook and Intel.

That same data lets me estimate that over 300,000 people who worked at U.S. universities in 2022 were paid by federal research funds. Threats to federal research investments put academic jobs at risk. They also hurt private sector innovation because even the most successful companies need to hire people with expert research skills. Most people learn those skills by working on university research projects, and most of those projects are federally funded.

High stakes

If Congress doesn’t move to fund fundamental science research to meet CHIPS and Science Act targets – and make up for the $11.6 billion it’s already behind schedule – the long-term consequences for American competitiveness could be serious.

Over time, companies would see fewer skilled job candidates, and academic and corporate researchers would produce fewer discoveries. Fewer high-tech startups would mean slower economic growth. America would become less competitive in the age of AI. This would turn one of the fears that led lawmakers to pass the CHIPS and Science Act into a reality.

Ultimately, it’s up to lawmakers to decide whether to fulfill their promise to invest more in the research that supports jobs across the economy and in American innovation, competitiveness and economic growth. So far, that promise is looking pretty fragile.

This is an updated version of an article originally published on Jan. 16, 2024.

Jason Owen-Smith receives research support from the National Science Foundation, the National Institutes of Health, the Alfred P. Sloan Foundation and Wellcome Leap.

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What’s Driving Industrial Development in the Southwest U.S.

The post-COVID-19 pandemic pipeline, supply imbalances, investment and construction challenges: these are just a few of the topics address by a powerhouse…

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The post-COVID-19 pandemic pipeline, supply imbalances, investment and construction challenges: these are just a few of the topics address by a powerhouse panel of executives in industrial real estate this week at NAIOP’s I.CON West in Long Beach, California. Led by Dawn McCombs, principal and Denver lead industrial specialist for Avison Young, the panel tackled some of the biggest issues facing the sector in the Western U.S. 

Starting with the pandemic in 2020 and continuing through 2022, McCombs said, the industrial sector experienced a huge surge in demand, resulting in historic vacancies, rent growth and record deliveries. Operating fundamentals began to normalize in 2023 and construction starts declined, certainly impacting vacancy and absorption moving forward.  

“Development starts dropped by 65% year-over-year across the U.S. last year. In Q4, we were down 25% from pre-COVID norms,” began Megan Creecy-Herman, president, U.S. West Region, Prologis, noting that all of that is setting us up to see an improvement of fundamentals in the market. “U.S. vacancy ended 2023 at about 5%, which is very healthy.” 

Vacancies are expected to grow in Q1 and Q2, peaking mid-year at around 7%. Creecy-Herman expects to see an increase in absorption as customers begin to have confidence in the economy, and everyone gets some certainty on what the Fed does with interest rates. 

“It’s an interesting dynamic to see such a great increase in rents, which have almost doubled in some markets,” said Reon Roski, CEO, Majestic Realty Co. “It’s healthy to see a slowing down… before [rents] go back up.” 

Pre-pandemic, a lot of markets were used to 4-5% vacancy, said Brooke Birtcher Gustafson, fifth-generation president of Birtcher Development. “Everyone was a little tepid about where things are headed with a mediocre outlook for 2024, but much of this is normalizing in the Southwest markets.”  

McCombs asked the panel where their companies found themselves in the construction pipeline when the Fed raised rates in 2022.   

In Salt Lake City, said Angela Eldredge, chief operations officer at Price Real Estate, there is a typical 12-18-month lead time on construction materials. “As rates started to rise in 2022, lots of permits had already been pulled and construction starts were beginning, so those project deliveries were in fall 2023. [The slowdown] was good for our market because it kept rates high, vacancies lower and helped normalize the market to a healthy pace.” 

A supply imbalance can stress any market, and Gustafson joked that the current imbalance reminded her of a favorite quote from the movie Super Troopers: “Desperation is a stinky cologne.” “We’re all still a little crazed where this imbalance has put us, but for the patient investor and owner, there will be a rebalancing and opportunity for the good quality real estate to pass the sniff test,” she said.  

At Bircher, Gustafson said that mid-pandemic, there were predictions that one billion square feet of new product would be required to meet tenant demand, e-commerce growth and safety stock. That transition opened a great opportunity for investors to run at the goal. “In California, the entitlement process is lengthy, around 24-36 months to get from the start of an acquisition to the completion of a building,” she said. Fast forward to 2023-2024, a lot of what is being delivered in 2024 is the result of that chase.  

“Being an optimistic developer, there is good news. The supply imbalance helped normalize what was an unsustainable surge in rents and land values,” she said. “It allowed corporate heads of real estate to proactively evaluate growth opportunities, opened the door for contrarian investors to land bank as values drop, and provided tenants with options as there is more product. Investment goals and strategies have shifted, and that’s created opportunity for buyers.” 

“Developers only know how to run and develop as much as we can,” said Roski. “There are certain times in cycles that we are forced to slow down, which is a good thing. In the last few years, Majestic has delivered 12-14 million square feet, and this year we are developing 6-8 million square feet. It’s all part of the cycle.”  

Creecy-Herman noted that compared to the other asset classes and opportunities out there, including office and multifamily, industrial remains much more attractive for investment. “That was absolutely one of the things that underpinned the amount of investment we saw in a relatively short time period,” she said.  

Market rent growth across Los Angeles, Inland Empire and Orange County moved up more than 100% in a 24-month period. That created opportunities for landlords to flexible as they’re filling up their buildings. “Normalizing can be uncomfortable especially after that kind of historic high, but at the same time it’s setting us up for strong years ahead,” she said. 

Issues that owners and landlords are facing with not as much movement in the market is driving a change in strategy, noted Gustafson. “Comps are all over the place,” she said. “You have to dive deep into every single deal that is done to understand it and how investment strategies are changing.” 

Tenants experienced a variety of challenges in the pandemic years, from supply chain to labor shortages on the negative side, to increased demand for products on the positive, McCombs noted.  

“Prologis has about 6,700 customers around the world, from small to large, and the universal lesson [from the pandemic] is taking a more conservative posture on inventories,” Creecy-Herman said. “Customers are beefing up inventories, and that conservatism in the supply chain is a lesson learned that’s going to stick with us for a long time.” She noted that the company has plenty of clients who want to take more space but are waiting on more certainty from the broader economy.  

“E-commerce grew by 8% last year, and we think that’s going to accelerate to 10% this year. This is still less than 25% of all retail sales, so the acceleration we’re going to see in e-commerce… is going to drive the business forward for a long time,” she said. 

Roski noted that customers continually re-evaluate their warehouse locations, expanding during the pandemic and now consolidating but staying within one delivery day of vast consumer bases.  

“This is a generational change,” said Creecy-Herman. “Millions of young consumers have one-day delivery as a baseline for their shopping experience. Think of what this means for our business long term to help our customers meet these expectations.” 

McCombs asked the panelists what kind of leasing activity they are experiencing as a return to normalcy is expected in 2024. 

“During the pandemic, shifts in the ports and supply chain created a build up along the Mexican border,” said Roski, noting border towns’ importance to increased manufacturing in Mexico. A shift of populations out of California and into Arizona, Nevada, Texas and Florida have resulted in an expansion of warehouses in those markets. 

Eldridge said that Salt Lake City’s “sweet spot” is 100-200 million square feet, noting that the market is best described as a mid-box distribution hub that is close to California and Midwest markets. “Our location opens up the entire U.S. to our market, and it’s continuing to grow,” she said.   

The recent supply chain and West Coast port clogs prompted significant investment in nearshoring and port improvements. “Ports are always changing,” said Roski, listing a looming strike at East Coast ports, challenges with pirates in the Suez Canal, and water issues in the Panama Canal. “Companies used to fix on one port and that’s where they’d bring in their imports, but now see they need to be [bring product] in a couple of places.” 

“Laredo, [Texas,] is one of the largest ports in the U.S., and there’s no water. It’s trucks coming across the border. Companies have learned to be nimble and not focused on one area,” she said. 

“All of the markets in the southwest are becoming more interconnected and interdependent than they were previously,” Creecy-Herman said. “In Southern California, there are 10 markets within 500 miles with over 25 million consumers who spend, on average, 10% more than typical U.S. consumers.” Combined with the port complex, those fundamentals aren’t changing. Creecy-Herman noted that it’s less of a California exodus than it is a complementary strategy where customers are taking space in other markets as they grow. In the last 10 years, she noted there has been significant maturation of markets such as Las Vegas and Phoenix. As they’ve become more diversified, customers want to have a presence there. 

In the last decade, Gustafson said, the consumer base has shifted. Tenants continue to change strategies to adapt, such as hub-and-spoke approaches.  From an investment perspective, she said that strategies change weekly in response to market dynamics that are unprecedented.  

McCombs said that construction challenges and utility constraints have been compounded by increased demand for water and power. 

“Those are big issues from the beginning when we’re deciding on whether to buy the dirt, and another decision during construction,” Roski said. “In some markets, we order transformers more than a year before they are needed. Otherwise, the time comes [to use them] and we can’t get them. It’s a new dynamic of how leases are structured because it’s something that’s out of our control.” She noted that it’s becoming a bigger issue with electrification of cars, trucks and real estate, and the U.S. power grid is not prepared to handle it.  

Salt Lake City’s land constraints play a role in site selection, said Eldridge. “Land values of areas near water are skyrocketing.” 

The panelists agreed that a favorable outlook is ahead for 2024, and today’s rebalancing will drive a healthy industry in the future as demand and rates return to normalized levels, creating opportunities for investors, developers and tenants.  


This post is brought to you by JLL, the social media and conference blog sponsor of NAIOP’s I.CON West 2024. Learn more about JLL at www.us.jll.com or www.jll.ca.

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