2020 13th Edition: August 31st - September 3rd
Energy Cost and Diversity are Critical for
Region's Future Growth

Energy is a critical component of any business operation. According to the National Association of Manufacturers, the US manufacturing sector consumes one-third of all energy in the country. Orange County Partnership knows that businesses seeking to expand or relocate in the region need reliable and affordable energy. That’s why it is so important that our members understand what is happening with energy policy in New York State. 
In 2019, New York State passed the Climate Leadership and Community Protection Act (CLCPA) to transition to emission-free energy sources and away from low carbon, affordable fuels like natural gas. This legislation could have wide-spread effects on the cost and reliability of our energy. Already, climate policies enacted in New York from 2006 through 2025 add more than $20 billion to electric bills statewide. After 15 years and $8 billion in investment, NYS has only increased wind and solar to 5% of total generation production statewide–far short of the 70% renewable generation that CLCPA mandates by 2030. New initiatives, such as off-shore wind and battery storage, have the potential to double these costs. This could translate to fewer businesses willing to set up shop in New York due to increased overhead costs. 
We must advocate for policies that allow for an economically viable transition that continues to support business development. While we can all support the development of clean energy resources, it cannot be supported at any cost as many supporters of CLCPA have urged. Reliability cannot be breached and affordability cannot be ignored. The aspirational goals of the CLCPA cannot change the fact that in order to avoid the blackouts experienced in places like California, the state will continue to need fuel diversity to promote reliability and ensure affordability. In New York the issue of fuel diversity will be even more pressing as Indian Point is shut down in 2021. To that end the Partnership is working to fight for improved local energy infrastructure and energy projects that will improve the efficiency of our local power generators and lead to lower cost power for our members. For example, the proposed $500-million privately financed Danskammer plant upgrade will generate an affordable, clean source of locally produced energy while also providing employment opportunities to our citizens and helping to stimulate our economy.
We should move toward a cleaner, lower-emission future, but not at the expense of our economic well-being. It is essential that the business community speak with one voice to advocate for sensible energy policy that will support long term economic growth here in the mid-Hudson Valley.
Recently, Mike Lawler, Director of the NY Energy Coalition, published an article that was printed in The Journal News, (lohud.com), the Westchester County Business Journal and Gannett papers throughout the state. It’s worth the read: 

My very best,

Maureen Halahan
President & CEO

COVID-19 Impacts Will Be Felt for Years
Recently, Kevin Thorpe, chief economist with commercial brokerage firm Cushman & Wakefield, offered his thoughts and insights on the impacts of the coronavirus on the U.S. and world economies and the real estate market.

In total, Thorpe’s forecast was a mixed bag, with a rather sobering review of COVID-19’s impact on the economy and a realistic outlook of how long it will take for the real estate markets and the economy to return to post pandemic levels.

Report: COVID-19 is an ‘Accelerator’ for Logistics RE and Cold Storage Growth
The global coronavirus pandemic has accelerated demand for infill logistics space and cold storage facilities, according to a recent report by Elion Partners, a Miami-based real estate investment and advisory firm.

With the logistics sector already strong at the onset of COVID-19 in March and the lockdowns that ensued to prevent the spread of the virus, the need for supply chain resiliency and accelerated demand for cold storage and infill logistics space, Elion stated in the report.

U.S. Data Center Market Showing Resiliency and Investor Interest Despite Pandemic
Commercial brokerage firm CBRE issued a report on Aug. 27 that detailed the strength and resiliency of the U.S. Data Center market, which has been bolstered by the need for business continuity as well as the increase in remote working and content streaming due to COVID-19.

The CBRE Data Center Trends Report noted that the North American data center sector was strong in the first half of 2020 as many businesses implemented hybrid IT infrastructure to improve their remote work capabilities and streaming content providers saw increased viewership due to the COVID-19 pandemic.

Commercial Lending Volume Declines Due to COVID; Multifamily and Industrial Sectors are Bright Spots
Several recently released reports on the state of commercial lending indicate a steep drop in 2020 thus far, due in large part to the temporary freeze in deals during the early days of COVID-19. Lending volume has increased of late, despite underwriters being more conservative in their lending decisions.

Commercial brokerage firm CBRE recently released its Lending Momentum Index, which reached a value of 194 in June, a 29.3% decline from the first quarter of this year and 20.5% lower than the second quarter of last year.

COVID Pandemic Causes Drastic Decline in Foreign Investment in U.S. Real Estate
Commercial brokerage firm CBRE released a report on Aug. 27 on the levels of U.S. Inbound & Outbound Investment Trends for the first half of 2020 that clearly showed the deep impact the worldwide coronavirus pandemic had on foreign investment in U.S. real estate.

Inbound (foreign) capital declined 34% in the first half of this year as global lockdown measures mainly imposed at the end of the first quarter and throughout the second quarter caused market uncertainty. The global outbreak of COVID-19 caused inbound capital for U.S. real estate to decline by 70% in the second quarter.

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