NAIOP Maryland’s New President John Hermann Discusses Plans in His New Role

Hermann spoke with Commercial Observer about his new role and how the organization serves as an advocate for commercial real estate interests in Maryland.

What does it mean to you to be NAIOP Maryland president?

It’s both a tremendous honor and a challenge. I have a lot of respect for those that have preceded me in this position and the responsibility is one I don’t take lightly. When the opportunity to become president of this association was first presented, I was initially reluctant to accept because I considered myself moderately apolitical, particularly at the state level, and that gave me reservations about my experience and qualifications. But Vince Bagli, a former president and long-time executive with NAIOP Maryland, helped me realize that I would not be going it alone and reminded me of the great resources available to the person holding the president’s gavel. From our directors, committee chairs and volunteers to the talented and dedicated staff, NAIOP has a deep bench, using Vince’s sports analogy.  

What are your main goals in the position?

When I think about the value proposition afforded to NAIOP partners and members, I think first and foremost about the tremendous work we do to oppose legislation that is potentially harmful to stakeholders in the Maryland commercial real estate industry. This work is equal parts art and science, requiring expertise in many disciplines because our industry plays such an integral role in the success of the economy. Many of the challenges we face require data and analysis from external resources and partnerships, which I would like to expand. We are frequently tackling extremely complex issues, and [going] up against other interest groups with greater resources at their disposal. I believe NAIOP’s ability to educate and influence is fundamental in shaping legislation that is not harmful to commercial real estate — that is the art. We additionally need the science to support that approach.

What are some of your first initiatives and accomplishments in the role?

NAIOP Maryland has been operating like a well-oiled machine for many years now, so part of me wants to say “just stay out of the way to keep the good times going.” But, in reality, the health care crisis has presented some unfortunate bumps in the road, particularly in our event programming, and it is important to reinstitute our schedule in that regard. Thankfully, our members and partners have stood by our side over the past two years and it is now time to repay them with an increased level of programs and services. Part of that reciprocation may come through an educational component that provides career-advancement resources to our members, a job bank or an activity that partners with students taking real estate curriculum at local universities and high schools. Among our most important challenges is recruiting new talent into our industry, improving its diversity and providing opportunities to persons across all socio-economic levels.             

What are some important issues that the organization is dealing with this spring?

Some of the climate legislation that is proposed will have far-reaching implications [but lacks] a clear path to implementation. Both the House and Senate are proposing legislation that will end the use of gas-fired heat and hot water in all new commercial buildings beginning in 2024. It will also place mandates on all existing buildings over 25,000 square feet to reduce carbon emissions ahead of earlier state goals that were already considered as ambitious. Maryland has been making great strides towards carbon reduction goals, having achieved a 38 percent reduction in building emissions between 2005 and 2017. NAIOP recognizes the importance of reducing greenhouse gas emissions and we support a thoughtful approach to net zero goals. 

How would you characterize the real estate industry in early 2022? What are you seeing?

The health care crisis remains an ongoing threat to the office sector, but I believe when we finally put it behind us, most companies will land back in the office in some form. Companies across all industry sectors recognize that a remote work model is not conducive to team building, collaboration, career development and maintaining corporate culture. The office is at the center of fostering those things, so we see business owners placing more emphasis on amenities and activities that attract employees to the office environment, as well as implementing protocols that instill confidence in the safety of indoor environments.  

Despite the challenges over the past two years, the United States economy has been extremely resilient, with many companies remaining in growth mode. The combination of low interest rates and government stimulus has befitted many industries, including real estate. After several delays, we are finally seeing employees return to traditional workplaces in large numbers and am confident that activity in our larger cities can return to pre-pandemic levels. This is an important component to the complete commercial real estate recovery.

What are some of the biggest challenges and what can the association do to help?

NAIOP speaks as one voice before legislators in Annapolis to better explain our position on the environment and to demonstrate our role in creating economic development opportunities, providing room for new jobs and improving the lifestyle of the general public. Our group enables owners with like-minded interests to band together and pool resources and work toward a common goal.

Keith Loria can be reached at Kloria@commercialobserver.com.