The Weekly Take from CBRE

With the U.S.’s fourth-strongest labor market and massive live-work-play appeal, Tampa, Florida is one of the country's hottest real estate markets according to a recent Wall Street Journal analysis,  Tampa investor/developer Darryl Shaw and CBRE’s Mike DiBlasi explain how the city has become a magnet for institutional capital, expanding employers and top talent and what other mid-size markets can learn from it.Insights: Developers who want to build in culturally important areas need strong partnerships with the local community leaders and municipal government.Tampa’s historic Casa Ybor development demonstrates what’s possible when a long-term vision is coupled with consistent population growth.Tampa is experiencing a surge of development across commercial real estate sectors as a result of public-private investment in their downtown waterfront.

In a wide-ranging discussion, RXR CEO Scott Rechler opines on everything from the future of cities to leveraging AI in decision-making to office-to-multifamily conversions.Insights to Share: ·      Commercial real estate investors can find opportunity in a higher-cost environment.·      The outlook for office is brightest in areas where talent wants to live, work and play.·      RXR uses market intelligence combined with data to inform their strategies. Key data sources include VTS, cell phone activity, AI and predictive analytics.

“What Do You Want to Do Before You Die?” asks celebrity author Ben Nemtin in his best-selling book of 100 bucket list items. Ben shares thoughts on finding your purpose, protecting your mental health and achieving your most ambitious goals.Insights to Share: ·      Overcome fear. People who avoid taking risks because they are afraid to fail can often fall short of their goals. Empowering people to be their true selves is a critical component of a strong work culture.·      Set ambitious goals. People who set ambitious goals for themselves are more likely to be successful in careers and life.·      Take action. It is not enough to simply set goals; people need to act on them. Small steps forward create positive momentum.

Real estate investment markets are stirring after an extended pause, and capital may be ready to come off the sidelines. KKR’s Roger Morales and CBRE’s Kevin Aussef share insights on what assets, strategies and markets stand to benefit from an expected pick up in commercial real estate activity later this year.Real estate investment markets are stirring after an extended pause, and capital may be ready to come off the sidelines. KKR’s Roger Morales and CBRE’s Kevin Aussef share insights on what assets, strategies and markets stand to benefit from an expected pick up in commercial real estate activity later this year.

 Student housing has become a darling of the multifamily asset class. Real estate investor Brian Dinerstein and CBRE’s Jaclyn Fitts explain how the sector has bounced back from pandemic-era challenges and offers enticing opportunities for investors.Insights to Share: Student housing has been better insulated against rising interest rates than conventional multifamily housing.Large public colleges and universities provide the best environment for institutional grade multifamily student housing.Student housing now is a much different product than what was developed two decades ago.

Growth strategist Rebecca Homkes delivers insights and ideas for companies navigating a challenging economic landscape. With wit and real-world examples, she challenges leaders to think of uncertainty as a neutral and temporary state – and where that line of thinking can lead.Insights to Share: ·      Survive, Reset, Thrive is a playbook for fortifying companies through times of change and challenge.·      Market uncertainty is neither good nor bad. It is a neutral fact to be dealt with.·      Companies who are willing to think creativelyare more likely to emerge from challenges successfully.

What’s the best way to prepare for a thriving commercial real estate career today and in the future? Leaders of real estate programs at the University of North Carolina, Ohio State and Clemson enlighten us.Key Takeaways: • Learn to be resilient and flexible. • Interdisciplinary approaches provide a broad real estate education. • There is a history of collaboration between higher education systems and the commercial real estate industry. • Experiential learning is an effective way to build skillsets. You’ve got to do the thing!This Episode's GuestsDustin Read, Ph.D.Director, Master of Real Estate Development Program, Clemson UniversityDustin leads the Master of Real Estate Development Program at Clemson University. Previously, he was involved in leadership in the real estate programs at Virginia Tech and the University of North Carolina at Charlotte. Some of his research interests include affordable housing, land use policy, and public-private partnerships. Dr. Read is a NAIOP Research Foundation Distinguished Fellow, an inductee into the Institute of Real Estate Management’s Academy of Authors, and a seven-time recipient of honors from the American Real Estate Society for his contributions to real estate theory and practice.Donald D. SheetsExecutive Director, The Ohio State University Center for Real EstateDonald has over two dozen years of leadership experience on Wall Street across several investment management firms, one of which he founded nearly a decade ago and recently sold. In addition to leading the Center for Real Estate at The Ohio State University, he also is on the faculty at Harvard University and serves as Chair of the Harvard Alumni Real Estate Board. His predecessor faculty appointments were at Columbia University, New York University and Auburn University.Jeff TuckerExecutive Director, Wood Center for Real Estate Studies, University of North Carolina Kenan-Flagler Business SchoolJeff is new to his role leading the real estate program at the University of North Carolina, having started in mid-2023. Tucker has more than 20 years of experience in private equity, with the last 16 focused on real estate. He most recently served as co-chairman and CEO of Century Bridge Capital, a firm based in Beijing and Dallas that is focused on middle-class residential developments in China.

Deepki CEO Vincent Bryant and CBRE’s Emma Buckland share insights on how data analytics helps property owners attract tenants, meet sustainability goals and enhance asset values.Insights to Share: Property management data has become much more standardized and transparent in the last ten years.CBRE’s strategic partnership with Deepki helps property management teams support investors’ sustainability goals.Meeting sustainability objectives can strengthen asset value and is strategically smart amid the growth of regulations.

Despite widespread adoption elsewhere in the world, modular construction has been slow to take hold in the U.S. Assembly OSM CEO Andrew Staniforth makes a compelling case for the construction technique’s affordability, sustainability and speed—as well as reasons why the practice is still in its infancy domestically.Insights to Share: Modular construction is an option that provides a compelling combination of affordability, sustainability and speed.A tight labor market and strong real estate fundamentals make modular construction more viable.Affordable housing is a challenge that will require non-traditional thinking—like modular construction—to solve. “Naturally occurring affordable housing is just an Econ 101 problem like supply and demand. The more housing that you build, it will lower the price. And I think as we start getting to scale, we hope to be able to move the market.”Andrew StaniforthCEOAssembly OSM

One’s an office occupier—Orrick’s Laura Saklad—and the other’s an office investor—CBRE Investment Management’s Julie Ingersoll. From opposite sides of the table, they discuss how property investors and occupiers can work together to facilitate return-to-office strategies and make the workplace a magnet for talent attraction and retention.Insights to Share:·      Successful office occupancy strategies are about balancing employee flexibility with collaboration and professional development opportunities.·      The surrounding neighborhood is an important amenity for office space.·      The pandemic has brought landlords and tenants closer together, changing the relationship from adversarial to a partnership.Laura SakladChief Operations OfficerOrrickLaura is responsible for leading and directing all operational functions of Orrick, a law firm with more than 25 global offices. She works closely with the Orrick’s Board and Management Committee to execute the firm’s strategy. Julie IngersollChief Investment OfficerAmericas Direct Real Estate StrategiesCBRE Investment ManagementJulie joined the firm in October 2021 from CPP Investments, an approximately $500 billion Canadian Pension Plan, where she was Managing Director overseeing portfolio strategy design and execution for 50 million square feet of U.S. residential and retail investments. At CPP, Julie focused on core-plus, value-add and development risk profiles, leading efforts across the investment lifecycle from identifying new strategies, originating and structuring joint ventures, acquisitions, asset management and dispositions.

What commercial real estate stories will make headlines this year? Diana Olick knows. The CNBC reporter talks interest rates, work from the office, the future of cities, climate strategies and more.Insights from CNBC’s Diana Olick: One solution to the housing affordability crisis is the addition of supply at scale.Trends in climate and real estate are interwoven.For many people, renting a home makes more financial sense than purchasing.Some employees enjoy the dynamic energy of working in the office, much like the vitality of living in the city. The successful office investor will design workspaces to encourage collaborative productivity.

What will the future office look like? Ask an interior designer. ThinkLab’s Amanda Schneider offers insights on how organizations can use design to support everything from hybrid work strategies to employee health and safety and from sustainability to portfolio optimization.Insights to Share: Hybrid work has brought interior design innovation to the forefront of conversations around productivity and the value of the office.Many organizations are seeking intelligent ways to incorporate technology into the workplace design, and even their furniture, to measure their occupancy and effectiveness.People do not want to come into the office and do the same work they do at home, so office design must account for changed workplace uses.

CEOs of The Office Group and Industrious discuss the flex space office market in the wake of WeWork’s high-profile bankruptcy.Insights to Share: Despite recent headlines, the future of flex office is bright.Flex office space within the building stack can enhance asset value.Collaboration spaces and individual private spaces, like pods or booths, have gained favor among flex-office occupiers. Large, open floorplans with rows of desks have drawn less interest.

U.S. Air Force veteran and consultant DeDe Halfhill discusses effective leadership qualities, debunks management myths and shares tactics for team-building and improving productivity.Insights to Share from DeDe Halfhill: ·      Creating a culture of open feedback is incredibly important for those in leaderships roles but often hard to achieve given the power differential with subordinates.·      Empathy is critical to good leadership.·      The effective integration of diversity is a critical skill for future leaders.

With many commercial real estate investors in a wait-and-see mode, Rob Finlay, author and founder of Thirty Capital, expounds on opportunities to create value using data analytics to optimize property performance.Insights to Share from Rob Finlay: 1. Waiting for rates to drop is not a good strategy for real estate investors. Instead, they should focus on managing their assets and debt effectively. 2. Innovation will be a key to success in an environment featuring sustained higher interest rates. 3. Both human intelligence and Artificial Intelligence play a role in helping investors to understand—and meet—market needs.

In a bonus episode from our 2024 Outlook, Chief Economists Jim Costello (MSCI Real Assets) and Richard Barkham (CBRE) respond to live audience questions about the 2024 commercial real estate outlook.

Our annual must-listen episode. Chief Economists Jim Costello (MSCI Real Assets) and Richard Barkham (CBRE) share their predictions for the global economy, interest rates, capital markets and investment opportunities across commercial real estate sectors.THIS WEEK'S GUESTSRichard BarkhamGlobal Chief Economist, Head of Global Research & Head of Americas Research, CBRERichard Barkham leads a global team of nearly 600 research experts who help CBRE’s clients understand the forces shaping the commercial real estate industry. One of the world’s leading real estate economists, Richard combines the theoretical framework of an academic with hands-on experience in development to deliver actionable insights for real estate investors and occupiers. A frequent source for both clients and journalists navigating moments of economic volatility, he is particularly interested in the role government stimulus plays in long-term economic recoveries.Jim Costello Executive Director MSCI Research Jim is chief economist on the MSCI Real Assets team and is based in New York. He is the principal author of the US Capital Trends report series and a frequent speaker at commercial real estate conferences. At Real Capital Analytics, which MSCI acquired in 2021, Jim was a leader for analysis across the commercial property universe. Jim also spent two decades at Torto Wheaton Research (now known as CBRE Econometric Advisors) working on issues of real estate risk and forecasting. He recently finished serving a term on the Commercial Board of Governors of the Mortgage Bankers Association and is currently a member of The Counselors of Real Estate.

As you make big plans for 2024, here's one of our most popular episodes from the past year featuring author and professor Bent Flyvbjerg talking about how he and his team studied more than 16,000 projects—from skyscrapers to Oscar-winning films—to learn the secrets of their success, and the common thread in their failures.THIS EPISODE'S GUEST:Bent FlyvbjergProfessor, Oxford University and IT University of CopenhagenBent Flyvbjerg is the first BT Professor at Oxford University and the VKR Professor at the IT University of Copenhagen, an economic geographer, and “the world’s leading megaproject expert,” according to global accounting network KPMG. He has consulted on over one hundred projects costing $1 billion or more and has been knighted by the Queen of Denmark.

2023 was a challenging year for commercial real estate, driven by sharply rising interest rates, economic uncertainty and continued slow progress on return-to-office plans. Join us as we look back at everything from market conditions to labor issues to office amenities to emerging technologies and more.Insights to Share: ·     The commercial real estate market in 2023 was challenged by sharply rising interest rates, but fundamentals largely held up, aside from the office sector.·     Technological advancements, particularly artificial intelligence (AI), played an increased role, especially in Data Centers but elsewhere as well.·     U.S. seaports made strides in solving pandemic-era bottlenecks and other challenges.

Mixed-use real estate can be thought of as several discrete projects—executed in parallel—within a block-by-block area, to create a whole that’s greater than the sum of its parts. Three seasoned CRE professionals, Katie Grissom of Nuveen, Sondra Wenger of CBRE Investment Management and Colin Yasukochi of CBRE, discuss the metrics that matter most when measuring synergies across residential, retail, hospitality, office, medical and entertainment.Insights to Share: Mixed-use real estate is key to creating vibrant neighborhoods.Strong, vital neighborhoods are a critical amenity that helps office tenants attract the most productive talent.Investing in mixed-use environments is a key way to help differentiate investment strategies.