· The right acquisition price and bold design and amenity choices can turn challenged office assets into world‑class residential properties.

· Tax incentives can often be the deciding factor in whether a conversion is viable.

· Fast execution is essential for controlling risks and costs in today’s market.

· Office-to-residential conversions are highly bespoke, where building bones matter more than any rule-of-thumb formula.

· Great residential conversions are redefining downtowns, but their future hinges on policy, pricing and how the next market cycle unfolds.

* Parking is vital urban infrastructure, supporting economic growth.

* Technology, like EV charging, revolutionizes parking operations.

* Parking assets can deliver stable cash flow and attractive investment returns.

* Parking structures of the future will become essential urban mobility hubs.

* 2026 offers prime investment opportunities in U.S. real estate.

* Income growth, not cap rates, will drive future real estate returns.

* Value-add industrial assets with access to power are positioned for strong returns.

* Amenity-rich, well-located office space should continue to outperform.

* Rekindled global capital inflows could boost U.S. real estate transaction volume.

* Industrial real estate had its second-best leasing year ever in 2025.

* New demand is being spurred by e-commerce and reindustrialization.

* Prime industrial sites are being developed for data center use, contributing to a scarcity of modern warehouse facilities.

* AI and automation transform operational efficiency and future warehouse design.

* Driverless trucks will eventually alter supply chain networks and spatial economics.

* Portugal's economic turnaround has fueled robust real estate opportunities.

* Hospitality and logistics lead growth, attracting global capital.

* Emerging sectors like data centers and student housing are seeing outsized growth.

* Multifamily housing faces persistent supply challenges.

* The Lisbon and Porto office markets are exhibiting strong performance.

* AI drives massive investment into data centers and physical infrastructure.

* San Francisco's office market is experiencing an AI-driven turnaround.

* The AI revolution is creating specialized talent hubs and increasing demand for sustainable energy.

* AI will boost productivity and necessitate workforce adaptation.

Public-Private Partnerships: The Lenovo Center anchors an 80-acre, 15-year, $1 billion arena-district redevelopment via a public-private/ground-lease structure.

Talent, Talent, Talent: Raleigh’s three tier-one research universities and multi-node job base keep attracting talent, companies and capital.

By the Numbers: Strong population growth (2.2 million to 2.6 million by 2027) plus low cost-of-living (around 3% below national average) signal opportunity for investors.

Local Color: Lenovo Center preserves a tailgating culture while adding retail, restaurants, structured parking and year-round activation.

- Food halls aren’t food courts: Independent concepts + community + beverage drive performance.

- Hybrid work has changed the operating model: Fewer office days demand longer-hour, programming-led models.

- Conversions can happen everywhere: Converting buildings to their highest and best use can work for both offices and food halls, especially in suburban markets.

- Alignment between operators and landlords: Vendor stall flexibility and percentage-rent leases can benefit operators and investors.

- Market snapshot: Colicchio Consulting believes the sweet spot of sizing is around 10,000–15,000 sq. ft. with average buildout costs around $400/sq. ft., depending on the market.

• Commercial Real Estate & AI: For occupiers, AI can create significant operating efficiencies and enhance the workplace experience; for investors, increased efficiency can boost asset values.
• People and Technology: AI is enhancing—not replacing—human decision‑making across organizations.
• Data Quality: Good data management is the foundation for applying AI most impactfully.
• Productivity: Every organization is balancing innovation and productivity gains with responsible deployment that considers privacy, governance and human‑in‑the‑loop practices
• Long-term Outlook: AI is broadening visibility across markets, helping to foresee unanticipated or exogenous events and surfacing new ideas.

• National CRE outlook, including signs of asset repricing stabilization, improving liquidity and transactions momentum. 
• Industrial dynamics in Southern California, from manufacturing fundamentals and port-driven demand to pockets of strength and ongoing vacancy challenges. 
• Sector trends, including data centers, alternative assets, big‑box scarcity, rent trends, and how corporate occupiers are re‑entering the market. 
• Multifamily performance across gateways, the Sun Belt and the Midwest, driven by slowing construction cycles, demographic patterns and evolving investor interest. 
• Emerging and opportunity markets, from South Carolina’s growth to resurgent metros like San Francisco, Seattle, Phoenix and smaller high-growth cities such as Boise. 

Key Takeaways:

• The U.S. economy should remain resilient in 2026.
• While the labor market finds a new equilibrium, many companies are racing to upskill and retain talent as they adopt AI processes.
• Reshoring and infrastructure improvements are expected to drive industrial growth in secondary markets.
• Data centers are positioned as a leading sector amid structural undersupply.

• Mixed-use suburban developments are gaining strong appeal.
• ·      Amenity-rich office space drives tenant demand and retention.
• ·      Short-term, flexible leases can dovetail well with corporate occupier’s needs.
• ·      Residential conversions of obsolete suburban office parks can enhance long-term asset value.
• ·      Planned communities thrive with diverse housing and retail integration.

Key Takeaways:

1.        Status—being respected and regarded—leads to influence, access to resources, and career advancement.

2.        People judge quickly, and have high regard for those who are well-intentioned and competent.

3.        Hard work needs to be seen to ensure effort is valued.

4.        You can leverage “swing thoughts” to improve your career. [SI1] 

 [SI1]Do not really understand this. Remind me what “swing thoughts” are

1.    Encourage[SI1]  Humor and Humility: They help maintain a flexible and open-minded approach, making it easier to rethink and adapt.

2.    Have Pre-Mortems: Discuss as many potential failures as possible before launching. That way you can prevent or know how to handle problems when they occur.

3.    Eschew Best Practices for Better Practices: “Best Practices” implies there’s only one right way, while seeking “Better Practices” encourages people to innovate and try new things.

4.    Build a Challenge Network: Maintain a group of trusted critics who provide truly honest feedback to improve your decision-making.

5.    Reward Speaking Truth to Power: Encourage employees to ask questions, suggest improvements and challenge outdated ideas.

 [SI1]Please run these by Adam

• Everything is operational real estate: Real estate companies are evolving from asset focused businesses to operating platforms, requiring high-quality management relentlessly focused on workplace experience.
• AI and data utilization are no longer nice-to-haves: Using AI to manage and interpret data is crucial for optimizing building operations.
• Markets are adapting to accommodate hybrid work models with flexible office usage: Urban markets especially put significant emphasis on making downtown areas vibrant.
• Finance institutions are catching up: The finance industry must recognize and adapt to the operational nature of modern real estate.
• Flight-to-quality is expanding: The focus for landlords and occupiers will increasingly be on creating spaces that people find enriching and valuable, not just functional.

• J.P. Morgan Asset Management is optimistic about 2026, driven by expectations of lower interest rates and resilient real estate fundamentals.
• Quality matters more than ever—top-performing assets and strong operators are expected to outperform, while tertiary markets and lower-tier properties carry greater risks.
• Retail real estate has made a strong comeback, and high-quality office space is showing positive momentum, especially in major markets like San Francisco and New York.
• Operational excellence and risk management—including attention to emerging risks—are critical for long-term portfolio success.
• Diversification remains key: even the best assets need to fit together strategically to reduce volatility and capture growth opportunities.

Key takeaways on office investing:

Office market is recovering: Investment activity in the office sector is rebounding with more bidders and increased debt availability.

Investment strategies have shifted: Investors are focused on cash flow and downside protection, with cash-on-cash yields reaching 8%–15%.

Micro-market dynamics are key amid a flight to quality: Prime assets in live-work-play submarkets are outperforming, while obsolete buildings face demolition or conversion, reducing overall supply.

Conversions are limited: Selective repositioning is critical, as only a small percentage of office buildings are structurally viable for residential or hotel conversions.

Occupier priorities have changed: Tenants now prioritize wellness, sustainability and experiential amenities, driving demand for high-quality spaces.

Key takeaways on raising and deploying capital:

• Sourcing real estate capital is diversifying, with growing emphasis on private wealth and new opportunities to tap into the defined-contribution (DC) market.
• Accessing retail capital and 401k plans through DC channels is potentially a major area of growth, requiring new product structures and daily liquidity solutions.
• Fund managers must strategically align vehicle structures with investor objectives and market conditions for both short- and long-term capital needs.

Prioritize operations and asset selection: Gallistel emphasizes that “hope is not a strategy”—returns will come from income growth and strong asset selection rather than relying on market-driven cap rate compression.

Diversification matters: Niche sectors like data centers and student housing offer non-correlated income streams and resilience compared to traditional “big four” asset classes.

Europe looks compelling: Europe offers relative value and growth potential, making it an attractive complement to a U.S. property portfolio.

Infrastructure and power are critical: CBRE IM is investing in solutions like battery storage and renewable energy to capitalize on growing demand for power in the digital economy.

Overlooked markets show promise: Gallistel sees opportunities in U.S. Midwest real estate markets as supply dynamics shift.

·     relationships and talent pools in 82 countries.

·     Coca-Cola balances global brand consistency with local cultural expression, using design to reflect community identity within the framework of corporate standards.

·     A flexible real estate strategy, favoring leased over owned space and shared offices in emerging markets, enables Coca-Cola to scale quickly while managing risk.

·     The company’s “Main Street” workplace model is intentionally designed to foster collaboration and efficiency by integrating amenities and flexible, open space.

·     Success is measured by how well the workplace supports productivity, employee sentiment and business outcomes.

Key takeaways on Gensler’s views of workplace design:

·     Workplace design is in flux: Today's offices require a rethink of the work environment, shifting from rigid layouts to flexible spaces.

·     One size doesn’t fit all:  From law firms to tech companies, bespoke design strategies—rooted in culture, function and employee satisfaction—are outperforming cookie-cutter solutions across sectors.

·     Destination workplaces are on the rise: Companies are investing in spaces that attract talent and foster collaboration, turning offices into places where people want to be.

·     AI is changing the game: Artificial intelligence is revolutionizing architectural visualization, enabling real-time design iteration and deeper client engagement.

Key Takeaways on Commercial Real Estate Investment Trends

U.S. real estate is entering a prime investment window as repricing and improving fundamentals create opportunity.

Retail and office sectors are attractive plays, as rents bottom out and occupier demand increases.

Investors should explore value-add strategies and secondary assets. Demand should spillover as vacancy in top-tier space continues to shrink and future supply in office and retail remains constrained. 

Alternative assets are evolving from niche to institutional, but investors should remain disciplined about entry pricing and mindful of the needed operational expertise.

With volumes poised for double-digit growth in 2026 amid a durable market recovery, investors can benefit from early positioning and data-driven conviction.

·     Generational shifts are reshaping the workplace: Organizations are navigating the most pronounced generational transition in decades, with differing expectations around leadership styles, collaboration and work-life harmony.

·     Delayed life milestones impact real estate demand: Trends like marrying later in life, postponing homeownership and having fewer children are catalyzing demand for adaptable, amenity-rich properties.

·     Technology is a key driver of generational change: From smartphones to social media, tech has fundamentally altered how each generation communicates, works and interacts—creating both opportunities and challenges for office culture and productivity.

·     Hybrid work reflects generational preferences: The way different generations value in-person collaboration, flexibility and autonomy gives hybrid work models staying power.

·     Empathy is essential for cross-generational leadership: Understanding the distinct values and experiences of each generation, and applying that knowledge in how you communicate  and set policy, can build stronger connections with colleagues.

·     Leaders who embrace change as a strategic advantage can outperform peers.

·     Championing shared values, self-governance and rule-breaking offers a provocative framework for rethinking organizational culture.

·     Emotional intelligence can be a critical competency for business executives.

·     Prioritizing the short-term over the long-term can cost organizations capital and credibility.

·     Leaders should challenge industry “settled” truths to unlock workplace innovation.

This week we shine a light on REITs in the U.K. Two London-based experts discuss what’s driving deal flow, investment strategies and long-term returns, especially in logistics, retail and hospitality.

·      Triple-net REITs in the U.K. offer predictable income and resilience through market cycles.

·      Urban logistics and convenience retail are leading sectors, driven by consumer behavior and e-commerce demand.

·      Sub–£20-million lot sizes are drawing interest from family offices and regional investors focused on low-debt, high-efficiency deals.

·      M&A is accelerating REIT scale and relevance, enabling cost synergies, dividend growth and greater appeal to global capital.

·     Interest rate spreads and swap differentials can make U.K. real estate increasingly competitive against European and U.S. markets.

Key takeaways on evolving investor strategies:

·      Alternatives are reshaping core portfolios, with newer funds allocating heavily to data centers, seniors housing and single-family residential.

·      Operational expertise is a performance driver, particularly in shorter-lease-term asset types that require service-oriented models.

·      Smaller markets offer strategic upside, with investor focus shifting to high-growth, affordable areas like El Paso and West Palm Beach amid demographic and affordability trends.

·      Flexible fund structures allow managers to hold through market cycles and avoid forced sales in illiquid environments.

·      Benchmarking tools enhance insights into income vs. appreciation return potential and help investors measure returns.

Key takeaways on real estate investing:

·      High-net-worth investors are stepping in aggressively during the current market cycle, while institutional capital remains cautious and highly selective.

·      Data centers benefit from sustained strong demand, but require disciplined underwriting due to lease rollover risks and rising competition.

·      Many institutional investors prefer targeted strategies in assets like build-to-rent, industrial and retail, giving them more control and precise capital deployment.

·      Office development in New York remains fundamentally attractive, but securing equity partners is challenging due to risk expectations and long completion timelines.

·      MetLife is experimenting with AI to enhance investment committee decision-making, enabling a sharpened focus on key risks and opportunities but not replacing human judgment.

Key takeaways on U.S.-Mexico Border Markets:

·      Port Laredo Surpasses Traditional Gateways: Currently the top U.S. import hub by value, Laredo’s rise reflects a structural shift in trade flows. Demand for modern logistics facilities near the U.S.’s southern border continues to grow.

·      Kansas City Leads for Absorption and Connectivity: With 28% leasing growth and strategically situated along I-35 with access to a newly unified Canada–Mexico rail system, Kansas City is emerging as a central node for North–South supply chains—ideal for occupiers seeking scalable inland distribution.

·      14M+ SF Under Construction in El Paso and Laredo.  These border markets are seeing major development of automation-ready cold storage and FTZ-enabled facilities. This signals long-term confidence and presents opportunities for early investment in next-gen industrial assets.

·      Twin-Plant Models Resurge: The return of dual facilities operating on both sides of the border is fueling demand for more sophisticated manufacturing and distribution space t. Occupiers should evaluate cross-border strategies to optimize labor and logistics.

·      Keen Competition to Secure Labor Cost Advantages: Border markets offer up to 70% labor cost savings vs. most U.S. cities, and have a skilled workforce. However, occupiers must act strategically to secure talent in a highly competitive market.

Key takeaways on the evolution of malls:

·      Malls are transitioning into multi-use destinations, integrating entertainment, hospitality and residential to diversify income and increase relevance.

·      Financing is increasingly accessible for retail assets, with recent deals showing lender confidence and competitive debt structures.

·      Success depends on hyper-local strategies, with redevelopment tailored to demographics, infrastructure and competitive dynamics.

·      Malls in secondary markets benefit from large trade areas and limited alternatives, reinforcing their role as dominant regional retail hubs.

·      Redeveloping legacy anchor spaces into formats that appeal to current customer wants and tastes can unlocks value and enhance long-term viability.

• Attractive in volatile markets: Positioned as a hybrid asset class—part real estate and part structured finance, net lease investments offer cash flow backed by quality credit tenants.
• Manufacturing momentum: Production facilities are emerging as high-performing assets due to their strong cash flow and tenant investment in infrastructure.
• Sale-leasebacks as strategic tools: Investors and corporate occupiers are increasingly using sale-leasebacks to unlock capital, especially in sectors where considerable capital is tied up in operating assets.

·      Capital market resilience: Despite macroeconomic headwinds, net lease is attracting institutional capital, with growing interest from large institutions and wealth management channels.

·      Risk-adjusted returns and geographic nuance: Cap rates and valuations vary significantly by location and tenant credit quality, underscoring the importance of underwriting both real estate fundamentals and corporate financial health.

  With sub-3% vacancy and strong rent growth, Industrial Outdoor Storage (IOS) is outperforming traditional industrial assets.

·     Zoning and entitlement hurdles limit new IOS development, boosting demand for existing sites.

·     Major investors are amassing IOS portfolios, following the path of self-storage and single-family rental.

·     IOS supports logistics, construction and utilities with strategic infill locations and flexible outdoor space.

·     Electrification and evolving logistics technology are reshaping IOS.

Key takeaways:

·      Organized to Provide Structural Discipline and Tax Efficiency: REITs must distribute at least 90% of taxable income annually and maintain strict asset and income thresholds, creating a disciplined framework that supports consistent investor returns.

·      Public REITs Are Conservatively Managed: With average leverage around 30%, public REITs are significantly less leveraged than private real estate vehicles, reducing financial risk and enhancing long-term stability.

·      Global Options: REITs are publicly traded in major markets around the world.

·      Positioned for Opportunistic Acquisitions: REITs with strong balance sheets and access to capital are well-positioned to acquire assets or portfolios when pricing becomes accretive.

·      Provide Access to Emerging Asset Classes: The REIT structure includes data centers, cell towers and healthcare facilities, aligning with broader economic and technological changes.

Key takeaways on data center trends:

·     Data center site selection is increasingly dictated by access to scalable power, increasing  development in markets with robust energy infrastructure.

·     AI-driven demand is accelerating the need for hyperscale campuses, with some sites spanning thousands of acres and requiring gigawatt-level capacity.

·     Lease structures are based on power usage rather than square footage, with rental rates rebounding over 50% since 2021 due to limited availability.

·     Long-term capital is flowing into the sector, with infrastructure funds driving a shift in investment strategies.

·     Labor and construction cost pressures are prompting innovations like prefabrication to meet the demands of billion-dollar builds.

Key Takeaways:

·     West Palm Beach Is Emerging as a Strategic Business Hub: With major investments in infrastructure, education and healthcare, the city is evolving from a back-office market into a front-line destination for corporate headquarters and innovation.

·     Walkability and Waterfront Access Are Driving Tenant Appeal: The city's urban design, combined with its coastal location, offers a lifestyle advantage that's increasingly important for attracting and retaining top talent.

·     Class A Office Space Is Thriving Despite National Trends: Premium developments in West Palm Beach are commanding Florida's highest office rents, signaling strong demand from financial and tech firms seeking quality and location.

·     Inclusive Growth Is Key to Long-Term Value: Investments in workforce housing, K–12 education and cultural amenities are creating a well-rounded ecosystem that supports both occupiers and employees.

·     Palm Beach County Is Competing with Top Growth Markets: With its favorable business climate, lifestyle advantages and expanding infrastructure, the region is positioning itself alongside cities like Austin, Nashville and Dallas as a top choice for corporate expansion.

·     CBRE foresees U.S. commercial real estate investment activity increasing by 10% in 2025, despite macroeconomic uncertainty.

·     CBRE believes the office market is passed its trough and leasing activity should continue to rebound.

·     Industrial & logistics leasing activity will likely be on par with last year. Occupiers want modern facilities that are close to consumers.

·     Availability of retail space will remain relatively tight due to limited new construction over the past decade. Retailers prefer space in high-traffic, open-air centers in growing markets.

·     Rents have generally bottomed out in the multifamily market. The Midwest and Pacific Northwest are poised to lead national rent growth.

·     Data Centers and the credit markets represent opportunities for nimble investors.

Key Takeaways:

·     Hospitality-led development is reshaping urban real estate, with restaurants and hotels serving as anchors that drive traffic, elevate brand identity and boost asset value.

·     Phoenix is emerging as a high-growth, diversified market, supported by strong demographics, pro-business policies and expanding sectors like semiconductors and healthcare.

·     Controlling the operations of hospitality assets enhances consistency and guest experiences, creating a competitive edge and long-term brand loyalty.

·     Investment strategies are evolving, with developers leveraging a mix of institutional equity, local partnerships and vertically integrated operations to deliver complex, high-value projects.

·     Experience is the new differentiator in retail and hospitality, as consumers increasingly prioritize service, ambiance and authenticity over convenience.

Key Takeaways:

 · PGIM Real Estate’s RealAssetX lab is focused on transforming real estate investing through AI, sustainability and operational efficiency, signaling a shift from traditional asset management to tech-enabled value creation.

· Investors are reallocating capital to Europe and Asia, reflecting a broader trend toward geographic diversification and shifting regional macroeconomic confidence.

· Applications of AI in building systems, such as HVAC optimization, are delivering significant energy savings, demonstrating the potential for improved net operating income (NOI) and sustainability.

· New AI tools are being developed to estimate embodied carbon at scale, positioning sustainability as a core factor in asset valuation and investment strategy.

· Rental housing, logistics, data infrastructure and real estate credit are key areas of investor focus, while office assets require a highly selective, value-add approach.

insights on deploying global capital:

·     Today's market demands flexible investment strategies that can adapt quickly to geopolitical shifts, interest rate changes and capital market volatility.

·     High-quality office assets in prime locations are piquing investor interest, offering potential upside while demand for class B/C assets remains muted.

·     Debt capital availability is improving, with both traditional capital sources and alternative lenders actively competing to finance deals.

·     Investors are increasingly targeting high-growth submarkets, prioritizing local demand drivers over broad asset class preferences.

·     Technology and AI are influencing investment decisions, with growing potential to enhance underwriting and portfolio strategy.

From This Episode: Recent insights on the U.K. investment market:

• U.K. investment volume has picked up since late last year, buoyed by international capital.

• AI and data tools are streamlining everything from valuations to investment analysis, enabling faster, more informed decisions while freeing up time for high-value activities.

• The office sector continues to bifurcate, with top-tier, amenity-rich spaces commanding strong rents while the lowest-grade assets face obsolescence or conversion.

• Sustainability is a key performance driver, with occupiers and investors increasingly rewarding green buildings and penalizing outdated, inefficient assets.

• Despite global uncertainty, international capital, particularly from Asia and Australia, is returning to the U.K., signaling renewed confidence in its real estate fundamentals.

1. Growth in Europe’s Industrial & Logistics sector is expected to driven by demand from 3PLs, e-commerce and manufacturing.
2. Operational expertise is crucial in Industrial & Logistics, particularly in denser urban environments.
3. Data centers is a growing niche, with high investment potential.
4. The European logistics market is more fragmented than in the US. There's also less development and labor costs play a bigger role in the investment equation.
5. Geopolitics, evolving trade policies and technology advancements all have an influence on the European logistics market.

·     Zoning and entitlement hurdles limit new IOS development, boosting demand for existing sites.

·     Major investors are amassing IOS portfolios, following the path of self-storage and single-family rental.

·     IOS supports logistics, construction and utilities with strategic infill locations and flexible outdoor space.

·     Electrification and evolving logistics technology are reshaping IOS.

·     Workplace design can reflect and reinforce your organization’s mission and culture. When space aligns with purpose, it becomes a tool for engagement, innovation and long-term employee satisfaction.

·     Design an office to support various ways of working like collaboration, focus and events. This maximizes space efficiency while supporting evolving work patterns.

·     Open staircases and shared social zones drive spontaneous interaction, collaboration, creativity and a sense of community.

·     A great workplace integrates technology seamlessly from smart systems to digital collaboration tools, creating a cohesive experience for in-person and remote colleagues.

·     Measure engagement and satisfaction and make them the barometer of success.

·     WeWork has repositioned itself as a real estate-first company focusing on strategic locations, hospitality services and profitability.

·     Demand for flexible office space is accelerating, with enterprise clients requiring scalable, adaptable solutions.

·     Tech, finance and pharma are setting the pace for demand. 

·     WeWork has begun training its staff using Ritz-Carlton’s hospitality standards.

·     Today, WeWork utilizes revenue-sharing, management agreements and traditional lease models.

Share these insights on co-living, which is attracting residents and capital, particularly in overseas markets:

• Co-living fills a market gap between hotels and multifamily, and is distinguished by resident tenure, product mix and community social environment.

• Co-living offers flexible, furnished units with strong appeal to working professionals and students.

• Co-living assets can be an attractive investment, delivering stable income and occupancy as high as 95%+.

• Conversions of offices and hotels can often be delivered more quickly and at lower costs than ground-up co-living development and produce better risk-adjusted returns.

• Private equity is flowing into co-living and more institutional core capital may target the sector as it matures.

• Urban affordability and demographic shifts are driving long-term demand, positioning co-living as a scalable residential solution.

With a twist on the conventional lodging business model, Extended Stay America (ESA) has seen impressive growth in recent years. ESA CEO Greg Juceam discusses managing its real estate portfolio and provides insights on the business of long-term accommodations.

Share these insights from this week’s episode:

1. Investment Potential: The extended-stay lodging segment offers a resilient and growing opportunity, particularly in secondary and tertiary markets.
2. Operational Simplicity: Extended-stay hotels can benefit from streamlined operations and less labor requirements.
3. Scalability: ESA’s model combines ownership and franchising, enabling multiple avenues for growth and scalability.
4. Diversified Demand: The diverse range of guest demand drivers -- from construction crews to long-term healthcare treatments to digital nomads -- tends to support stable occupancy rates.
5. Strategic Expansion: ESA’s focus on new builds and strategic acquisitions positions it well for future growth, even in challenging capital markets.

Share these insights on proptech investing:

·     Investing in PropTech, like all venture capital investments – is high risk and high reward. Investors typically underwrite 40%+ internal rates of return (IRRs), betting that a few transformative companies succeed and compensate for those that fail.

·     Investing in PropTech provides early access to innovations that enhance asset performance, reduce costs and create competitive differentiation.

·     Artificial intelligence is expected to improve underwriting, asset selection and risk modeling for real estate investors. Those that adopt AI-driven tools early may gain a significant edge.

·     The initial public offering (IPO) market has slowed, but standout exits like ServiceTitan show that public capital is still available for top-tier companies. Investors in private companies should be prepared for longer holding periods prior to exits.

·     The most investable PropTech companies are those that solve challenges for  real estate in operations, capital markets, risk management and elsewhere. Deep industry knowledge is key to identifying winners.

1.    Uncertainty: The construction industry faces significant uncertainty due to volatile interest rates, higher tariffs and costs for materials and labor.

2.    Contract Scrutiny: Detailed contract reviews, especially force majeure clauses, are crucial to manage risks.

3.    Risk Mitigation: Strategies such as early material procurement, storing materials and increased contingencies in contractor agreements are essential to safeguard projects.

4.    Labor Challenges: Rising costs and shrinking labor availability are critical factors affecting construction projects.

5.    Affordable Housing: Despite market volatility, affordable housing projects continue due to the critical need for them and creative financing solutions.

Share these insights on industrial & logistics real estate:

1.    E-commerce helped the industrial sector grow, but a spate of development has created challenges.

2.    Large-scale redevelopment projects, such as transforming former military bases, can yield substantial returns but require flexible planning, environmental cleanup and, often, partnership with the public sector.

3.    Modern industrial buildings are designed with increased clear heights and advanced lighting to meet present and future occupier needs.

4.    Highway and transportation access, utilities availability and environmental regulations are some of the critical factors in industrial site selection.

5.    Staying informed about local regulations, zoning restrictions and community sentiments is vital for securing project entitlements.

Key Takeaways on the Economic and Real Estate Outlook

·     Market Sentiment: Real estate fundamentals don’t change overnight. Leasing activity is proceeding across asset classes though some occupiers are delaying decisions until they have more clarity on potential policy changes and their economic impact.

·      Economic Indicators: Monitoring not only job growth and inflation but also softer indicators like travel bookings and restaurant reservations provides a feel of the real economy.

·      Nimble Capital: High-net-worth individuals can move quickly to pounce on attractively priced opportunities.

·     Profitable Sustainability: Commercial real estate investment strategies that integrate today’s sustainability and decarbonization technologies can enhance returns.

·     Economic Opportunities: There is high occupier demand for green buildings, presenting investment opportunities.

·     Technological Integration is the key: Using energy-efficiency systems and AI can enhance the operating performance and value of real estate assets.

·     Strategic Market Focus: Regulatory frameworks and government incentives can increase the appeal of sustainable investment strategies in certain markets.

Share these insights on succession planning in family-owned businesses:

·      Succession Planning: Establish clear governance and involve family members in decision-making to ensure smooth leadership transitions.

·      Leadership Transition: Transferring leadership to the next generation requires structured processes and clear roles.

·      Family and Business Balance: Balance family dynamics with business operations, making necessary sacrifices for success.

·      Adaptability: Evolve business models and diversify services to stay competitive.

·      Economic Resilience: Maintain liquidity and seize opportunities during economic downturns.

Share these insights on how to use storytelling to improve the impact of communications

1.    Remember the “IRS” model: The Intriguing Beginning, Riveting Middle, and Satisfying End framework helps professionals craft compelling narratives.

2.    Make emotional connections: Effective storytelling connects with audiences on an emotional level, enhancing understanding of information that influences decision-making.

3.    Be memorable: Storytelling makes your messages more memorable and meaningful.

4.    Express empathy and curiosity: A good business story, like any story, feels human and personal, while delivering an insight.

Share these insights on how to be a successful leader:

1.    Encourage Humor and Humility: They help maintain a flexible and open-minded approach, making it easier to rethink and adapt.

2.    Have Pre-Mortems: Discuss as many potential failures as possible before launching. That way you can prevent or know how to handle problems when they occur.

3.    Eschew Best Practices for Better Practices: “Best Practices” implies there’s only one right way, while seeking “Better Practices” encourages people to innovate and try new things.

4.    Build a Challenge Network: Maintain a group of trusted critics who provide truly honest feedback to improve your decision-making.

5.    Reward Speaking Truth to Power: Encourage employees to ask questions, suggest improvements and challenge outdated ideas.

Share these insights:

-     Market Momentum: Real estate capital markets are gaining momentum, as the gap between buyer and seller expectations narrows.

-     Strategic Investment: Sectors like affordable housing, cold storage, and industrial outdoor storage present attractive opportunities.

-     Market Reset and Repricing: Investors are setting their sights on higher returns, even for lower-risk assets.

-     New Approach: Manulife has transformed into a private equity real estate investor and launched new investment strategies to capitalize on market opportunities.

-     Tech Advances: AI enhances operational efficiencies and predictive analytics, improving underwriting and investment decisions.

Share these insights about Chicago real estate:

-     The Big Split: Chicago's office market is bifurcated: creditworthy occupiers looking for high-quality space will have limited options while much of the rest of the market languishes amid a glut of space.

-     Important Amenities: Advanced technology, workout facilities and unique features in the best buildings will help  attract tenants and draw people back to the office.

-     Capital Markets Challenges: High costs and limited access to capital have slowed new development significantly, exacerbating the shortage of premium-quality space.

-     Transportation Networks: Chicago's excellent transportation infrastructure supports its diverse economy and enhances its appeal as a business hub.

-     Strategic Transformation: Fulton Market has evolved into a vibrant live-work-play area, attracting major tenants and showcasing successful urban redevelopment.

Share these insights about the self-storage industry fundamentals:

1. Operators understand the customer: Self-storage customers prioritize proximity and convenience over amenities.
2. Data plays a huge role: Savvy investors use data to inform site selection and identify market trends such as the increasing demand for units in urban areas.
3. The housing market impacts demand: Investors should be aware of the potential risks and opportunities associated with housing market fluctuations.
4. Operational expertise required: Self-storage relies heavily on operational expertise to maximize returns.

Retail

• Unique Identity Wins: Local restaurants and regional brand dining experiences are essential to attracting visitors to a city or neighborhood.
• Bifurcation of Retail: High-end luxury retailers and those that offervalue to consumers are doing well.

Office

• Demolition Over Conversion: Many older offices are being demolished due to high conversion costs and antiquated construction.
• Amenities Matter: Office buildings with unique amenities are commanding higher rents and driving tenant demand.

Cities & The Economy

·     Urban Revitalization: Cities are experiencing a resurgence with new developments driving growth and investment.

·     Caution Persists: A large federal deficit, high consumer credit card debt, and sticky inflation are making it essential for investors to be prepared for extended volatility.

Share these insights about opportunities in Miami:

1. Miami is thriving: The city is growing rapidly, with strong demand for housing driven by an increasing population.
2. Luxury housing is in demand: The Residences at Mandarin Oriental is a prime example of the demand for high-end housing in Miami.
3. International investors: Miami’s multi-faceted appeal is attracting buyers from around the world.
4. Demographics are changing: Brickell, for instance, has attracted a younger population base.
5. Adaptive re-use opportunities: The office market in Miami has softened, but conversion and redevelopment projects are underway.

Share these insights about investment opportunities in Spain:

1. Spain has great fundamentals: Gone are the dog days following the Global Financial Crisis. Spain's high economic growth rate has made it an attractive investment destination.
2. Focus on alternative real estate sectors: Some of Spain’s strongest sectors are student housing, life sciences and seniors housing.
3. Renewable energy is in demand: Interest in energy and sustainable infrastructure, particularly around data centers and the industrial sectors, is high.
4. Big pharma has a big presence: A consolidation of big pharma companies makes the region attractive for life sciences investment.
5. It’s a business-friendly environment: Incentive programs and a supportive regulatory environment has drawn inbound capital.

Share these insights from this week’s episode:

• Tech and AI Potential: The growth of AI is contributing to an  economic revival in San Francisco.
• Office-Space Dynamics: Office leasing improved notably  in San Francisco in Q4 2024, driven by its strong tech tenant base.
• Housing Development: Increasing the availability of affordable housing is vital for maintaining the city's workforce and economic growth.
• Infrastructure Improvements: Enhancing transportation—including the city’s historic trolley—and other infrastructure systems will support the region's growth.
• Cultural and Tourism Appeal: San Francisco's unique culture, diversity and lifestyle continue to attract talent and investment.

Share these insights from this week’s episode:

• Everything is operational real estate: Real estate companies are evolving from asset focused businesses to operating platforms, requiring high-quality management relentlessly focused on workplace experience.
• AI and data utilization are no longer nice-to-haves: Using AI to manage and interpret data is crucial for optimizing building operations.
• Markets are adapting to accommodate hybrid work models with flexible office usage: Urban markets especially put significant emphasis on making downtown areas vibrant.
• Finance institutions are catching up: The finance industry must recognize and adapt to the operational nature of modern real estate.
• Flight-to-quality is expanding: The focus for landlords and occupiers will increasingly be on creating spaces that people find enriching and valuable, not just functional.

With a twist on the conventional lodging business model, Extended Stay America (ESA) has seen impressive growth in recent years. ESA CEO Greg Juceam discusses managing its real estate portfolio and provides insights on the business of long-term accommodations.

Share these insights from this week’s episode:

1. Investment Potential: The extended-stay lodging segment offers a resilient and growing opportunity, particularly in secondary and tertiary markets.
2. Operational Simplicity: Extended-stay hotels can benefit from streamlined operations and less labor requirements.
3. Scalability: ESA’s model combines ownership and franchising, enabling multiple avenues for growth and scalability.
4. Diversified Demand: The diverse range of guest demand drivers -- from construction crews to long-term healthcare treatments to digital nomads -- tends to support stable occupancy rates.
5. Strategic Expansion: ESA’s focus on new builds and strategic acquisitions positions it well for future growth, even in challenging capital markets.

 Significant Pool of Capital: Family offices and high-net-worth individuals collectively represent hundreds of billions of dollars seeking real estate investment opportunities.

Access and Relationships: Family offices often do not entertain unsolicited approaches. It's crucial to build trusted relationships with their advisors who act as gatekeepers.

Investment Preferences and Structure: Family offices often prefer direct investments and opportunities where they can have more control and flexibility.

Market Conditions and Opportunities: High interest rates and current market conditions have prompted family offices to invest cautiously with a focus on data centers, logistics and housing.

Evolving Preferences: The preferences of the next generation are critical considerations. Younger family members often prioritize impact investing and newer asset classes.

Share these insights from this week’s episode:

• Innovative Modeling: Property owners should adopt a sophisticated approach to risk management, using advanced tools and models to inform their insurance decisions.
• Captive Insurance: Owners with large portfolios should consider captive insurance and other programs to manage costs and realize profits.
• Data Accuracy: Providing detailed and accurate information about properties can significantly impact insurance modeling and premiums.
• Stay Informed: Companies should designate an in-house expert dedicated to staying informed about insurance market trends and innovations crucial for effective risk management.

Share these insights from this week’s episode:

• Corporate support, cultural institutions and educational resources fuel Atlanta's economic development.
• The growing preference for mixed-use environments and high-amenity office spaces has attracted global brands and talent.
• Major sporting events like the 2026 FIFA World Cup and strategic urban development projects will continue to shape Atlanta's global standing.
• Addressing infrastructure challenges, particularly in the transit system, are key to supporting future growth.
• One of the most educated cities in the U.S., Atlanta’s ability to retain its diverse, highly skilled workforce is critical for sustained success.

What will 2025 hold for the global economy and real estate? Selma Hepp, CoreLogic Chief Economist, and Richard Barkham, CBRE Global Chief Economist, discuss where they see opportunities and challenges and a few things to keep an eye on.

Share these insights from this week’s episode:

1. Despite continued high interest rates, the economy is expected to perform well in the near term, driven by a resilient consumer.
2. Housing sales are expected to remain subdued due to persistently high mortgage rates and ongoing affordability Issues.
3. Real estate is at the beginning of a new cycle with retail and industrial particularly well positioned.
4. Increased insurance costs and property taxes have exacerbated housing affordability challenges.

Insights to Share:

• Belinda Román, Associate Professor of Economics at St. Mary’s University, expects GDP growth of 3% this year.
• CBRE EA’s Dennis Schoenmaker expects GDP to hover around 2%.
• Even with slower economic growth, there will be opportunities in commercial real estate.
• Regional, national and global forecasting requires a deep understanding of the available data.
• In commercial real estate, where information has historically been opaque, future forecasting can be enhanced by  AI.

Share these insights from this week’s episode:

• Dallas offers plentiful industrial and multifamily real estate opportunities thanks to its rapid growth and economic diversification.
• Investors and businesses benefit from Dallas' pro-business policies and relatively low tax burdens.
• Demand for convenience and amenities is driving the trend toward master-planned communities that offer live-work-play environments.
• Dallas’s growth hinges on continuing infrastructure investment, including transportation and public services to support its expanding population.

Share these insights on pillars of a successful CRE career:

Lead with integrity:

• Making decisions that may be contrary to your immediate financial gain builds trust and loyal, long-term clients.

Seek out mentors and feedback:

• Mentorship is crucial for career development and informal feedback fosters skill enhancement.

Challenge the status quo:

•  Questioning traditional norms can lead to progress and achievement. Say yes to new challenges and opportunities.

Balance flexibility with visibility in the workplace:

• Flexible work arrangements can be beneficial, but being present in your professional environment is also key to advancement.

Favor unity over separation of your work-life:

• Completely separating professional and personal time is hard, whereas embracing work-life unity means emphasizes purposeful engagement while in both spheres.

1. Anticipated Market Transformation: Investors should prepare for a major shift in New York’s office market, reminiscent of the historic changes that occurred in the 1920s.
2. Long-Term Leases: Despite the rise of remote work, many New York City businesses want to sign long-term leases due to the high costs and complexities of space renovation.
3. Investment Opportunities: New York has significant opportunities to convert antiquated office buildings into residential or mixed-use properties.
4. Government Incentives: Understanding and leveraging government tax incentives can be crucial in making redevelopment projects financially viable.
5. Cultural Edge: New York's creative energy and foremost cultural and social amenities  remain a strong draw for people, businesses and capital. This enables the City's resilience and continuous evolution.

 Insights to Share:

• Loyalty programs are growing in importance to operators of hotels, airlines and credit cards, many of whom have partnered to increase brand awareness and reach.
• The proliferation of loyalty program participation is, in some cases, diluting the benefits, but savvy consumers can maximize points by having flexible travel dates and using websites such as point.me to compare redemption value at different airlines and hotels.
• One way to create brand loyalty is to provide flexibility and a customized experience. Instead of waiting until guests arrive, hospitality brands should reach out in advance and offer access to local guides, spas and restaurants.

Share these insights from this week’s episode:

1.     Strategic Location Strategy: Emerging tech markets in the Midwest and Southeast can offer significant cost advantages with their growing tech talent pools.

2.    AI and Talent Focus: Prioritizing AI capabilities to drive innovation and growth will mean finding and upskilling talent quickly across both tech and non-tech companies.

3.    Concentrated Venture Funding: Venture firms are creating a network effect by investing in new businesses in traditional tech hubs like San Francisco and Manhattan. Understanding the flow of venture capital can help predict the cities in which real estate demand will grow.

Share these insights from this week’s episode:

·      Northern Virginia is benefiting from substantial job growth, especially in the technology sector, including AI-related roles. Tech job growth supports demand for office space and housing.

·      High-quality, amenity-rich office space is seeing strong demand. Tenants are willing to pay a premium for Class A trophy buildings with amenities, despite downsizing due to hybrid work.

·      Older office buildings are being redeveloped into residential units or data centers. This represents an attractive buying opportunity for nimble investors.

Insights to Share:

1.     Look at competition as well as returns. Schnitzer Properies’ prefers flex-industrial properties over big-box warehouses because there is steady demand and less competition.

1. Do more, but be mindful of how much you can do. Jordan Schnitzer refers to his approach as “aggressive moderation.” Over-extending yourself can sacrifice long-term stability.
2. Trust your leaders to use their local expertise. Schnitzer Properies embraces a decentralized business model with local teams empowered to make decisions and grow the business.
3. Embrace data, but don’t ignore your experience. Utilize a data-driven approach combined with gut instincts to make informed and timely investment decisions.

Share these insights from this week’s episode:

1. The Federal Reserve’s initial rate cut improved market psychology and increased liquidity in the marketplace.
2. While banks remain a critical capital source, private debt funds have stepped up their lending at a time when many banks have pulled back.

3.    Harnessing data and predictive analytics is essential for navigating market complexities and optimizing returns.

4.    Investors are primarily focused on multifamily, industrial and alternative asset classes, with data centers emerging as a particularly attractive investment opportunity.

5.    The next 18 months are expected to see a gradual normalization of transaction volumes, with opportunities in both traditional and alternative real estate sectors.

Share these insights on sustainability and renewable energy:

-      Companies should integrate renewable energy and sustainability strategies into their core business plans to remain competitive and resilient.

-      The renewable energy market is evolving, with regulatory frameworks playing a significant role. Governments can make it easier to achieve environmental goals by writing clear and understandable regulations.

-      Collaboration among technology, business and regulatory bodies can help to drive innovation and advance sustainability initiatives.

-      Broader adoption of renewable energy can mean economic and environmental benefits for many companies.

-      A holistic approach to sustainability, encompassing everything from energy procurement to building materials, is necessary for long-term success.

1.     Engaging the community early and maintaining open lines of communication are crucial for real estate developers to overcome community objections. By involving local stakeholders in the planning process and addressing their concerns, developers can build trust, gain allies and smooth the path for project approval.

2.    Local governments that adapt regulations to allow for a variety of housing types can ease the "missing middle" problem—affordable housing that falls between single-family homes and large multifamily properties.

3.    The affordable housing shortage can provide an impetus for regulatory changes and innovative solutions.

4.    Successful pilot projects can demonstrate how local communities can benefit from new development.

5.    Collaboration between government and the private sector can advance worthwhile projects that can be derailed by well-intention community opposition.

Share these Insights on Cleveland Office Conversions:

-      Cleveland has a long history of converting older office spaces into different uses, long before it became fashionable.

-      The city has a promising future with a growing downtown resident population. Office conversion projects and broader urban re- development plans will support this trend.

-      Cleveland’s focus on enhancing its natural assets, like the lakefront, is another factor supporting the city’s revitalization.

Share these highlights from our conversation about Austin:

• Austin's economy has diversified significantly in the past 20 years, particularly with the growth of the tech, life sciences and automotive sectors.
• Infrastructure improvements, such as airport expansions and major roadway projects, are crucial for sustaining growth.
• Investing in social infrastructure to support students, seniors and everyone in between has been a major focus for Austin.
• The city's young, educated workforce is a major draw for companies, contributing to the rapid growth of Austin's tech sector.

Insights to Share:

• Investors and occupiers increasingly have similar priorities, especially with respect to operational efficiency and sustainability.
• Data-sharing between occupiers and investors can enhance asset performance.
• Consistent, open communication is essential for adapting to market changes and meeting the evolving needs of occupiers and investors.

• Debt and equity investors often see the market differently.
• Rod Vogel, a private equity investor, remains bullish about the long-term.
• Chris Duey, a debt specialist, believes a new credit cycle may be emerging as property values adjust to the current interest rate environment.
• The investors share enthusiasm for data centers, Sun Belt multifamily and selective office investments.

• Utilizing new business models, coupled with technology, can make affordable housing more accessible and cost-effective.
• Optimizing the use of current housing stock through co-living can help to alleviate supply shortages and improve affordability.
• Using technology to streamline the compliance processes can get qualified residents into affordable housing faster.

Insights to Share:

1.     From Laura O’Brien: “Mentorship should actually be intentional. If you ask someone in this company to be your mentor, chances are they will say yes, but you have to make the first move.”

2.    From Chris Ludeman: “Take the work that we have been asked to do very seriously, but never take yourself too seriously.”

3.    From Bill Concannon: “Commercial real estate is a complex sale and a long cycle. So building trust requires time with people you know face to face.”

Secondary transactions—sometimes called indirect investing—are on the rise as a way to acquire real estate. Evercore’s Jarrett Vitulli and CBRE Investment Management’s Achal Gandhi discuss how these investment vehicles can boost returns at lower risk. 

• Secondary transactions are gaining traction as a way to acquire real estate. Often, these transactions offer  investors an opportunity to acquire real estate portfolios at a discount, enhancing returns without taking on property-level risk. 

• The secondary market for real estate is expanding, driven by the need for liquidity, strategic portfolio management and recapitalization opportunities. Notable opportunities are available in logistics, multifamily and healthcare real estate. 

• In today's market, secondary transactions can offer core stabilized assets at discounted rates. 

Insights to Share:

1. Demand for hospitality, multifamily and logistics is growing.

2. Office occupiers strongly prefer high-quality, well-managed buildings that follow ESG principles.

3. The work-from-home phenomenon did not really impact most countries, so office market fundamentals in most dense cities are strong.

Insights to Share:

·     Real estate is a delayed mirror of the economy, says acclaimed forecaster Glenn Mueller.

·     Amid an anticipated long, slow recovery, specialized asset types like self storage and data centers are seeing increased demand.

·     Demand for real estate is tied closely to employment growth. 

·     Consumer spending has been resilient, but is showing signs of slowing, and corporate balance sheets remain strong. 

Insights to Share:

1.     From Laura O’Brien: “Mentorship should actually be intentional. If you ask someone in this company to be your mentor, chances are they will say yes, but you have to make the first move.”

2.    From Chris Ludeman: “Take the work that we have been asked to do very seriously, but never take yourself too seriously.”

3.    From Bill Concannon: “Commercial real estate is a complex sale and a long cycle. So building trust requires time with people you know face to face.”

 Insights to Share:

• Loyalty programs are growing in importance to operators of hotels, airlines and credit cards, many of whom have partnered to increase brand awareness and reach.
• The proliferation of loyalty program participation is, in some cases, diluting the benefits, but savvy consumers can maximize points by having flexible travel dates and using websites such as point.me to compare redemption value at different airlines and hotels.
• One way to create brand loyalty is to provide flexibility and a customized experience. Instead of waiting until guests arrive, hospitality brands should reach out in advance and offer access to local guides, spas and restaurants.

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.

 Insights to Share: 

1. To practice effective crisis management, focus only on what’s important. 
2. The Port of Baltimore partially reopened in just 11 weeks, well ahead of the 11-12 month timeline some experts predicted. 
3. The network of East Coast ports has provided flexibility that mitigated the worst impacts on supply chains. 

In this bonus episode, a group of CBRE summer interns had some terrific questions to ask our guests.

We take a 360-degree look at real estate investing and the capital markets from the perspectives of a pair of influential executives, each with decades of experience in the debt capital markets business. Tom Rugg, Vice Chairman and Co-Head of U.S. Large Loans and Debt and structured finance at CBRE, and Bob Ricci, Senior Managing Director of Lone Star Funds, a player with nearly $90 billion of assets across nearly two dozen funds in its portfolio. 

Insights to Share:

• As challenges in the capital markets persist, properties that were financed with heavy leverage may present opportunities.
• Higher interest rates will make rolling over debt a pervasive issue for several years.
• Distress is unlikely to reach the levels of the post-Great Financial Crisis years.

Insights to Share:

• Venture capital firms, particularly those focused on AI, are increasingly establishing offices in San Francisco, which is driving demand for office space.

• San Francisco’s well-known headwinds have caused investors to shy away from what could be  generational buying opportunities.

• AI is driving significant changes in San Francisco's real estate market, in terms of the types of offices needed and the locations most in demand. AI is also encouraging shorter lease terms, reflecting the fast-moving nature of tech companies.

• San Francisco’s tenants are showing a preference for high-end and creative office space, as well as a preference for sustainability and adaptive reuse.

Insights to Share:

• Belinda Román, Associate Professor of Economics at St. Mary’s University, expects GDP growth of 3% this year.
• CBRE EA’s Dennis Schoenmaker expects GDP to hover around 2%.
• Even with slower economic growth, there will be opportunities in commercial real estate.
• Regional, national and global forecasting requires a deep understanding of the available data.
• In commercial real estate, where information has historically been opaque, future forecasting can be enhanced by  AI.

Insights to Share:

• While the last 24 months have seen a slowdown of transaction activity in industrial markets, the long-term prospects remain solid.

• Conversions to industrial are typically viable where land comprises most of the total development costs, which usually are close to densely populated urban centers.

• Manufacturing and warehouse facilities have increased automation, adding technology that enables machinery to adapt to changes in the business.

Insights to Share:

• Uncertainty about the direction of interest rates continues to hamper commercial real estate investment activity.
• Industrial and multifamily are facing softening fundamentals, but remain historically solid.
• Office continues to be split between the best assets and most of the rest and retail is growing in importance to institutional investors.
• Maintaining strong relationships with lenders is always critical, but especially so now.

“The macro economy is a lot more resilient to the headlines than what you read every day."

-Julia Coronado

President and Founder, Macro Policy Perspectives &

University of Texas Finance Professor

Insights from the episode:

1. Inflation should continue to cool in most countries around the world.

2. The neutral interest rate is expected to be higher than the last cycle due to a healthier household balance sheets, supportive fiscal policy and improved productivity.

3. Challenged multifamily developers should see some relief in the next few years, as interest rates drop, demand for housing increases and financing conditions improve.

GUEST BIO:

Julia Coronado

President and Founder, Macro Policy Perspectives

Julia Coronado founded MPP because she believes independent research can provide the most objective and relevant analysis to inform decision making in an uncertain world. Julia is a Clinical Associate Professor of Finance at the McCombs School of Business at the University of Texas at Austin. She has more than a decade of experience as a financial market economist including serving as Chief Economist for Graham Capital Management and BNP Paribas, and as a Senior Economist at Barclays Capital. After receiving her Ph.D. in Economics from the University of Texas at Austin, Julia worked for the Federal Reserve Board of Governors in Washington D.C. for eight years where she regularly briefed the Board and contributed to the FOMC forecasts. She is a regular commentator in financial media, including CNBC, Bloomberg, Marketplace, and the Wall Street Journal. 

Insights to Share:

·      Siemens is on the leading edge when it comes to attracting talent, sustainability and technology manufacturing.

·      Power is becoming an increasingly important consideration in companies’ site location strategies.

·      Sustainability is quickly becoming a must-have for occupiers and some, like Siemens, will not lease space from landlords that don’t support their carbon-reduction goals.

Insights to Share:

• Nearshoring is spurring industrial activity beyond Mexico’s border cities as companies seek inland nearshoring opportunities.
• The lower cost and availability of labor explains why companies have relocated or expanded manufacturing operations in Mexico.
• The cost of capital, even for transactions denominated in U.S. dollars, is lower than in the U.S.

Insights to Share:

• Despite the headlines, there is budding optimism in some New York commercial real estate sectors, particularly Class A office.
• Legislative efforts to promote affordable housing and sustainability are both incredibly important and challenging.
• New York City provides a nexus of talent, amenities and capital that is hard to replicate.

Insights to Share:

·      Nashville has attracted talent and businesses due to its affordability and high quality of life.

·      Nashville’s local government has fostered the city’s growth by  investing in entertainment and sports, prompting a surge in related industries, as well as tech and retail. 

·      With growth poised to continue, driven by the influx of new residents, Nashville offers an opportunity for private investors to buy Class B office properties.

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.

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.

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.

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.

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.

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 Guests

Dustin Read, Ph.D.

Director, Master of Real Estate Development Program, Clemson University

Dustin 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. Sheets

Executive Director, The Ohio State University Center for Real Estate

Donald 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 Tucker

Executive Director, Wood Center for Real Estate Studies, University of North Carolina Kenan-Flagler Business School

Jeff 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.

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.

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 Staniforth

CEO

Assembly OSM

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 Saklad

Chief Operations Officer

Orrick

Laura 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 Ingersoll

Chief Investment Officer

Americas Direct Real Estate Strategies

CBRE Investment Management

Julie 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.

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.

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.

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.

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.

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.

THIS WEEK'S GUESTS

Richard Barkham

Global Chief Economist, Head of Global Research & Head of Americas Research, CBRE

Richard 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.

THIS EPISODE'S GUEST:

Bent Flyvbjerg

Professor, Oxford University and IT University of Copenhagen

Bent 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.

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.

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.

SOME KEY INSIGHTS:

1. Taking on equity partners through joint ventures can offset high capital costs and support diversification efforts.

2. For e-commerce companies, a physical retail presence can often complement digital platforms.

3. Now is the time to explore investment opportunities outside conventional real estate, such as infrastructure projects or green bonds targeted at energy-efficient construction.

1. The food delivery market has boomed to about $100 billion today just in the U.S., according to Marc Lore, but kitchens look much the same as they did 100 years ago.

2. Wonder is a unique restaurant brand with a founder who sees tremendous growth opportunity in combining brick-and-mortar dining and delivery.

3. The ability to deliver a tremendous variety of “fine-fast” food quickly is a differentiator for Wonder.

“One of the great things about an expedition, which just simplifies life so much, is you have one very, very clear goal.” 

ABOUT THIS WEEK'S GUEST

Rob Lilwall, Adventurer

Rob started his career as a high school geography teacher in England, but has transitioned into a career of adventuring and motivational speaking. His expeditions include a three-year expedition cycling from Siberia to London, a solo walk across the Taklamakan Desert and cycling across the U.S. Across his adventures, he has learned that our abilities are not fixed, and that we can grow in many ways, including to become more positive, courageous and resilient, especially when put in positions outside of our respective comfort zones.

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 Saklad

Chief Operations Officer

Orrick

Laura 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 Ingersoll

Chief Investment Officer

Americas Direct Real Estate Strategies

CBRE Investment Management

Julie 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.

ABOUT THIS WEEK'S GUESTS:

Marc Ganzi

CEO

DigitalBridge

Marc C. Ganzi is the Chief Executive Officer at DigitalBridge and has been an investor and operator in the digital infrastructure sector for more than 25 years. Marc has led DigitalBridge’s transformation to become a leading global manager of digital infrastructure, managing over $70 billion in assets under management across the digital ecosystem, including cell towers, data centers, fiber, small cells and edge infrastructure.   

Pat Lynch

Global Head of CBRE Data Center Solutions

Pat Lynch, Executive Managing Director for CBRE’s Data Center Solutions, acts as an advisor, advocate and partner in navigating the dynamic technology needs for his clients. Pat and his team of professionals develop custom mission-critical strategies that address specific industry challenges and help meet business objectives. Through creative problem solving and transaction structuring, clients experience improved reliability and expense management, and operational efficiencies.

KEY TAKEAWAYS:

1. Digital infrastructure is an estimated $13 trillion market, according to DigitalBridge CEO Marc Ganzi; leasing and licensing agreements for fiber space resemble real estate leases.
2. Demand for data centers is significantly outstripping supply, creating opportunities for expansion in emerging domestic and international markets.
3. The industry is grappling with sustainability issues, particularly the effects of heavy power and water usage. This is driving a focus on renewable resources.
4. Ganzi notes the next big trend in digital infrastructure could be network virtualization, moving toward software-defined infrastructure. One manifestation of this is the growth of private clouds, where organizations have better security and control than in the public cloud.

ABOUT THIS WEEK'S GUESTS

GENE SEROKA is the Executive Director of the Port of Los Angeles, the busiest container port in North America. Confirmed by Los Angeles City Council in June 2014, the Port has experienced a series of historic, record-breaking performances since his appointment. Since the pandemic-induced buying surge generated by American consumers in the second half of 2020, the Port of Los Angeles has eclipsed multiple monthly cargo records and recorded eight out of 10 highest-performing quarters in its 115-year history. The Port set two new milestones for the Western Hemisphere in June 2021 as the first port to process 10 million Twenty-Foot Equivalent Units (TEUs) in a 12-month period and in May 2021 the first port to process 1 million TEUs in a single month. Seroka received the esteemed Stanley T. Olafson Award from the Los Angeles Area Chamber of Commerce in 2023, recognizing his work in the world trade industry and leadership of the nation’s busiest container port.

BARBARA MELVIN is the sixth leader in the history of the port and the first woman to lead a top 10 U.S. operating container port. During her more than 20 years with SC Ports, Melvin has held several senior leadership positions, including senior vice president of operations and terminals; senior vice president of external affairs; and vice president of government relations. In addition to overseeing numerous infrastructure projects, Melvin served as the lead staff person on the Charleston Harbor Deepening Project, which is on track to being the deepest harbor on the East Coast at 52 feet this year.

Commercial Real Estate insights at https://www.cbre.com/TheWeeklyTake