The Weekly Take from CBRE

Diane Hoskins, Global co-chair of Gensler, dives into the evolution of workplace design. She highlights the shift from rigid office layouts to flexible spaces, tailored for diverse organizational cultures. Destination workplaces are on the rise, aimed at attracting talent and fostering collaboration. AI is transforming architectural practices, enabling rapid design iterations. Diane also discusses the importance of reflecting local culture in office environments and how investing in high-quality spaces can yield long-term value.

Henry Chin, the Global Head of Research at CBRE, analyzes the surprising strength of Q3 investment activity in commercial real estate. He discusses why U.S. real estate is primed for investment opportunities as fundamentals improve. Retail and office sectors are highlighted as attractive, with positive leasing trends. Chin emphasizes value-add strategies for A-/B+ office spaces and examines the evolution of alternative assets into institutional staples. He also forecasts a strong market recovery, projecting double-digit growth by 2026.

In this conversation with Dr. Jean Twenge, a psychology expert, listeners explore how generational differences shape the modern workplace. She discusses lasting impacts of technology on communication and work culture, highlighting how Gen Z's entry is redefining leadership. Delayed life milestones, like marriage, are changing real estate demand, prompting a shift towards adaptable living spaces. Empathy emerges as a vital tool for building cohesive teams, along with embracing hybrid work models that cater to diverse preferences.

Sam Conniff, author of Be More Pirate and founder of the Uncertainty Experts Project, dives into how pirate-inspired leadership can revolutionize business strategies. He discusses leveraging uncertainty as a catalyst for innovation and the importance of emotional intelligence in today's workplace. Conniff critiques traditional corporate norms, emphasizing shared values and agency. He also highlights how fear, when managed, can lead to connection and action, urging leaders to challenge complacency to unlock true workplace potential.

Andrew Jones, CEO of London Metric Property, and Franco Sidoli, Executive VP at CBRE, delve into the evolving landscape of UK REITs. They explore how triple-net leases provide income stability, highlight the booming sectors of urban logistics and convenience retail, and discuss the rising interest in smaller lot sizes from family offices. They also assess the impact of M&A on scalability, investor demand amidst changing market conditions, and the potential of retail environments reshaped by e-commerce trends. A must-listen for anyone intrigued by real estate dynamics!

John Lippmann, Head of U.S. Real Estate Capital Markets at Barings, and Elisabeth Troni, Portfolio Manager for CBRE Investment Management, dive into the evolving landscape of core funds. They explore how alternatives like data centers and seniors housing are increasingly reshaping portfolios. The conversation highlights the importance of operational expertise and the strategic advantages found in emerging secondary markets. They also discuss the need for flexible fund structures to navigate market cycles and maximize returns.

MetLife Investment Management’s Sara Queen and CBRE’s Tommy Lee explore the shifting dynamics of commercial real estate investing. They offer seasoned insight on a range of topics, from NYC office to data centers to build-to-rent residential and much more.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.

Christian Perez-Geis, an industrial broker and director at CBRE El Paso/Ciudad Juárez office, shares insights on the evolving industrial landscape along the U.S.-Mexico border. He discusses the rise of nearshoring and the renewed twin-plant model, emphasizing their impact on manufacturing and logistics. The booming demand for automation-ready facilities and the strategic growth of cities like Laredo and El Paso signal significant investment opportunities. Competition for labor and the emergence of a new North-South supply chain archetype are reshaping market dynamics.

CBL Properties’ Stephen Lebovitz and CBRE’s Rich Frolik explain how malls are being transformed into high-performing, mixed-use assets. From casinos and hotels to pickleball and movie theaters, malls are evolving to meet modern demand.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.

Join Teddy Kaplan, President and CEO of NetLease Strategy at New Mountain Capital, and Will Pike, President of U.S. Industrial and Logistics Capital Markets at CBRE, as they delve into the booming world of net lease investments. They discuss how this hybrid asset class is gaining traction among institutional investors, especially in volatile markets. Topics include the emergence of manufacturing facilities as solid assets, the strategic use of sale-leasebacks, and the nuances of geographic valuations—highlighting the critical blend of real estate fundamentals and tenant quality.