The Weekly Take from CBRE

In this engaging discussion, Adam Grant, a Wharton organizational psychologist and New York Times-bestselling author, shares powerful strategies for innovative decision-making. He emphasizes the importance of cultivating a 'challenge network' for honest feedback and promotes the idea of pre-mortems to foresee potential failures. Grant also advocates for humor and humility in leadership, along with the pursuit of 'better practices' over 'best practices.' Listeners will discover valuable insights on navigating doubt, fostering curiosity, and encouraging open dialogue in organizations.

Jessica Harrison leads Transactions and Capital Markets at Manulife, transforming it into a private equity investor, while Kevin Aussef heads CBRE's investment properties in the U.S. They discuss the increasing momentum in real estate capital markets and the narrowing gap between buyer and seller expectations. Key focus areas include the lift in alternative asset classes like affordable housing and industrial storage, along with the impact of AI on investment decisions. They share insights on achieving higher returns in a recalibrated market landscape.

We explore Chicago's vibrant real estate scene with CIBC’s Karen Case and CBRE’s Lisa Konieczka. They discuss market dynamics, Fulton Market's emergence and transformation, and ongoing capital markets challenges and opportunities.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.

Two self-storage experts—Merit Hill Capital’s Liz Schlesinger and CBRE’s Nick Walker—discuss the sector's strong long-term fundamentals and near-term challenges facing this resilient asset class, including a tepid housing market.Share these insights about the self-storage industry fundamentals: Operators understand the customer: Self-storage customers prioritize proximity and convenience over amenities.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.The housing market impacts demand: Investors should be aware of the potential risks and opportunities associated with housing market fluctuations.Operational expertise required: Self-storage relies heavily on operational expertise to maximize returns.

Ray Washburne, an accomplished investor, shares his insights into the shifting trends in cities and retail. He discusses the critical role local restaurants play in shaping urban identity and how consumer behavior is bifurcating between luxury and value segments. Ray also highlights the growing demand for modern office amenities, while many older buildings face demolition due to high conversion costs. Urban revitalization is on the rise, yet he warns of economic caution with sticky inflation and consumer debt impacting future investments.

Henry Bott, President of Swire Properties USA, has shaped Miami's real estate landscape for decades. Troy Ballard serves as Vice Chairman in CBRE’s multifamily practice, specializing in Florida's market. Together, they discuss Miami's rapid growth and its appeal to international investors. The demand for luxury housing, exemplified by the Residences at Mandarin Oriental, is on the rise. They also examine the changing demographics in Brickell and explore adaptive re-use opportunities in the softening office market.

Stoneshield Capital’s Juan Pepa and CBRE's Adolfo Ramirez-Escudero discuss Spain's economic renaissance, which has engendered bountiful investment opportunities.Share these insights about investment opportunities in Spain: 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.Focus on alternative real estate sectors: Some of Spain’s strongest sectors are student housing, life sciences and seniors housing.Renewable energy is in demand: Interest in energy and sustainable infrastructure, particularly around data centers and the industrial sectors, is high.Big pharma has a big presence: A consolidation of big pharma companies makes the region attractive for life sciences investment.It’s a business-friendly environment: Incentive programs and a supportive regulatory environment has drawn inbound capital.

This week we shine a spotlight on San Francisco, a market that is showing increasing signs of shaking off the post-pandemic doldrums. Listen to a wide-ranging discussion as The Bay Area Council's Jim Wunderman and CBRE's Joe Wallace explore the growing impact of AI on local economy and real estate market,  opportunities across sectors, public-private collaborations and the city's budding revival.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.

Jamie Hodari, CEO of CBRE's Building Operations & Experience and Industrious, discusses the transformative power of workplace experience. He highlights how enhancing space can deepen tenant attraction and boost employee satisfaction. Hodari emphasizes the importance of AI in interpreting data for better operations and the shift towards vibrant urban environments that support hybrid work. He notes the evolving finance industry’s need to adapt to operational real estate, urging a focus on quality spaces that enrich people’s lives.

Greg Juceam, President and CEO of Extended Stay America, shares his expertise on the rising extended-stay hotel sector. He highlights the investment potential in secondary markets and the operational simplicity of these accommodations. Juceam discusses the benefits of ownership combined with franchising, supporting scalable growth. He also touches on the diverse demand from construction crews to digital nomads, predicting stable occupancy. Finally, he delves into strategic expansions and the impact of mega trends reshaping the industry.