The Weekly Take from CBRE

Two international experts—Pro-invest Group’s Sabine Schaffer and CBRE’s Stuart McCann—unpack the fundamentals and investment appeal behind co-living.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.

Greg Juceam, President and CEO of Extended Stay America, shares his insights on the booming extended-stay hotel industry. He discusses the resilient investment potential in secondary markets and the operational efficiencies that simplify management. Juceam emphasizes ESA's unique growth model, blending ownership and franchising for scalability. The conversation also touches on how trends like remote work and healthcare-driven demand are shaping the need for long-term accommodations, making extended stays an appealing alternative to traditional hotels.

Brendan Wallace, Co-founder and CEO of Fifth Wall, and Connor Hall, Head of Global Digital Partnerships at CBRE, dive deep into the future of commercial real estate tech. They discuss the high risks and rewards in PropTech investing and how early access to innovations can boost asset performance. AI emerges as a game-changer for underwriting and risk modeling, offering a competitive edge. They also touch on market volatility affecting IPOs and highlight that the best PropTech companies tackle real industry challenges.

Lisa Russo, Head of Construction at the Community Preservation Corporation, and Damian Watch, Vice President at PGM Real Estate, share their insights on commercial construction risks. They discuss the impact of volatile interest rates and tariffs, emphasizing the need for detailed contract reviews. Strategies for risk mitigation, such as early material procurement and increased contingencies, are explored. Labor challenges are highlighted, especially in affordable housing, amidst ongoing market volatility and innovative financing solutions.

David Welch, CEO of Robinson Weeks Partners, specializes in industrial real estate, while Chris Riley, Vice Chair of CBRE, is making a strategic shift to join Welch's firm. They dive into the booming impact of e-commerce on industrial growth, alongside the challenges brought by rapid development. Key topics include the potential of transforming former military sites and the importance of modern building designs. They also discuss site selection factors such as transportation access and local regulations, emphasizing the need for flexibility in this evolving landscape.

In this bonus episode, CBRE's new Global Head of Research, Dr. Henry Chin, discusses the current outlook for commercial real estate for both occupiers and investors. 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.

Galvanize Climate Solutions’ Joe Sumberg and CBRE Chief Sustainability Officer Rob Bernard share insights on achieving high returns through sustainable investment strategies. ·     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.

David Friedman and Jared Friedman, both leaders in the Friedman Real Estate Group, join David Shostak, CEO of Shostak Brothers & Company, to discuss the intricacies of leading family-run businesses. They delve into the critical role of succession planning and establishing governance for smooth leadership transitions. The trio shares insights on balancing family dynamics with business operations, the need for adaptability during economic challenges, and fostering longevity in multi-generational ventures through collaboration and strategic decision-making.

Esther Choy, Founder and CEO of Leadership Story Lab and author of "Let the Story Do the Work," dives into the transformative power of storytelling in business. She reveals the 'IRS' model to craft engaging narratives and highlights the emotional connections that make messages memorable. By sharing personal rituals and examples from leaders, Esther showcases how effective tales can enhance influence and decision-making. Her insights emphasize the human touch in communication, making storytelling an essential tool for professionals.

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.