The Weekly Take from CBRE

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.

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.