The Weekly Take from CBRE

Henry Chin, Global Head of Research at CBRE, shares valuable insights on the future of the commercial real estate market. He predicts a 10% increase in U.S. investment activity in 2025, citing recovery signs in office leasing and a rebound in demand. Industrial spaces are becoming vital, with a focus on modern facilities near consumers. Meanwhile, retail availability remains tight and rents in the multifamily sector are set to grow, particularly in the Midwest and Pacific Northwest. Opportunities in data centers and credit markets also emerge for savvy investors.

Entrepreneurs Sam Fox, a 10-time James Beard Award semi-finalist and founder of Fox Restaurant Concepts, and Brian Frakes, president of Common Bond Development Group, share insights on hospitality investments in Phoenix. They discuss how hospitality-led development reshapes urban real estate, with restaurants and hotels acting as vital traffic anchors. The duo highlights Phoenix's growth as a diverse market and emphasizes the importance of operational control for enhancing guest experiences. They also address evolving investment strategies that prioritize experience and adaptability in a post-COVID landscape.

Steve Skinner, CEO of HB Reavis, Simon Brown, Head of UK Office Research at CBRE, and Alastair Perks, Executive Director at CBRE, dive into the transformation of European real estate. They discuss the shift from new builds to adaptive reuse, emphasizing sustainability and urban renewal. Urban revitalization challenges in London and the post-pandemic retail recovery are examined, along with the resilience of office spaces in the UK market. The trio also highlights emerging opportunities in healthcare and student housing, illustrating vibrant growth amid economic changes.

Raimondo Amabile, Co-CEO of PGIM Real Estate and a visionary behind the innovative Real Asset X lab, discusses the transformative impact of AI on real estate investing. He explores how sustainability and operational efficiency are reshaping asset management, with AI optimizing building systems for energy savings. Amabile also highlights shifts in investor focus toward Europe and Asia, the significance of tech-enabled value creation, and the evolving nature of asset valuation with sustainability at its core. It's a glimpse into the future of real estate investment.

Mike Byrne, Chief Investment Officer at AEW Capital Management, and Tom Traynor, Vice Chairman at CBRE, dive into today's real estate investment climate. They discuss how investors can mitigate risks and seize opportunities amidst geopolitical shifts and economic changes. The conversation highlights the rising interest in high-quality office assets and the improving landscape for debt capital. They also emphasize the importance of technology and AI in investment strategies, advocating for flexibility in adapting to local market demands.

In this discussion, Nick Montgomery, Global Head of Real Estate for Schroder's Capital, and Lee Bruce, CBRE's executive director, dive into the rebounding U.K. real estate market. They highlight how AI is revolutionizing valuations and investment strategies. The duo also emphasizes the sharp divide in the office market, where premium spaces thrive while lower-grade assets struggle. Sustainability emerges as a key driver for investors, favoring green buildings. International confidence resurfaces, particularly from Asia and Australia, signaling a bright future for U.K. real estate.

In this engaging discussion, Jack Cox, Managing Director at CBRE, and Robert Dobrzycki, CEO of Panattoni Europe, dive into the evolving landscape of the European logistics market. They highlight the surge in demand from e-commerce and 3PLs, along with the critical role of operational expertise, especially in urban settings. The pair talks about the growing potential of data centers and contrasts the fragmented European market with that of the U.S., noting the impact of geopolitical changes and technology on investment opportunities.

Nick Firth, CIO of Industrial Outdoor Ventures, Brian Fumara, Vice Chair at CBRE, and Miles Harndon, CBRE Vice President, delve into the dynamic world of Industrial Outdoor Storage. They discuss the impressive sub-3% vacancy rates and the strong demand for existing storage sites driven by zoning challenges. The trio highlights how IOS is becoming a hot target for major investors, paralleling trends in self-storage. They also explore the impact of electrification and logistics tech reshaping the sector, showcasing IOS's vital role in modern supply chains.

Macquarie Group’s Andrew Burdick pulls the curtain back on the company’s newly reimagined Americas headquarters in Midtown Manhattan. Burdick and CBRE’s Lenny Beaudoin discuss how design, flexibility and sustainability can converge to create spaces that foster innovation, support company culture and drive long-term value.·     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.

CEO John Santora discusses WeWork’s revival, and its focus on real estate fundamentals, disciplined growth and delivering flexible, hospitality-driven office solutions worldwide. ·     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.