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The Future of Office – “What’s the Vibe?”

While touring with a client recently, many times the “vibe check” question came up in conversation. From the east side to downtown, the question remained, “What type of vibe are you looking for?” You may wonder what a vibe check is. In this instance, vibe check references the kind of energy occupiers want their employees to feel in their office space. Does an easy, laid back and walkable scenario mesh well with your company values, or does a clean and modern high rise situation align better? With the “War for Talent” upon us, office users have learned, “It’s not so much about the rent, rates and service charge anymore, it’s the story that a building can tell, if that fits the values of that

organization, which is more important.” If you want to attract and retain talent, occupiers must focus on value fit, test fit, and energy fit.

https://www.bisnow.com/london/news/office/tearing-up-the-office-playbook-in-4-moves-115653?utm_content=buffer23db6&utm_medium=social&utm_source=linkedin.com&utm_campaign=buffer

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US GDP Growth Rate – 2022 Data and 2023

The US economy grew an annualized 2.6% on quarter in Q3 2022, beating forecasts of a 2.4% rise and rebounding from a contraction in the first half of the year. With a dip in GDP growth in Q2 and a huge jump in Q3 partnered with aggressive policy tightening, is it feasible to avoid a recession? What are your thoughts? 

https://tradingeconomics.com/united-states/gdp-growth?utm_content=buffer33243&utm_medium=social&utm_source=linkedin.com&utm_campaign=buffer

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Atlanta 2022 Construction Outlook

According to the Wall Street Journal demand for industrial commercial property is cooling. The Atlanta market industrial construction study by Cushman & Wakefield shows rapid leasing (and pre-leasing) activity and indicates a total market drop in industrial vacancy from 7.1% to 3.2% despite delivery delays and supply chain constraints. 

https://buff.ly/3haE0nu

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Employers and Employees Agree on Post-Pandemic Return to Office

Office is not dead…it’s just different. A new report shows that 72% of respondents say they would renew their lease if it were up today, up from 38% in 2021. Even if you are not a collaborative worker, feeling the energy and perspectives of others is vital to production and performance. The workforce is reimagining what office looks like and how space will be utilized in the future, but it will never disappear entirely. Just like humanity, it will simply evolve. 

https://www.prnewswire.com/news-releases/new-report-employers-and-employees-agree-on-post-pandemic-return-to-office-301642234.html?utm_content=buffer9b5d2&utm_medium=social&utm_source=linkedin.com&utm_campaign=buffer

 

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Fed Approves 0.75-point Hike to Take Rates to Highest Since 2008

What an interesting time we are in. The unanticipated and unprecedented pandemic has created quite the slippery slope starting with the “Great Resignation” which slid into the “War for Talent.” With two job opportunities available for every candidate, healthy salaries are abundant which leads to increased spending and a hot economy. The Fed has approved yet another rate hike with a few more anticipated through the remainder of 2022 and through 2023 to cool us down.

There are economic signs of recession but there are also contradictory indicators. Who knows what the future looks like! The cost of short-term borrowing will only continue to increase and The Fed will reward long-term investors and savers. Typically it is always better to earn a dollar today than tomorrow, however we are nowhere near net-zero. My advice – stop spending and start saving. That dollar will be bigger and more beautiful in the future if we continue on this trajectory.

https://cnb.cx/3zDg9TJ

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Top Challenges and Priorities CFOs Face in 2022

A new survey of the top challenges CFOs face suggests that almost half of the respondents believe the “recession” will only last 2 years. While CFOs are concerned with developing strategies to mitigate rising costs, talent acquisition and retention, cash flow, supply chain issues, and technology upgrades, the dominant takeaway is CFOs are overall optimistic about growth initiatives despite the seemingly endless challenges they are currently facing. Read on to learn more.

https://www.cfo.com/budgeting-planning/strategy-budgeting-planning/2022/08/challenges-inflation-recession-hiring-labor-technology-supply-chain-data-automation/

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The CFO Conundrum – Can Companies Afford their Workforce?

“The Great Resignation” and “The War for Talent” have elevated the unemployment rate in the U.S. to 3.5%. CFOs are being challenged by expensive talent and their demands for flexibility. The need for talent is great, but how are companies planning to sustain this new normal? What are your thoughts?

https://www.cfo.com/strategy/2022/08/labor-shortage-finance-skills-demand-annual-survey/

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CRE Magic Minute – Episode #2

We are still feeling the impact of the recession although it began in March of 2020, triggered by COVID-19.  After economic activity had collapsed at a record pace in Q2, it rebounded almost as sharply in Q3. By the fourth quarter, the pace of recovery had slowed some and performance was still not at pre-recession levels.  As 2020 unfolded, we saw a sharp increase in the amount of sublease space available in the office market. Compared to the end of 2019, with 62.6 MSF of sublease space on the market, the volume of such space had nearly doubled to 111.9 MSF only one year later—the largest amount of sublease space available since Q3 2003.  Asking rents are likely to decline in the next few quarters as owners face pressure from a rising volume of flex space. It is anticipated that it will be a couple of years before national rental rates begin to appreciate again in the aggregate.  

 

 

 

 

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CRE Magic Minute – Episode #1

The commercial real estate market continues to recover, but sales, leasing, and construction activity remain below year-ago levels. The recovery also remains uneven.  There is stronger investor interest for land, multifamily, and industrial properties than for hotels, retail, and office properties. On a year-over-year basis, sales declined by 1% in the fourth quarter of 2020 but they declined 5% in the second quarter. Leasing volume fell by 1% annually but 4% in the second quarter. Construction activity was down by 3% annually and 6% in the second quarter. The risk spread which are cap rates less 10-year T-bond, remain elevated at 6% compared to 4% prior to the pandemic.