Power Reads: 5 Interesting Articles That Will Help You This Week

Each week, I select a few articles that rise above the fray and hopefully help you on your journey in leadership and the CRE world. They pull from one of four "corners": corporate real estate, technology, management science and anything positive. Each day we can become a better version of ourselves.

1. Manhattan office leasing up 60% in Q3

The pandemic-driven downturn in Manhattan’s office market hit an inflection point in the third quarter, with demand finally exceeding supply.

Leasing volume from July to September jumped to a total of 7.23 million square feet, up by 58.8 percent compared to the second quarter. With that, the quarterly net absorption turned positive — for the first time in two years — at 0.87 million square feet, according to Colliers International’s quarterly market report.

Franklin Wallach, Colliers’ senior managing director of research in New York, called this moment the “critical milestone” in the market’s post-pandemic recovery. But he also cautioned the market still faces a long road to recovery.

2. New Office Product Continues To Outperform Even As Sector Shifts

Despite a rise in hybrid work arrangements, the physical office is here to stay – and data captured over the course of the pandemic reveal that occupiers are choosing newer, better Class A product as they decide where to put down stakes. 

“The physical office will continue to have some role to play in the future of work,” Cushman & Wakefield economist Rebecca Rockey says in a new report outlining the future of the sector across the country. “And although there are a myriad of occupiers with vastly different needs, we know that newer, better quality office product, which usually outperforms, did so to a greater degree during the pandemic. And that trend is expected to stick.”

Historically, Class A office product has outperformed, whether during expansions or recessions or within CBD or suburban submarkets. And during prior expansions, Rockey says, Class A office product accounted for a “disproportionate amount” of absorption relative to other product types, clocking in at a growth rate of 1.7 times its share of inventory. After the Dot Com bust, Class A office accounted for 61.6% of all absorption and 35.7% of the inventory and after the Great Financial Crisis (GFC), these shares were 78.4% and 45.0% respectively, she says.

3. Boston Office Absorption Turns Positive As Lab Conversions Take Space Offline

Tech and life sciences firms flocking to Class-A office space powered Boston's office market to record its first quarter of positive absorption since the onset of the coronavirus pandemic.

The market recorded 307K SF of positive absorption in Q3 — meaning tenants took up more space than they vacated across the market — after a total of 5.5M SF of negative absorption amassed over the past six quarters, according to Colliers research. 

“The first signs of recovery are emerging,” Colliers Research Director of U.S. Capital Markets Aaron Jodka said. “Then we expect a strong Q4 largely because of the commitments that were done years ago on under-construction buildings.”

4. 6 Questions to Ask About Covid and Air Quality at Work

Whether you’ve already returned to your workplace or will be heading back to the office eventually, it’s a good idea to ask what steps your employer has taken to improve indoor air quality.

The more time we spend indoors with other people, the more likely we are to breathe each other’s exhaled air — and germs. The vast majority of scientists now agree that the coronavirus is airborne, and infectious droplets can linger in the air, float around the room or build up in spaces with poor air flow, like conference rooms.

Early in the pandemic, a coronavirus outbreak on the 11th floor of an office building in South Korea showed how just one infectious person can increase the risk for everyone in a workplace. Out of 216 people on the floor, 94 were infected. Most of the infected worked in rows of desks grouped on one side of the office.

5. Tesla To Relocate Headquarters to Austin, Texas, From California

Electric vehicle maker Tesla is moving its corporate headquarters from Palo Alto, California, to Austin, Texas, becoming just the latest West Coast company to pick a new home with no state income tax and a relatively low cost of doing business.

Tesla CEO Elon Musk made the announcement at the company's shareholder meeting Thursday in Austin, where the company is building a major $1.1 billion manufacturing plant.

Musk told shareholders that there was "a limit to how big you can scale in the Bay Area," with it being tough for people to afford homes and employees having to come into the area from far away, as reported by CNBC.

Your success blesses others. I wish you a great and hugely impactful week!