Bookmarks: 5 Interesting Articles That May Help You This Week

Each week, I select a few articles that rise above the fray and hopefully help you on your journey in the CRE world. They pull from one of four "corners": corporate real estate, technology, management science and anything positive. I welcome your comments on these articles.

1. Amazon Bets on Office-Based Work With Expansion in Major Cities

Amazon.com Inc. is expanding its physical offices in six U.S. cities and adding thousands of corporate jobs in those areas, an indication the tech giant is making long-term plans around office work even as other companies embrace lasting remote employment.

“The ability to connect with people, the ability for teams to work together in an ad hoc fashion—you can do it virtually, but it isn’t as spontaneous,” said Ardine Williams, vice president of workforce development at Amazon. “We are looking forward to returning to the office.”

Amazon’s move to expand its footprint in various cities and set expectations for a return to the office contrasts with other major technology companies that have implemented remote work and predicted it will last long after the coronavirus pandemic.

2. Walmart sees 'remarkable shift' as shopper spending per visit surges 27%

Walmart is seeing dramatic changes in how consumers are shopping amid the pandemic.

The company reported Tuesday that its sales soared in the second quarter compared to last year, with same-store sales rising 9.3% and ecommerce sales nearly doubling.

The major drivers behind the sales boost came from shoppers spending stimulus funds on groceries and household goods, as they spent more time at home, Walmart executives said.

The data further shows a shift in how customers are planning and executing their shopping trips.

3. Target Sales Jump as Pandemic Speeds E-Commerce Shift

The coronavirus pandemic has widened the gap between retail’s winners and losers, boosting the fortunes of big U.S. chains that were able to stay open throughout the pandemic and feed America’s basic needs.

The evidence was stark this week as national retailers revealed they were exiting the summer months heading in different directions. On Wednesday, Target Corp. reported the strongest quarterly sales growth in its history, while Lowe’s Cos.’ sales growth was the strongest in decades. Meanwhile, chains like Kohl’s Corp. and T.J. Maxx that had to temporarily shut their doors posted sharp sales declines.

Like rival Walmart Inc., Target has benefited as coronavirus concerns fueled demand for services that let shoppers pick up goods in parking lots or skip trips to the store. Both companies also sell groceries and other household staples that have been in demand as Americans cook and clean more in their homes.

4. Hungry CRE Investors Building Huge War Chests

In July, the number of signed confidentiality agreements between potential buyers and sellers was down 17% compared with the same month in 2019, reports CBRE Deal Flow, the company's digital marketing platform for property sales. That compares with a 74% drop in April and May.

Though such agreements are only a step toward a final sale, a recovering volume points to preliminary investor interest in property deals.

The number of confidentiality agreements signed during the second quarter of 2020 was 40% of the average total for the previous two years, with agreements involving industrial and multifamily properties more likely to be signed than any other property type. Investors also asked for lower prices, CBRE reported, as they expect values to decline by as much as 20% by the end of 2020.

5. $2T in Goods Flow Through Prologis Warehouse Facilities

A new report estimates that an economic value of $2.2 trillion in goods flow through Prologis facilities worldwide.

The “Future Flow of Goods” study from independent advisory firm Oxford Economics commissioned by the logistics real estate company comes at a time when some consumers are relying more heavily on e-commerce amid the COVID-19 pandemic.

“This study shows just how critical logistics real estate is to the vitality of the global economy,” said Prologis chairman and CEO Hamid R. Moghadam in a statement. “Every day, Prologis sees many of the goods that make modern life possible flow through our distribution centers, which in turn underscores the interconnected nature of global trade.”

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

Ken Ashley