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. Returning to the office: Employees who show up in person often get ahead faster

What if people who work in an office perform better than people who work from home? What if they get promoted more quickly and receive larger, more frequent pay raises? And what if all this happens not because bosses are irrationally biased against remote workers, but because employees in the office do better work?

Haltingly, perhaps awkwardly, the working world is about to embark on a gigantic natural experiment that will test those hypotheses. Much is riding on the outcome. High-profile CEOs—notably Goldman Sachs’s David Solomon, dean of the bring-’em-back-to-the-office school, and Facebook’s Mark Zuckerberg, champion of the let-’em-stay-home faction—may be proved wise or foolish. But going in, it must be said—and many people won’t like this—that the pro-office argument has a lot going for it.

Proponents of WFH often claim that remote workers are more productive than office workers, but that’s far from clear. Some research supports the claim; other research refutes it. A Fortune survey in June found that 45% of U.S. workers who are partially or fully remote said they’re more productive at home; 55% said they’re equally (40%) or less productive (15%).

2. Commercial Real Estate Prices Have Surpassed Pre-Covid Levels

U.S. commercial real estate property values overall have surpassed their pre-pandemic rates.

Green Street’s commercial property price index, which is determined by the net asset values of properties owned by real estate investment trusts, hit 137 last month, 1.3% above where the index sat in February 2020.

“With interest rates as low as they are, private equity shops flush with capital, and many REITs in the bidding tent as well, further price gains are expected,” Green Street co-Head of Strategic Research Peter Rothemund said in a statement.

July’s prices were up 14% up year-over-year and 2.4% higher than they were in June. Before last month, February 2020 had the highest index since at least 1998, according to Green Street.

3. Mall Giant David Simon: ‘Physical Retail Is Here to Stay’

David Simon continues to be the ultimate brick-and-mortar believer — and is more invested than ever.

The mall giant, who leads Simon Property Group as chairman, chief executive officer and president, held court on a conference call with analysts on Monday after turning in stronger second-quarter results.

Simon said the lockdown lease fights with most retailers have died down and that the company is moving forward — shoppers are out and spending despite rising COVID-19 cases, new properties are being developed and new tenants are ready to move in.

Like the rest of fashion and the world, the real estate company is still recovering after more than a year of the coronavirus. But while brands of all shapes and sizes shift their focus to driving more digital sales, Simon is making his case for the store loud and clear.

4. U.S. Import Surge Overwhelms Warehouse Space Near Ports

Surging demand for warehousing close to major ports driven by the growth of e-commerce and the flood of container imports hitting U.S. shores is making storage space harder to fi nd and more expensive, adding new stresses to already strained supply chains.

Logistics service providers and real-estate firms say competition for warehouses close to ports such as those in Southern California and New York City is intense, pushing up rents and forcing companies to look to neighboring regions to serve shippers’ needs.

The pinch is most pronounced in the industrial region close to the nation’s busiest ports at Los Angeles and Long Beach. “You can literally count on your hand at best how many spaces are available in that entire region,” said Carl DeLuca, head of real estate in the Americas for DHL Supply Chain, a unit of global logistics giant Deutsche Post AG.

5. Apartment Rents Increase as Young Workers Head Back to Cities

Apartment rents are rising fast, boosted by young professionals returning to cities and an expensive housing market that keeps many of them renting.

Stock prices of publicly traded apartment companies have jumped in stride. The FTSE Nareit Equity Apartments index, which tracks these landlords, is up 42% since January, trouncing the S&P 500’s 17% gain during the same period.

Median rent has risen more than 10% over the past year $1,244, according to homesearch website Apartment List. That figure is also 9.4% above where rents stood in March 2020, right before Covid-19 lockdowns began.

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

Ken Ashley