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. Simple Pleasures

We’ve had a little bit going on, haven’t we? An intense focus on struggle and crisis can have a deep effect on one’s psyche. Just ask the street cop on a tough beat or a firefighter at a busy house that deals with the depths of human misery every day.

As I write this, I sit on my back deck overlooking a nice sunset, birds chirping and all apparently well in the world. Only it isn’t. There are people suffering from sickness and sweltering economic issues. Business are failing and sadness pervades our land like a morning fog rolling on and on.

But what are we to do? Worry and anxiety are destructive emotions that lead to nowhere. If you are reading this, then you are a leader and we have a responsibility to get our own heads and hearts straight. Then we can become helpful to those closest to us. And to those who will become close. Now is a time to make friends of former acquaintances and to draw in deeply to relationships.

As George Burns said once, “If you ask what is the single most important key to longevity, I would have to say it is avoiding worry, stress and tension. And if you didn’t ask me, I’d still have to say it.”

2. Microsoft CEO Satya Nadella warns about the consequences of embracing remote work permanently

GeekWire Photo / Kevin Lisota

Microsoft is not taking the same financial beating as many of its peers due to the pandemic. Revenue jumped 15% in the first quarter of 2020, Microsoft Teams users increased by more than 70% in April, and the company’s stock price is up 14% this year.

But financials aren’t everything to Microsoft CEO Satya Nadella. He is still concerned about the changes to work that the coronavirus crisis is forcing. Nadella spoke with the staff of the New York Times this week about the challenges he’s navigating as Microsoft’s leader.

“What I miss is when you walk into a physical meeting, you are talking to the person that is next to you, you’re able to connect with them for the two minutes before and after,” he said.

3. Survey indicates that small businesses are optimistic despite COVID-19

Though Facebook CEO Mark Zuckerberg is running amuck in the political world like one of those signs at restaurants that say “unattended children will be given ice cream and a puppy,” Facebook continues to effectively build an online community of more than 2.6 billion people worldwide – including more than half of the population in the United States. Given their audience and ease of access to business owners, they decided to use their powers for good for once to survey small and medium businesses.

The survey returned responses from 38,078 business owners and managers, 39,104 employees, and 8,694 personal enterprises in the United States (total of 85,876 respondents). Respondents’ industries spanned manufacturing, retail, services, logistics, hospitality, construction, and agriculture. Thirty-three percent of businesses were urban, forty-two percent were urban, and twenty-five percent were rural.

Here’s where it gets depressing: thirty-one percent of businesses reported closing in the last three months, with 71 percent of those closing since March 1. For personal businesses, 52 percent are closed. Of those businesses still operating, 60 percent reported a reduced workload, and 60 percent also report struggling with finances. Employee wages, bills, and rent were the top areas of financial concern.

4. CRE Economists Think Current Recession Won't Be as Bad as the 2008 Crisis

Nearly 40 real estate economists and analysts feel the COVID-19 recession will impact real estate markets and values less severely than the 2008 financial crisis—except for retail and hotel real estate.

The economists predicted there will be a $275 billion decrease in real estate transaction volumes in 2020, according to a survey in May by the Urban Land Institute. But they expected transaction volumes to rise over the next two years, which would create a healthier capital market compared to the 2008 Great Recession.

“Real estate economists expect that while the top-line economic impact of COVID-19 will be much worse than the global financial crisis, US real estate market fundamentals and values will fare much better,” said William Maher, a leading member of the Urban Land Institute, in prepared remarks. “Only retail and hotel are expected to suffer a worse outcome.”

5. For Economy, Worst of Coronavirus Shutdowns May Be Over

PHOTO: CHRISTOPHER DOLAN/THE TIMES-TRIBUNE/ASSOCIATED PRESS

Truck loads are growing again. Air travel and hotel bookings are up slightly. Mortgage applications are rising. And more people are applying to open new businesses.

These are among some early signs the U.S. economy is, ever so slowly, creeping back to life.

Plenty of data show the country was still mired in a severe downturn in April and May, with overall business activity falling and layoffs rising—though more slowly than in the early weeks of the coronavirus crisis. Current projections have the economy contracting by 6% to 7% this year and unemployment lingering in double-digit percentages for a while. But, for the first time since the pandemic forced widespread U.S. business closures in March, it appears conditions in some corners of the economy aren’t getting worse, and might even be improving.

“If this is the only wave [of coronavirus], it looks like we’ve bottomed out and the normalization process has begun,” said Beth Ann Bovino, U.S. chief economist at S&P Global Ratings.

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