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

Each month, 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. Cuts at Amazon, Other Tech Companies Don’t Spell Recession Yet

Amazon.com Inc.’s halt to construction of a new headquarters, on top of a parade of high-profile tech layoffs, looks ominous for the economy. But the damage will need to spread much further to signal full-blown recession.

“When the U.S. has entered recession in the past, weakness has often started in one sector and then spread like brushfire, pulling down a widening array of industries and the people who work in them.”

Downturns in 2001 and 2007-09 were apt examples. The deflated internet and telecommunications bubble in the early 2000s and then the mortgage and housing crunch of the mid-2000s emanated outward, damaging financial companies, consumer spending and business investment. That ultimately led to economywide recessions and widespread layoffs.

2. Amazon Delays Construction Of HQ2 In Northern Virginia

Amazon has put on ice plans for a 3.2M SF expansion of its second headquarters in Arlington, Virginia.

“As the Seattle-based tech giant has continued its aggressive cost-cutting campaign, it no longer expects to start construction as planned on Phase 2 of Amazon HQ2, dubbed PenPlace, the company confirmed in a statement.”

The project calls for three 22-story office buildings and a signature Helix tower in the Pentagon City neighborhood, which was rebranded as National Landing as part of Arlington's bid for Amazon's headquarters. The company received approval for the project in April.

3. Salesforce Deepens Real Estate Cuts, Offloading Space in Namesake San Francisco Tower

Salesforce is making good on its promise to aggressively cut its real estate footprint in its pursuit of more profitable growth, putting another chunk of space on the sublease market as it reduces its stake in a high-profile office tower.

“The San Francisco-based tech giant, the world’s biggest maker of software to manage sales leads, confirmed it has listed six floors, or about 125,000 square feet, at Salesforce Tower in downtown San Francisco.”

The company has enlisted help from CBRE to market the offices, which brings the total amount of space Salesforce is looking to offload in the city to more than 1 million square feet.

4. Companies Still Want Office Space, But They Also Want To Stay Nimble

U.S. businesses are looking to add office space this year, but their planning is more short-term than it used to be, according to a new survey by software specialist Visual Lease of 200 senior corporate real estate executives at companies with more than 1,000 workers.

“Seventy percent of respondents said their businesses are looking to add space this year, but 88% are planning for their space needs a year or less in advance. A year ago, 35% of respondents reported planning their company’s spaces with the same short timeline in mind.”

The survey's results highlight a fundamental shift in tenant thinking in the aftermath of the worst of the pandemic. Namely, senior corporate real estate executives now identify the ability to sublease, as well as having flexible lease termination as an option, as key needs when negotiating leases.

5. As Americans Work From Home, Europeans and Asians Head Back to the Office

While U.S. offices are half empty three years into the Covid-19 pandemic, workplaces in Europe and Asia are bustling again.

“Americans have embraced remote work and turned their backs on offices with greater regularity than their counterparts overseas. U.S. office occupancy stands at 40% to 60% of prepandemic levels, varying within that range by month and by city. That compares with a 70%-to-90% rate in Europe and the Middle East, according to JLL, a property-services firm that manages 4.6 billion square feet of real estate globally. ”

Return to office was even more common in Asia, JLL said, where rates ranged from 80% to 110%—meaning that in some cities more people are in the office nowadays than before the pandemic.

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