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. Most Billionaires Don’t Think Employees Will Stay Fully Remote, Forbes Survey Shows

Elon Musk touched a nerve last week when he said he would be requiring all Tesla employees to return to the office for at least 40 hours a week—or leave the company. The strong stance from the world’s richest person sparked a firestorm of reactions, including from Australian billionaire Scott Farquhar, the cofounder and CEO of software giant Atlassian, who blasted Musk’s mandate as “something out of the 1950s.”

“The whole public debate revealed a wide discrepancy in how business leaders are viewing the future of work. Some billionaire-led companies like Dropbox, headed by Drew Houston, have sold off much of their office space and given employees the option to work remotely forever; Twitter, which Musk has been toying with buying, announced in March its employees will have the same choice. Others are following a hybrid model, including Apple, which is led by Tim Cook and is currently requiring its employees to appear in the office twice a week.”

As it turns out, most billionaires think companies either go back to all in-person or remain hybrid, with at least some in-person time. We surveyed 65 of the world’s richest people and found just over half (52%) believe “hybrid” models that allow employees to mix in-person and remote work will be the way of the future compared to 45% who think most employees will return to offices physically. Just 3% say work will end up being predominantly remote.

2. Why Now Might Be the Best Time to Look for New Office Space

Many companies are sitting on their hands while figuring out how much office space they will actually need in a hybrid work environment.  But commercial real estate brokers say that landlords are willing to make good deals now as the market slowly recovers.

“While lease vacancy rates aren’t expected to return to the 30-year average of 15 percent until at least 2026, according to insights from real estate market research firm CBRE, leasing activity is picking up—totaling 45.8 million square feet, up over 26 percent from last year. Additionally, average gross asking rent increased by 1.2 percent to $35.10 per square foot. The improvement in office demand will be greatest in markets hardest hit during the downturn, including parts of Manhattan, Chicago, Seattle, and Dallas. ”

Though the market is getting more competitive, many companies are still hesitant, not wanting to waste time, effort, and resources on making large changes without more certain projections into when, and how many, employees will return to the office full time, says Julie Whelan, global head of occupier thought leadership at CBRE.

3. Return To Work Experience: The Reimagining Of The Office As A Destination

For the first time in recent history, work was intentionally decoupled from the traditional office. As the pandemic enters its third year, the longer impacts – supply chain issues, labor shortages and inflation – are driving competition as the world learns to live with some form of the virus for the foreseeable future.

“Design has offered innovative solutions to confront these tough new realities, and the resiliency demonstrated across industries has created a roadmap for how to move forward. Here we are faced with an opportunity to experiment and rethink the physical workplace to offer fluid, unique and meaningful experiences that can attract and retain top talent, whether that’s through new technologies or new types of spaces.”

Here in Austin, we’re seeing an unprecedented influx of workers from all over the world, creating a unique opportunity to design for and contribute to a rapidly growing city. As companies, developers and landlords look to optimize their real estate portfolios, the experience they deliver to tenants and employees will be a key differentiator.

4. Amazon To Delay Opening Of Multiple Fulfillment Centers

Amazon is delaying the opening of multiple fulfillment centers as the company continues to slow its industrial growth.

“The e-commerce giant has postponed fulfillment center openings in Iowa, Texas and Tennessee in the past two months, attributing the delays to slower-than-anticipated growth and supply chain issues, GlobeSt reported, citing multiple local media reports.”

A five-story warehouse in Davenport, Iowa, that was scheduled to open in September has now been delayed until 2024, an Amazon spokesperson told a local television station. Another fulfillment center in Alcoa, Tennessee, had its opening delayed from last month to June 2023. A $200M fulfillment center in San Antonio's East Side neighborhood has also been delayed.

5. From Walmart to Gap, Which Retailers Have the Most Excess Inventory?

Target Corp. TGT -3.57%▼ warned Tuesday that its profit would drop because it needs to cancel orders with vendors or offer discounts to clear out unwanted goods.

“The announcement was the latest sign that many big retailers are struggling to match supply with demand, as inflation squeezes shoppers and more discretionary spending shifts to travel and entertainment. Many of these chains had benefited during the pandemic, when shoppers used ample savings and stimulus checks to stock up on goods.”

Beyond the big-box stores, clothing retailers are also stuck with items they don’t want.

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