Innovation in Office Sector Only Going to Accelerate Post-COVID

07/30/20 • 19 min

The innovation trend that emerged in the office sector prior to the coronavirus is only going to accelerate as organizations adapt to changes in how workplaces operate in a post-pandemic environment, according to Julie Whelan, head of occupier research for the Americas at CBRE.
Whelan told the REIT Report July 24 that innovation will be accelerated in large part by the success of the remote work model during the crisis. “The office is now becoming just one place among a network of locations where work gets done, so of course the role of it is going to accordingly change,” she said.
Prior to COVID, organizations were moving to models that were less hierarchical, less routine- driven, and more project-driven—all of which requires collaboration, Whelan said. Going forward, the conflict between the need for collaboration and increased remote working will spur innovation in terms of the tools and technology that are used every day, and how physical workspaces tie the physical and digital together to drive seamless interaction, she noted.

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Housing Data Point to Economy’s Underlying Strength, Assuming Continued Reopening

The economy continued to rebound in June, according to housing market data released last week, although the outlook depends on the reopening continuing on its current path—an open question at this point, Nareit Senior Economist Calvin Schnure said.
Speaking July 27 on the Nareit REIT Report, Schnure highlighted the jump in new and existing June home sales, with new home sales actually higher than they were a year ago. He said this suggests that the underlying economic demand “is intact as long as it’s safe to go out and go about our business.” Although house prices were a bit soft, as indicated by the Case-Shiller index, on balance the data point to “a reasonably strong housing market as we’re coming out of the shutdown,” he noted.
Meanwhile, Schnure noted that jobless claims numbers out last week may have been misinterpreted as more negative than they actually were, as a result of confusion over seasonal factors. “This is really not sending a signal of growing weakness in the job market,” he said.

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Real Estate Deal Activity Falls in First Half; Recovery Possible by Q4: PwC

The total value and volume of real estate deals across all property sectors declined in the first half of the year compared to the previous six months, but activity is expected to recover by the fourth quarter, according to Tim Bodner, partner and U.S. real estate deals leader at PwC.
PwC recently released its mid-year review of real estate deal activity that showed almost a 50% decline in deal value and volume in the first half of 2020 compared with the second half of 2019.
While the declines occurred across the board, Bodner noted that on a six-month basis, logistics was the only sector that experienced a year-over-year increase. In the first half of 2020, about $42 billion of logistics activity occurred versus $34 billion in the first half of 2019, he noted.