Callahan Capital Partners Commercial Office Digest

Commercial Office Digest

Callahan Capital Partners is a real estate private equity firm and operator focused exclusively on the origination, acquisition and management of high quality office assets in select urban markets throughout the United States.

“In a KPMG survey of 400 U.S. CEOs released this week, nearly 80% said that they expected corporate employees to be in offices full time within the next three years. That’s more than double the 34% who said so in April. “

Amazon’s decision to bring employees back to the office 5 days a week is being closely watched by company leaders as they determine what to do about office policy heading into 2025 with a tougher labor market shifting the balance of power from employees to employers. The Wall Street Journal reports on this topic here.

“87% of companies will RTO by 2025, and 64% say they already have.”

Per a survey conducted by ResumeBuilder.com in August of 764 companies that moved to a fully remove model during the pandemic, 87% of these companies expect to return to office (“RTO”) in 2025. According to companies that have implemented an RTO policy, the most significant improvements from RTO were seen in employee relationships (77%), followed by worker productivity (69%), company culture (70%), revenue (61%), and worker retention (54%).

“If supply remains muted for an extended period of time and demand recovers, that combination could translate to a pretty robust recovery across office markets over the next couple of years”

Brookfield executives said they expect the office market to rebound in a big way as it benefits from record-low construction rates and decreased supply. Read more here.

“To increase office attendance, companies will need to offer employees top-notch amenities both in and around the workplace, boosting demand in the most desirable and accessible submarkets.”

Charts We Are Talking About

JLL reports that US leasing volume was 19% greater year over year as of Q2 2024. The increased leasing is likely contributed to a brighter economic outlook and the continued stabilization of hybrid work policies.

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