Return-Path: Delivered-To: andrew@sterlingcal.com Received: from reseller401.webserversystems.com by reseller401.webserversystems.com with LMTP id UPnlApF8Imfq9gwAchKAPA (envelope-from ) for ; Wed, 30 Oct 2024 13:36:01 -0500 Return-path: Envelope-to: andrew@sterlingcal.com Delivery-date: Wed, 30 Oct 2024 13:36:01 -0500 Received: from wfbtbtpz.outbound-mail.sendgrid.net ([159.183.183.62]:5678) by reseller401.webserversystems.com with esmtps (TLS1.2) tls TLS_ECDHE_RSA_WITH_AES_128_GCM_SHA256 (Exim 4.96.2) (envelope-from ) id 1t6DY0-003aDX-0l for andrew@sterlingcal.com; Wed, 30 Oct 2024 13:36:00 -0500 DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=jefftaborgroup.com; h=content-type:from:mime-version:subject:to:cc:content-type:from: subject:to; s=s1; bh=QLCn62lbDoFOc+cnlJEsG7OjEtHDUIZtRB1XTioTVuE=; b=ofnj5MoliHCEZFAiqaxmoXCWRpdNsNTe+aHb1p0vZ+x3VRBEh2qyMndQAKimZ5nPJip2 +em5ZrWJB561EhhPEvEAVxfsyaj4HnPmHnwCL1qT+W/AfYcl5gw7vt9Bjk8NA0LySFqyUl lK3dqW0c+9fko2LBtQlt6SijKEKfNoY8t41WKbvuSlUY/w+18ZwZtxzqQcXposy+4KCbuY +cdP5ApY+wGZRhUhYDE6bq8MpqTt7vv5LnjrmYehm0lmux0Ql//n8Zdxnhnydbp83bAEEE /9iQ+rXaqUzaiwbujKfzZ9UIvVmQ18hGtmgfvVTEYQLInISPtG4Tttx/HnDreM0g== Received: by recvd-5577bcb48c-9lhpr with SMTP id recvd-5577bcb48c-9lhpr-1-67227C81-B 2024-10-30 18:35:45.157736008 +0000 UTC m=+4149502.575833326 Received: from MjEzMTA1MDQ (unknown) by geopod-ismtpd-38 (SG) with HTTP id mujSv8ejQMq0b4WvC1HOsw for ; Wed, 30 Oct 2024 18:35:45.142 +0000 (UTC) Content-Type: multipart/alternative; boundary=bb75a300f442c3dbb58ac689b71dee497f5f69312cf64015ca7af6a471ad Date: Wed, 30 Oct 2024 18:35:49 +0000 (UTC) From: Jeff Tabor Mime-Version: 1.0 Subject: Today's Wall Street Journal Message-ID: X-SG-EID: =?us-ascii?Q?u001=2E6XgS+aMGExnB1bqZZrdrz9qzQEbZ7BEjpKh5guDijZ5HYu1dYAKq1tDEG?= =?us-ascii?Q?Tygo2l3bpRSrRRtQO=2FYwkK2RsxQ5Goe8qxKd4sU?= =?us-ascii?Q?2akXLLDkLcgag0Ihw7s+vZfcPW7pianVqNAKXgz?= =?us-ascii?Q?ahu1ka3OMPFqiGLGrBOC4c=2FNXfeUml4ITXczwNR?= =?us-ascii?Q?H3upsRX7xHkEAehHl=2Fob6twV3PMwhEdkbw=2FFopn?= =?us-ascii?Q?dyjv3WPdUCpQEitgv6Mkt7JXFyhh1Q+8No7FWf5?= =?us-ascii?Q?jDXA?= X-SG-ID: =?us-ascii?Q?u001=2ESdBcvi+Evd=2FbQef8eZF3BnJg0DL+f4INLEFgdrhYnIyTO1ggutFioHU5M?= =?us-ascii?Q?5NJocTriTbjgI2UytK1n7hlRFhe6BFIzr2sS6gp?= =?us-ascii?Q?=2Fe4F6SX9WZOpKII3PbCICUIB5pw8j0n5l2h4N5x?= =?us-ascii?Q?ngqzRpXrIt5w0CA=3D=3D?= To: Andrew Sterling X-Entity-ID: u001.hZHiB6kKM9UW5e2fAO4iNQ== X-Spam-Status: No, score=-4.4 X-Spam-Score: -43 X-Spam-Bar: ---- X-Spam-Flag: NO --bb75a300f442c3dbb58ac689b71dee497f5f69312cf64015ca7af6a471ad Content-Transfer-Encoding: quoted-printable Content-Type: text/plain; charset=iso-8859-1 Mime-Version: 1.0

=20

Good morning, Andrew. See = below….in today’s WSJ….

Also in the s= ame edition today there is an article about Starbuck’s management&hel= lip;.stating to their employees: “Work in the office or else!”<= br>
It remains a great time to be a tenant!

Sincerely,=

Jeffrey A. Tabor &ndash= ; Founder/CEO
Jeff@JeffTaborGroup.com
JeffTaborGroup.com
(800) 507-6673
RE License # 010= 15287

Connect with me on LinkedIn: Jeffrey A. Tabor

<= /span>

Bosses Are Calling Wor= kers Back to the Office. That’s Good News for Landlords.

Office market shows signs of stabilizing as one-third of com= panies require workers in five days a week

<= br>America’s historic retreat from the office building may finall= y be winding down.

More companies are backing away from the looser w= orkplace policies they adopted during the early years of the pandemic as ex= ecutives increasingly recommit to promoting an office culture.

Amazo= n called corporate staffers back to the office five days a week last month.= The company is now looking for a big block of expansion space in Manhattan= , according to brokers.

Dell Technologies said it is requiring its g= lobal sales team to work from company offices full time. 3M’s new chi= ef executive last week said the company expected higher attendance from sen= ior employees at the company’s headquarters and other large sites.
One-third of all companies required workers to be in the office five d= ays a week in the third quarter, up from 31% in the second quarter, accordi= ng to Flex Index, which tracks workplace strategies.

That terminated= a streak over the previous five quarters when that rate had steadily falle= n. One reason for that decline was because low unemployment gave employees = leverage when pressing for more remote work. Now, the white-collar workforc= e isn’t growing as much, shifting the balance of power back to manage= rs.

No one sees workplaces ret= urning to prepandemic patterns, but most believe the worst is likely over f= or the office sector.

“We looked like we were on a path that w= e were going to see a drop continue quarter after quarter,” said Rob = Sadow, chief executive of Flex Index. “All of a sudden in the third q= uarter we saw a shift in direction.”

These signs of stabilizat= ion hardly signal an end to office-market turmoil.

The vacancy rate = is stabilizing at a near record level of 13.8%, up from 9.4% in the fourth = quarter in 2019. Since the second quarter of 2020, U.S. office tenants have= vacated close to 209 million square feet of space, the highest amount ever= for a four-and-half-year period, according to data firm CoStar Group.
<= br>A lot of the current empty office space is now considered obsolete. It m= ay never be filled.

Defaults and other missed payments also continue= to rise. In September, the delinquency rate of office loans converted into= securities increased to 8.36%, the highest rate since November 2013, accor= ding to data firm Trepp.

Banks, which have been reporting third-quar= ter earnings, say problems with distressed office loans greatly eclipse dif= ficulties with other types of commercial property that are struggling prima= rily because of high interest rates.

“The real issue is office= ,” KeyCorp Chief Executive Chris Gorman said in an interview, referri= ng to the commercial-property industry in general.

What’s more= , leases for about 40% of the office space tenanted at the beginning of the= pandemic haven’t yet matured, according to CoStar. When they do, man= y of those tenants are expected to shed space.

“The winding do= wn is not over,” said Phil Mobley, CoStar’s national director o= f office analytics.

Still, after eight consecutive quarters of contr= action in office space, the amount of occupied office space essentially sta= yed flat during the second and third quarters, CoStar said.

<= span style=3D'font-family: "Times New Roman", Times, serif; font-size: 15px= ;'>

In = New York, vacancy is falling thanks in part to expanding financial-services= firms such as Citadel, Ares Management and Blue Owl Capital. Artificial-in= telligence firms, which have been one of the few bright spots in San Franci= sco’s hard-hit office market, have begun to lease space in other mark= ets, such as Denver, Atlanta and Seattle.

&l= dquo;The trend in the last four years was: I’m doing the bare minimum= ,” said Elizabeth Hart, Newmark Group’s president of leasing fo= r North America. Now, she says, companies are looking beyond their home bas= e.

“In the last six months, you= ’re seeing people starting in one geography expanding into others,&rd= quo; she said.

Companies that offer s= pace with gyms, outdoor decks and fine-dining restaurants in their properti= es say these amenities are luring workers back to their desks.

HSBC Bank, which in 2022 leased about 270,000 squ= are feet for its U.S. headquarters in a new Manhattan development named The= Spiral, added an additional 35,000 square feet this year partly because em= ployee attendance soared to 80% from less than 40% at its old space.=

“It was clear that we needed more spa= ce almost immediately,” a spokeswoman said.

Investors are noticing the shift in market psychology. In Octo= ber, developer Tishman Speyer completed a $3.5 billion refinancing of a rev= italized Rockefeller Center, the largest issuance ever for a single office = asset. That paves the way for other owners of other well-leased office prop= erties to follow, analysts said.

&ldq= uo;Demand in the market [from bond buyers] was not only rising but unsatisf= ied,” said Rob Speyer, chief executive of the firm. That interest per= suaded him to refinance in August, even though the debt on the building was= n’t maturing until the middle of next year.

While the volume of office-building sales remains tepid, inves= tor interest in distressed office properties has been rising after prices h= ave tumbled. Real-estate firm Eastdil Secured this year has completed 18 of= fice sales valued at $2.6 billion led by lenders disposing of assets, accor= ding to people familiar with the matter. That compares with three of these = kinds of sales at this time last year, the people said.

“Things are looking better from a valuation perspective of the o= ffice sector than they ever have,” said Dylan Burzinski at real-estat= e analytics firm Green Street.

Jeff Tabor Group=A0| 501 W. Broadway, Suite 800= =A0| San Diego=A0| CA | 92101

Unsubs= cribe | =20

--bb75a300f442c3dbb58ac689b71dee497f5f69312cf64015ca7af6a471ad Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset=iso-8859-1 Mime-Version: 1.0

=20

Jeffr= ey A. Tabor – Founder/CEO
Jeff@JeffTaborGr= oup.com
JeffTaborGroup.com
(800) 507-6673
RE = License # 01015287

Connect with me on LinkedIn: Jeffrey A. Tabor<= /span>

<= /p>
Bosses Are Calling Workers Back to the= Office. That’s Good News for Landlords.

O= ffice market shows signs of stabilizing as one-third of companies require w= orkers in five days a week

America’s historic retreat from the office= building may finally be winding down.

More companies are backing aw= ay from the looser workplace policies they adopted during the early years o= f the pandemic as executives increasingly recommit to promoting an office c= ulture.

Amazon called corporate staffers back to the office five day= s a week last month. The company is now looking for a big block of expansio= n space in Manhattan, according to brokers.

Dell Technologies said i= t is requiring its global sales team to work from company offices full time= . 3M’s new chief executive last week said the company expected higher= attendance from senior employees at the company’s headquarters and o= ther large sites.

One-third of all companies required workers to be = in the office five days a week in the third quarter, up from 31% in the sec= ond quarter, according to Flex Index, which tracks workplace strategies.
That terminated a streak over the previous five quarters when that rat= e had steadily fallen. One reason for that decline was because low unemploy= ment gave employees leverage when pressing for more remote work. Now, the w= hite-collar workforce isn’t growing as much, shifting the balance of = power back to managers.

No one sees workplaces returning to prepandemic patt= erns, but most believe the worst is likely over for the office sector.
<= br>“We looked like we were on a path that we were going to see a drop= continue quarter after quarter,” said Rob Sadow, chief executive of = Flex Index. “All of a sudden in the third quarter we saw a shift in d= irection.”

These signs of stabilization hardly signal an end t= o office-market turmoil.

The vacancy rate is stabilizing at a near r= ecord level of 13.8%, up from 9.4% in the fourth quarter in 2019. Since the= second quarter of 2020, U.S. office tenants have vacated close to 209 mill= ion square feet of space, the highest amount ever for a four-and-half-year = period, according to data firm CoStar Group.

A lot of the current em= pty office space is now considered obsolete. It may never be filled.
Defaults and other missed payments also continue to rise. In September, th= e delinquency rate of office loans converted into securities increased to 8= .36%, the highest rate since November 2013, according to data firm Trepp.
Banks, which have been reporting third-quarter earnings, say problems= with distressed office loans greatly eclipse difficulties with other types= of commercial property that are struggling primarily because of high inter= est rates.

“The real issue is office,” KeyCorp Chief Exe= cutive Chris Gorman said in an interview, referring to the commercial-prope= rty industry in general.

What’s more, leases for about 40% of = the office space tenanted at the beginning of the pandemic haven’t ye= t matured, according to CoStar. When they do, many of those tenants are exp= ected to shed space.

“The winding down is not over,” sai= d Phil Mobley, CoStar’s national director of office analytics.
Still, after eight consecutive quarters of contraction in office space, th= e amount of occupied office space essentially stayed flat during the second= and third quarters, CoStar said.

“Things are looking better from a valuation perspective of = the office sector than they ever have,” said Dylan Burzinski at real-= estate analytics firm Green Street.

Jeff Tabor Group=A0| 501 W. Broadway, Suite 800= =A0| San Diego=A0| CA | 92101

Unsub= scribe | =20

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