Outdoor amenity spaces will be central to enhancing the experiences of office users in a post-COVID-19 world in which requirements for fresh air, distancing and minimal contact of shared surfaces will all be elevated.
A trio of real estate professionals addressed the shift in the functionality of common areas in office buildings as part of a webinar titled “Why Experience is the Next Big Office Amenity.” Urban Land Institute (ULI), a research and advocacy organization for the commerc
Simon Property Group (NYSE: SPG) has terminated its Feb. 9 merger agreement with Taubman Centers Inc. (NYSE: TCO). Simon also filed an action today in Michigan’s Oakland County Circuit Court saying Taubman breached the covenants in the merger agreement. Under the terms of the agreement, Simon was to acquire an 80 percent interest in Taubman for approximately $3.6 billion.
Indianapolis-based Simon says its termination of the merger agreement is based on two separate grounds. “First, the COVID-19 pandemic has had a uniquely material and disproportionate effect on Taubman compared with other participants in the retail real estate industry,” according to a statement from Simon. “Second, in the wake of the pandemic, Taubman has breached its obligations, which are conditions to closing, relating to the operation of its business.”
“Is office space going the way of retail in five years? That’s what investors are really trying to understand,” said James Farrar, CEO of real estate investment trust City Office REIT. What was once a land grab for downtown real estate to attract millennials could pivot to be rush to the suburbs, where space is plentiful and social distancing is much easier to enforce.
Twenty-seven percent of adults in the U.S. are considering moving homes because of the Covid-19 crisis, according to a survey by the International Council of Shopping Centers, which surveyed 1,004 people over a 3-day period from May 22 to May 24. But an even greater 43% of millennials, within that group, are considering a move, the survey found. Many are looking to the suburbs and rural towns, it said.
Meantime, new recommendations from the Centers for Disease Control and Prevention on safe ways for employers to reopen their offices say, among a number of measures: Workers should commute alone (no subways); desks should be positioned 6 feet apart; communal coffee pots and snack machines should be replaced with single-serve options; and windows should be opened to try to help regulate air flow. And the CDC is also recommending elevator use be limited, which is a bit problematic for high-rise office buildings.
Skyrocketing unemployment has prompted millions of young adults to move back in with their parents. Zillow is further reporting that the potential rent lost from Gen Z alone could total an estimated $726 million monthly, and the ripple effects of their next move could have far-reaching consequences for the housing market. That represents about 1.4% of the rental market at risk. It is highly unlikely that all leases will be broken and this full amount would go unpaid, but it serves as a gauge of the potential impact on housing.The number of adults living in a parent’s or grandparent’s home grew by more than 2.7 million in March and April, nearly triple the next-largest two-month increase from the past five years. A large majority of those who moved home – about 2.2 million – are from Generation Z, and between 18 and 25 years old.
COVID-19 lockdown and social distancing strategies have led to a huge increase in the number of people working at home (working remotely). According to Gallup, by mid-April, 62% of US employees were working at home. Further, Gallup found that about half of the remote workers preferred to continue working from home, with another quarter interested in remote working out of pandemic fears.
Software developers are highly paid, with a national median salary of $107,500. Silicon Valley software developer salaries are the highest. In the San Jose metropolitan area (Santa Clara and San Benito counties), software developers had a 2019 median salary of $141,600, according to US Department of Labor Bureau of Labor Statistics (BLS) data. In the San Francisco metropolitan area (Alameda, Contra Costa, Marin, San Francisco and San Mateo counties) the median salary for software developers was $141,000. This is considerably higher than the national median software developer salary of $107,500. Among the 107 metropolitan areas with 500,000 or greater population, only one (Seattle) is less than $20,000 below the two in Silicon Valley metropolitan areas (Figure 1).
But in the Silicon Valley, the purchasing power of the high salaries is effectively discounted by 40% or more by hyper-inflated costs of living. (Figure 2). In both San Jose and San Francisco the purchasing power of software developer salaries is well below the national median. When adjusted for purchasing power, only one of the metropolitan areas among the top 10 in nominal salary remains in the top ten (Seattle)
As the world reopens, the Great American Move that John Burns Real Estate Consulting projected on May 8 has begun! The housing industry is benefiting from the movement, and below are some of the opportunities.