Brett White, CEO of Cushman & Wakefield, on Friday gave a positive long-term outlook for the commercial real estate market, telling CNBC he expected a booming economy to compensate for companies reducing their office needs due to remote working.
“If we think about the close proximity … we see a 10 to 15% reduction in the demand for office space,” White said in an interview with Closing Bell.
“But it’s important to remember that over the next two to three years this will be completely mitigated by the job creation that the US economy and the world economy will create,” added White, who directs the global commercial Real estate company since 2015.
White’s comments on Friday came in response to a question about recent remarks by Jamie Dimon, chairman and chief executive officer of JPMorgan Chase. In his annual letter to the bank’s shareholders, Dimon said JPMorgan would introduce more open seating arrangements in its offices, among other adjustments related to the Covid pandemic.
“As a result, we may only need 60 seats for an average of 100 employees. This will significantly reduce our real estate needs,” wrote Dimon in the letter, which also discussed what he sees as the benefits of being based in the EU office and shortcomings in remote working.
Dimon’s insight into how the country’s largest bank by assets is thinking about Covid-related changes to its business comes as more people are vaccinated against the coronavirus. This is seen as a crucial step in getting employees back into the office, at least part-time, after the pandemic led to widespread adoption of remote working in white-collar jobs last year.
The pandemic will continue to affect the commercial real estate market in 2021 and through 2022, White said. He noted, however, that while some companies are reducing their office needs by adopting more flexible work policies, there are companies like Facebook that have signed leases for additional space.
“The commercial real estate market is driven by a variety of dynamics,” said White, an industry veteran who was CBRE CEO from 2005 to 2012. .. but then we also have this economy, which is now absolutely roaring back and creating new jobs. “
“So, yes, you will see buildings that have more vacant space this year and probably next year than they have in a long time,” he added. “But in the meantime, two to three years, this space should be taken again.”
Cushman & Wakefield’s shares rose 1.26% on Friday, trading at nearly $ 17 apiece. The stock is up 14.23% since the beginning of the year. The Chicago-based company is expected to post a profit for the first quarter on May 6th.