The FORT Podcast: Spencer Levy
Spencer Levy is Chairman of Americas Research and Senior Economic Advisor for CBRE. He plays an integral role in the development and implementation of the global research strategy and business plan.
On this episode, Spencer and Chris discuss what COVID has done across multiple asset classes and markets and why he’s bullish on cities like New York, San Francisco, and Los Angeles. They also talk office and retail, Spencer’s 2021 predictions, interest rate environments, technologies that are coming in the near future that will massively impact real estate, and more. Enjoy!
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(02:28) – Spencer’s Background and Business Career
(03:44) – How does research funnel up at CBRE?
(05:33) – Were you seeing COVID and its implications before the rest of the USA? Did something, in particular, stand out to you?
(07:21) – As it stands today, what pops out at you in your research that we should be thinking about in the US in terms of opportunities and challenges?
(09:22) – COVID Vaccines and Their Effect on Short Term Thinking
(10:23) – Is there an indicator that people are heading back to the office?
(13:32) – What stands out to you in retail?
(16:01) – Is there any hope for the regional mall?
(17:52) – Are you expecting to see a distressed market or will we skip it entirely?
(20:22) – What does your research tell you about the supposed exodus of major cities like LA, NYC, and SF?
(22:14) – Does any of this exodus have to do with the extremism of governmental response to COVID?
(24:52) – What are some overlooked markets across the US that will be robust cities in the near future?
(27:39) – Is there a technology we will see over the next decade that will be transformational?
(29:27) – What are the impacts of self-driving cars when it comes to real estate values?
(31:04) – How do they affect parking garages in downtown areas?
(32:45) – What are some of the major impacts the new white house administration will have on CRE?
(34:48) – Are we going to be in a low rate environment for quite a while?
(36:42) – What are some data points to look at when scoping the viability of a new market?
(40:00) – Do you have any comments on data centers and their demand?
(42:48) – What does responsive real estate mean?
(44:30) – What are your predictions for 2021?
(45:33) – Do you have a morning routine?
(46:38) – What is the best advice you’ve ever received?
(47:48) – Is there a book that has had a significant impact on you?
(49:08) – Places to Learn More About CBRE
Episode Summary
Bringing to the table a wealth of experience and a distinctive perspective, Levy intricately wove through topics ranging from investment paradigms and demographic dynamics to technological innovations and sustainability within the industry.
In the initial stages of the conversation, Levy underscored a pivotal shift in the real estate investment arena, particularly emphasizing the evolution witnessed in operational real estate. He shed light on the traditionally observed disparity in the pricing of operational real estate and the established asset classes, attributing it to the intrinsic operational complexities and inherent risks associated with the former. The dialogue navigated through the nuances of hotel cap rates and their historical pricing trends, offering insights into the underlying dynamics and industry transformations that have contributed to a convergence in pricing across diverse real estate forms.
As the discussion progressed, attention was accorded to the concept of “Alpha,” demystifying its significance and application within the real estate investment framework. Levy provided a meticulous exposition of investment strategies, highlighting the imperative of aligning investments with prevailing market movements and economic indicators to optimize returns and mitigate risks. The dialogue seamlessly transitioned into an exploration of risk management strategies within the realm of real estate investment, elucidating the strategic implications of the “portfolio effect” and the necessity of diversifying investments to safeguard against market volatilities.
The conversation also ventured into the sphere of demographic impacts on real estate, with Levy exploring the intrinsic relationship between demographic shifts and market demand. The emphasis was placed on the strategic alignment of investments with demographic trends, ensuring that portfolios are resilient to demographic and economic shifts, thereby enhancing their viability and returns in the long term.
Technological advancements and their influence on the corporate real estate landscape also surfaced as a focal point of the discussion. Levy explored the transformative impact of technology on workspace dynamics, illuminating the progressive shifts towards more adaptive and technologically integrated work environments. The dialogue offered insights into the emerging paradigms of remote working and technological integrations, exploring the strategic responses and adaptations of corporations in navigating the evolving demands of the contemporary real estate milieu.
A segment of the conversation was dedicated to exploring the concept of “Space as a Service” and its manifold applications within modern real estate. Levy provided a detailed exploration of the evolving demands of businesses and employees, focusing on how flexible and adaptive workspaces, underpinned by a “Space as a Service” model, are strategically aligning with these shifting paradigms, thereby fostering operational efficiency and adaptability.
Data utilization and technology integration within the real estate sector were also brought to the forefront, with the dialogue providing a panoramic view of the applications and implications of data analytics and technological integrations. Levy emphasized the pivotal role of data-driven strategies in enhancing decision-making, strategic planning, and operational efficiency within the real estate sector, highlighting their emerging significance in navigating the complexities and dynamism of the modern real estate market.
In the concluding segments, sustainability and its integrative role within the real estate sector were explored, with Levy elucidating on the transition of sustainability from a supplementary feature to a core component in real estate development, investment, and operational strategies. He underscored the evolving perspectives towards sustainability, highlighting its growing influence on investment dynamics, operational paradigms, and market demands, and emphasizing its centrality in shaping the future trajectory of the real estate sector.
The FORT with Chris Powers is produced by Straight Up Podcasts