Nelson Mills, president and CEO of Columbia Property Trust (NYSE: CXP), joined REIT.com for a CEO Spotlight video interview at REITWorld 2016: NAREIT’s Annual Convention for All Things REIT at the JW Marriott Phoenix Desert Ridge.
Mills said millennials continue to impact the office sector.
“There’s rigorous competition for millennial talent, and that shapes the location of the space and configuration,” Mills noted, when speaking on the leasing requirements of tenants.
“We’re definitely seeing that impact our decision on the investment front and the leasing front in a big way,” he added.
Columbia’s portfolio is primarily focused on San Francisco, New York and Washington, D.C. Both New York and San Francisco had “incredibly strong” leasing fundamentals in 2014 and 2015, followed by “a bit of a cooling” in 2016, according to Mills. However, “they are still two of the strongest markets in the country,” he noted.
Washington, on the other hand, has been soft in recent years, “but we’ve seen new life come to that market in terms of leasing demand and absorption of supply,” Mills said.
“We’re very encouraged about the prospects going forward,” he added.
In terms of design trends, Mills said employers are seeking a balance of flexible work space, privacy and increased density.