Spencer Levy, Americas head of research at CBRE, joined REIT.com for a video interview at REITWise 2016: NAREIT’s Law, Accounting and Finance Conference at the Marriott Marquis in Washington, D.C.
Levy spoke at REITWise 2016 on the state of the real estate markets. One of the most important trends among “big occupiers” in the commercial real estate market today is talent acquisition, according to Levy.
In addition to seeking out the best talent on the employment side, companies are also looking strategically at how to get close to their customers, he added. While talent may be concentrated in the major metropolitan areas, acquiring customers is a more complex analysis, Levy said. Very often, those customers are found in secondary or suburban markets, depending upon the industry. Levy pointed to the health care industry as a prime example of this trend.
Taking a broader look at the state of the commercial real estate market, Levy pointed out that a dynamic exists between fundamentals and sentiment “that could go either way.” Market volatility in early February underscored this precariousness, Levy noted.
“This fear factor is still the thing that I worry about the most,” Levy said.
Levy also discussed the impact of demographics during the course of the next decade.
“Demographics are either a time bomb or an opportunity, depending upon how you look at it,” he said.
In an international context, demographics are a problem for many Western countries and also countries in Asia, notably Japan and China, according to Levy. In Europe, Germany is suffering from an aging population, and part of the reason why it has absorbed a large number of refugees is to fix that problem, Levy explained.
“In the United States, the demographic opportunity may be in suburban and secondary markets because a disproportionate number of older folks live in those markets and use certain types of services,” Levy added. In addition to opportunities for the health care sector in these markets, Levy added that branch banking is also likely to benefit.