Cushman & Wakefield CEO Brett White offered a positive long-term outlook for the commercial real estate market on Friday and told CNBC it expected a booming economy to compensate for companies reducing their office needs due to remote working.
“When we think about the close proximity, we see a 10 to 15% reduction in the demand for office space,” White said in an interview on on “Close the 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 recent remarks of Jamie Dimon, the chairman and managing director of JPMorgan Chase. In his Annual letter to the bank’s shareholdersDimon said JPMorgan will 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 in business comes about more people are being vaccinated against the coronavirus. This is seen as a critical step Bring employees back to the officeAt least part-time, after the pandemic led to widespread acceptance of remote work in white-collar professions 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 introducing more flexible work policies, such as Facebook The signed leases for additional space.
“Several dynamics are driving the commercial real estate market,” said White, an industry veteran who was CEO of CBRE from 2005 to 2012. “Right now we have less space due to Covid and a different way of working … but we also have this economy that is now absolutely returning 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 earnings in the first quarter on May 6th.