Stateof the

Industry

U.S. EconomyYear-End 2015 Forecast

• GDP – 2.6%• Interest rates – 10-year Treasury notes to 2.4%• Inflation – 1%• Unemployment – 5.1%• Retail sales growth – Flat (3.9% growth)

Source: The Kiplinger Letter 5/22/2015

U.S. Office Market

• Vacancy at 15.6% and projected to go below 15% by year-end• Leasing activity increased by 2.0% dominated by

expansionary transactions• Drivers are technology, followed by banking and finance• STEM-based sectors comprised 35% of leasing volume

in 1st quarter with 75% of those leases post occupancy growth• Rent growth in 90% of markets

Source: JLL Office Outlook Q1 2015

Global Investment

• Main obstacles to acquiring assets – pricing, availability, competition• 40% year-over-year growth in cross-regional

capital flows• APAC 40%• EMEA 38%• Americas 37%

Source: CBRE

“Green Olympics”• Oxford and Arabesque Partners on impact of ESG practices:

• Lower a firm’s cost of capital (90% of studies)• Improve operational performance (88%)• Enhance relative stock prices (80%)

• Property Council of Australia/IPD Green Index – 70+ basis point total return premium for high environmental performance buildings• NAREIT/Real Foundations – 29% to 40% ROI on capital

invested in sustainability-oriented projects• Singapore Government-NUS of recently retrofitted

buildings – uptick in capital values of 2.7% for office and 2.3% for retail

Source: APREA Dispatch 20 May 2015

Value of BOMA 360 and TOBY

Source: CoStar

Rental Rates Vacancy Rates

CRE Issues and Concerns

Neighborhood Revitalization

Repurposing and Utilization

Images courtesy of Gensler

• More than half want to reach the senior-most position at their current organization• Only 28% feel their current organization is making full use of

their skills• Flexibility is key• Satisfaction with position versus salary• Everyone is essential• Make an impact• Employee retention

Source: Deloitte

Embracing the Millennials

Millennials Worldwide

Technology• Changes in next 5 years will exceed past 20• Sensor technology will be in everything –

cybersecurity• 3D printing• Artificial intelligence and robotics• We are losing critical thinking

Source: Jim Young, Realcomm

Ripple Intelligence

• Ability to anticipate and judge how, when and why contexts may interact to fundamentally disrupt the business• To discern and connect disparate events, discover

patterns and anticipate distant threats or opportunities• Evaluate emerging trends – game-changing, transient,

significant or slow-burn?• New decisions create new ripples

Source: Said Business School, University of Oxford and Heidrick & Struggles

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