(HOUSTON) – Hines, the global real estate investment, development, and property manager, today released its new global investment outlook titled, “Opportunistic Patience Prevails.” Informed by Hines Research, the report delivers a holistic view of current and emerging considerations for real estate investors.
Hines global chief investment officer David Steinbach introduces his view of the “Four Ds” systemically reshaping the economic, social, and real estate landscape: deleveraging, deglobalization, decarbonization and demography.
The report also explores what Hines believes are two signals of a potential recovery. The increase in transaction volume in some markets across the globe point to nascent improvement, though the U.S. recovery appears to be lagging Europe given the persistent spread between appraised capitalization (cap) rates and transaction cap rates. Additionally, by back testing the data on bank sentiment, Hines found a relationship between changes in bank lending standards and real estate investment performance. Once again, the European market in Hines observations appears to be further along in its transition with notable decreases in tightening compared to the U.S. where Q2 was the third quarter in a row with more than 60% of surveyed banks tightening underwriting standards on CRE loans.
“Our research points toward two key signals to watch in the current environment — an increase in global transactions and a link between shifts in bank lending norms and real estate performance,” said David Steinbach, global chief investment officer at Hines. “This, combined with emerging macrotrends, and economic and geopolitical forces, are the factors redefining investment strategies and priorities today. While change always carries some level of risk, it is also a catalyst for meaningful long-term transformation that often leads to new sources of demand, revenue, and opportunity.”
Hines’ regional insights reveal further distinctions between the markets:
- Americas – While deal volume in the U.S. and Canada is at half the level before the Fed began tightening, a number of regions (e.g., East, Midwest, and Canada), may soon see widespread “buy” signals given ongoing repricing. From a sector perspective, the fundamental health of U.S. warehouse and retail markets is moderating while apartment and office fundamentals are falling sharply.
- Europe – Positive signals in Europe are somewhat tempered by persistent cost-of-living concerns, the potential impact of demographic changes to the workforce on long-term growth, and a mixed economic outlook. In terms of real estate, despite lower transaction volumes and dips in leasing activity (aside from logistics and apartments), public market data suggests that the worst of the pricing declines may be over.
- Asia – Despite slowing in China, Asia’s growth is still expected to outpace the globe.1 Central banks in Asia remain vigilant, but with inflation trending in the right direction, consensus expects policy rates to ease in 2024 and 2025 though the yield curve for sovereign bonds suggests that long rates in the region could stay elevated or even rise over the next five years. Markets with rising cap rates are seeing relatively healthy rent growth and sectors like retail and office are showing signs of improving fundamentals and stabilization, respectively.
“To date, real estate performance is on pace with what we predicted entering 2023,” said Josh Scoville, head of global research at Hines. “With starts increasingly decelerating, lack of new supply will be an important contributor to the ultimate recovery, potentially leading to strong rent growth once demand inevitably improves. As we head towards the confluence of better fundamentals and heightened liquidity, we expect investor patience to be rewarded with a range of lucrative new global opportunities.”
The content herein and in the report is provided for informational purposes only. Nothing above or in the report constitutes investment, legal, or tax advice or recommendations. Such content should not be relied upon as a basis for making an investment decision and is not an offer of advisory services or an offer to invest in any product or asset class. It should not be assumed that any investment in an asset class described herein will be profitable. Any projections, estimates, forecasts, targets, prospects and/or opinions expressed in these materials are subject to change without notice. Opinions or beliefs expressed in these materials may differ or be contrary to opinions expressed by others. Certain information above and in the report has been obtained from third-party sources. Hines has not independently verified such information. Back-tested results are not a guarantee of future performance.
About Hines
Hines is a global real estate investment, development, and property manager. The firm was founded by Gerald D. Hines in 1957 and now operates in 30 countries. We manage nearly $94.6B1 in high-performing assets across residential, logistics, retail, office, and mixed-use strategies. Our local teams serve 790 properties totaling nearly 269 million square feet globally. We are committed to a net zero carbon target by 2040 without buying offsets. To learn more about Hines, visit www.hines.com and follow @Hines on social media.
¹Includes both the global Hines organization and RIA AUM as of June 30, 2023.
The Square, a flexible workspace platform by Hines, will open this fall at the Bowen Building in Washington, D.C.
Located at 875 15th Street NW, the McPherson Square building is owned by JPMorgan Chase, which acquired the 231,000-square-foot property in 2018 for $140 million, and moved its regional headquarters there.
The 12-story building was recently renovated with an updated lobby and interiors redesigned by Studios Architecture, which restored and retained the original historic Beaux Arts limestone façade.
“The hybrid work environment creates variable demand for office space and requires creative office solutions,” D’Juan O’Donald, executive director at JPMorgan Chase, told Commercial Observer. “We partnered with Hines to bring The Square to the Bowen Building as a direct response to these changing needs and the current nature of the workplace.”
The Square at the Bowen Building can accommodate up to 225 people spread across 30 offices and three suites. It features amenities such as kitchenettes, printer stations, conference rooms and individual offices.
This marks The Square’s fifth location globally, with additional locations in Houston, Salt Lake City and Mexico City.
Members have access to all building amenities including a lounge and event space, a fully equipped fitness center, and a rooftop with views of the National Mall. Members also have access to The Square’s network of collaboration and office spaces in its other cities.
“The Bowen Building is a landmark in the downtown business district, and the addition of The Square will elevate the experience further for clients who desire a high-quality product, with the ability to ebb and flow in a building and across conventional and flexible office products,” Andrew Cooke, Hines’ senior vice president, management services, said in a prepared statement.
Keith Loria can be reached at Kloria@commercialobserver.com.
Global law firm Davis Polk & Wardwell is doubling its footprint in Washington, D.C. with an 82,000-square-foot lease at 1050 17th Street NW, the office building recently purchased by Hines.
The law firm will occupy more than half the space in the 154,000-square-foot property, which Hines acquired last week from the Lenkin Co. in a $59.8 million-dollar deal, according to Hines.
“We are seeing new, top-quality buildings in Washington’s Central Business District experience positive absorption, making [the property] an attractive investment in a limited trophy supply environment,” Andrew McGeorge, senior managing director and head of Hines’ Washington D.C. office, told Commercial Observer in an email. “We are confident in best-in-class office assets that are well-located and in the strength of the Washington, D.C. economy.”
Delivered in 2020 and designed by Gensler, the 11-story property offers 15,000-square-foot floorplates built for collaboration.
The law firm will be moving from 901 15th Street NW, where it has leased 41,636 square feet since 2009, and will occupy the top five floors plus the penthouse of its new location when it moves in August of 2024. The rent was not disclosed, but a recent Newmark office report lists the average rent in the CBD to be around $56.06 per square foot.
The pimped out building includes a living green wall in the lobby, an 11-foot floor-to-floor low insulated glazing curtain wall and solar shades, a conference center, secured bike room and a 4,200-square-foot fitness center.
CBRE’s Randolph Harrell, Joseph Coleman, Lara Nealon and Brittany Gosnell represented the building owner in the deal, while Newmark’s Michael Shuler, Brian Goldman and Aaron Katz handled the deal for the tenant.
The building is currently 60 percent occupied and has approximately 57,000 square feet of office space and 2,000 square feet of retail available.
Keith Loria can be reached at Kloria@commercialobserver.com.
Three years after the onset of the COVID-19 pandemic brought New York City’s commercial real estate market to its knees, the Big Apple’s ongoing recovery faces possible new roadblocks that could shape its long-term business future.
Experts from the public and private sectors who spoke at Commercial Observer’s Future of New York forum March 30 at The Spiral in Hudson Yards echoed the importance of the city finding solutions for improving its business climate, fostering affordable housing and reducing crime in order to assure its vibrancy.
“We should not take for granted that this city will simply recover because we have always in the past,” Bruce Mosler, chairman, global brokerage at Cushman & Wakefield, said during the first panel. “This is a moment in time where we should not take for granted that New York will just be fine. It will be fine, but provided we take the necessary action.”
Despite the crossroads New York faces, Mosler is bullish that companies will still find the city an attractive place to “scale” their businesses because the city has a large concentration of highly educated workers.
Mosler was part of the panel “Designing a Vision for the New NY: Public-Private Partnerships & Strategic Initiatives Driving the Future of NYC.” The panel also featured Scott Rechler, CEO of developer and owner RXR, and Kathryn Wylde, president and CEO of the Partnership for New York City, a business booster group. The session was moderated by Jonathan Mechanic, chairman of law firm Fried Frank’s real estate department.
Among the chief issues New York is confronting now that could shape whether corporations remain or expand in the city is crime. While down overall in 2022 compared to 2021, crime has risen in recent years since state lawmakers implemented bail reform in 2019. Gov. Kathy Hochul is seeking changes to the bail law to give judges more discretion on violence crimes, and Wylde said it was vital that moderate New Yorkers let legislators know they support the governor’s proposal.
Tackling Gotham’s affordability challenges was also a chief concern for Wylde, who noted that New York is the nation’s most highly taxed city with the largest utility and telecom taxes coupled with the biggest real estate taxes in neighboring suburban counties.
Ken Fisher, co-managing partner of Fisher Brothers, an owner and developer, stressed the importance of New York being more pro-business. Fisher said he lost a major tenant, AllianceBernstein, at 1345 Sixth Avenue when the money manager opted to relocate its headquarters to Nashville in 2018. While Fisher has added a number of amenities to his office buildings since the pandemic, he said New York needs to make improving the business climate more of a priority — from taxes to executing building permits quicker.
“There’s some perception issues right now that need to be overcome, but I think the city can do it,” Fisher said during the forum’s final panel. “I think it’s a question of working together with the private sector in the form of more public-private partnerships and not wait for a tenant to come to the city to say ‘We’re leaving unless’ and have some kind of a comprehensive plan to keep businesses here and attract businesses to New York. Because no matter what anybody says, this is still the capital of the world.”
The panel “Leading Industries & Future Offices Positioning NYC as a Global Business Hub” featured Fisher along with Jason Alderman, senior managing director and head of the New York office at developer and owner Hines; Melva Miller, CEO of advocacy group the Association for a Better New York; and Lenny Beaudoin, global head of workplace strategy at brokerage CBRE. Meyer Mintz, tax partner at accounting firm Citrin Cooperman Advisors, moderated the discussion.
Alderman said he is optimistic about New York’s future so long as the public and private sectors work together. He noted that the city likely had “too much” office space for about 15 to 20 years, and increased hybrid working trends present opportunities to convert low-occupancy buildings into multifamily housing or perhaps create more public parks.
“We’re going to have lower-quality buildings that may get handed back to lenders and may get handed back to the city,” Alderman said. “I’m a big believer that we are going to figure this out.”
While recent data from security firm Kastle Systems shows New York’s office occupancy at 47 percent on a typical weekday, Zachary Steinberg, senior vice president of policy at landlord group the Real Estate Board of New York (REBNY), noted that mobile phone location data tracked by REBNY show a different story. Visitation at Class A-plus buildings in 2022 was two-thirds of pre-pandemic levels in most properties, and 60 percent of the city’s office assets are seeing visits at 50 percent or above from 2019, according to the REBNY data.
Steinberg was part of the panel “Enhancing the Vital Business Districts Fueling NYC’s Economic Engine.” It also included Kurt Stuart, managing director, commercial term lending Northeast, at JPMorgan Chase; Andrew Kimball, president & CEO of the New York City Economic Development Corporation; James Nelson, principal, head of Tri-State Investment Sales at Avison Young; and EB Kelly, senior managing director at Tishman Speyer. The panel was moderated by Paul “Tad” O’Connor, partner and co-chair of the real estate litigation practice at Kasowitz Benson Torres.
One of the major hurdles facing New York is a lack of affordable housing, panelists said. Producing more of it has been made all the more difficult due to the mid-June expiration of the state’s 421a tax abatement program. Gov. Hochul has proposed an ambitious proposal that would require municipalities to expand their housing stock by 3 percent downstate, but that has been met with stiff opposition in suburban areas like Long Island and faces an uncertain fate in state budget negotiations.
Compounding New York’s affordable housing woes was the sudden collapse in March of Signature Bank. Signature was the Big Apple’s third-largest lender with nearly half of its loans in the rent-stabilized multifamily space, according to Maverick Real Estate Partners.
“Signature, played a critical role in helping affordable housing projects move forward, so we’re going to need something to help supplement that loss,” David Walsh, managing director of community development banking in the eastern region at JPMorgan Chase, said during the forum’s “2023 Housing Forecast” panel. “The major money center banks can, and do, billions and billions of dollars of financings every year with traditional affordable housing, but it’s simply not going to keep up with the demand.”
The housing panel also featured Susi Yu, head of development at developer MAG Partners, and Travis Terry, president of urban strategy firm Capalino. Michael Zetlin, a senior partner at law firm Zetlin & De Chiara, moderated.
Maria Torres-Springer, New York City’s deputy mayor for economic and workforce development, kicked off the event with a keynote that touched on Mayor Eric Adams’ plans for building 500,000 new housing units over the decade for all income levels. She referred to the city’s affordable housing shortage as a “crisis” that requires “bold” action.
The Future of New York event also included a panel entitled “Designing for Tenant Needs & Analyzing Today’s Occupancy Rates” panel featuring Joseph Brancato, chairman at architecture firm Gensler, and David Falk, president of the New York tri-state region at brokerage Newmark.
Andrew Coen can be reached at acoen@commercialobserver.com
(HONG KONG) – Hines, the global real estate investment, development, and property manager, announced today the official opening of “Dash Living on Prat,” its premier and innovative tech-driven co-living rental offering for young professionals in the heart of Tsim Sha Tsui (“TST”), Hong Kong.
Formerly “The Butterfly on Prat Hotel,” the 6,500-square-metre 158-key hotel was purchased in 2021 on behalf of Hines’s Pan-Asia fund, Hines Asia Property Partners (“HAPP”), in partnership with MindWorks Properties, a Hong Kong-based real estate and technology firm. The hotel was rebranded and significantly renovated to transform it into a premier co-living complex featuring design, amenities, and community lifestyle targeted at today’s young professionals.
“We are seeing an increase in demand for more co-living options across Greater China,” said Claire Cormier Thielke, senior managing director and country head of Greater China at Hines. “In markets with high prices like Hong Kong, this differentiated accommodation offering aims to allow tenants to share experiences, develop their network, form relationships and build on the Hines promise of providing high quality living.”
The new complex includes ground-floor retail and will serve as the co-living flagship for Dash Living, one of Hong Kong’s largest operators of urban professional housing. It is in a strategic location adjacent to parks and restaurants, is convenient to both Hong Kong metro and the China High-Speed Rail to the Mainland and provides unparalleled access to the Greater Bay Area.
“This is an exciting option for young professionals that provides them with independence, comfort, amenities and community,” commented Chiang Ling Ng, chief investment officer, Asia at Hines. “As we continue to invest across the living space, we continue to seek out similar residential opportunities in the region.”
Marketing Communications
About Hines
Hines is a global real estate investment, development and property manager. The firm was founded by Gerald D. Hines in 1957 and now operates in 30 countries. We manage nearly $96B1 in high-performing assets across residential, logistics, retail, office, and mixed-use strategies. Our local teams serve 480 properties totaling nearly 241 million square feet globally. We are committed to a net zero carbon target by 2040 without buying offsets. To learn more about Hines, visit www.hines.com and follow @Hines on social media.
¹Includes both the global Hines organization and RIA AUM as of December 31, 2022.
About MindWorks Properties
MindWorks Properties is a real estate investment and asset management firm founded in 2018 with a focus on non-traditional real estate sectors such as co-living & hospitality, logistics & storage, and data centers. MindWorks Properties is affiliated with MindWorks Capital, a venture capital firm established in 2013 which utilizes a Pan-Asia strategy to source direct investments in technology companies across both Greater China and Southeast Asia. MindWorks currently manages over US$1 billion in total net asset value across its funds and is a co-investment partner of the Innovation Technology Venture Fund initiated by the Hong Kong government. For further information, please visit www.mindworks.vc
About Dash Living
Dash Living is Asia Pacific’s leading provider of rental housing in Hong Kong, Singapore, Tokyo, and Sydney, backed by MindWorks, Grosvenor, Taronga Ventures, Chinachem and more. With 2,000+ rooms and 3,500+ tenant members currently in our portfolio, Dash creates a global accommodation community through sharing economies, tech, and unique tenant experiences, empowering living in a connected world. In 2022 alone, nearly US$500 Million in Gross Asset Value has been acquired by renown real estate asset managers to be managed by Dash Living.
Times they are a-changing at Hines, a national real estate firm that’s developing the historic Walter Reed site.
On the heels of Tommy Craig stepping down from his position as co-head of Hines’ New York office, the real estate investment, development and property management company has made leadership changes throughout its executive ranks.
In the Washington, D.C., office, Andrew McGeorge, former senior managing director, was promoted to city head, taking over from Chuck Watters.
In his new role, McGeorge is responsible for new business procurement, development, acquisitions, and asset and property management activities in the mid-Atlantic region.
“In the short term, my goal is to execute our current development pipeline and deploy our discretionary fund capital to take advantage of the current asset repricing that is taking place in this volatile market,” he told Commercial Observer. “My long-term goal is to diversify our revenue streams by growing our development, acquisitions and management services businesses.”
McGeorge has been with Hines since 2020, coming over from Fairfield Residential after three years serving as the D.C. firm’s vice president of development. Before that, he spent 10 years at Monday Properties in the District, holding several executive titles.
Things shouldn’t change too dramatically under McGeorge’s leadership, as he still plans to continue all of Hines’ existing projects, which includes the 66-acre development at The Parks at Walter Reed, currently being co-developed by Hines and Urban Atlantic.
When complete, the development will include more than 3.1 million square feet of new construction and adaptive reuse of historic structures.
McGeorge characterizes the current D.C. market as extremely sluggish and challenging.
“For many of the new acquisitions we are evaluating, the rapid rise in interest rates is creating a negative leverage situation,” he said. “Unfortunately, we won’t pursue assets with negative leverage. On the new development front, projects are suffering from cost escalation, rising cap rates and modest rent growth. This difficult economic time will yield some opportunistic buying opportunities. We have plenty of dry powder to take advantage of the dislocations in the market.”
In that regard, Hines plans to grow its various verticals, including its multifamily, industrial, development and acquisition platforms.
Other changes around Hines include Jason Alderman taking the top position in New York; Steve Luthman now leading the firm’s Midwest, Southeast and Canadian regions; Sean Sacks taking over as Boston’s lead; and Syl Apps heading its South America office.
“This is a new era for the East region,” Sarah Hawkins, CEO for Hines’ East region, said in a prepared statement. “Jason, Andrew, and Sean are the right leaders to grow our business and take advantage of the significant real estate opportunities we see ahead.”
Keith Loria can be reached at Kloria@commercialobserver.com.
Tommy Craig, the co-head of Hines’ New York office, stepped down from his post on Jan. 1 after 40 years at the company, Commercial Observer has learned.
Craig, who was Hines’ first New York City employee, transitioned into a senior managing director role, and Jason Alderman, a senior managing director at Hines and its New York office co-lead since 2021, has taken over as the sole city head of Hines’ New York office, according to Hines.
“It has been a supreme privilege to be a part of the Hines New York office for the last 41 years, including 26 years of running the office, working hard on work worth doing, and contributing to the built environment in New York City with so many wonderful projects,” Craig said.
Craig will continue to advise Hines on its East Coast projects, according to Hines.
It’s safe to say that Alderman has some pretty big shoes to fill. Craig was hired by Hines in 1982 to help with the Houston-based developer’s first New York City project, the iconic Lipstick Building. He took the helm of the Gotham office in 1996.
Since then, Craig helped turn Hines into a major player in the city, managing the firm’s 30 million square feet of property, spearheading Hines’ acquisition of a 1.4 percent stake in One Vanderbilt and overseeing its $600 million sale of 7 Bryant Park to the Bank of China in 2018.
“I have a deep passion for what I do; and the aspects that I think about being a real estate developer in a city like New York is the work you do becomes tangible,” Craig told CO in 2020 about his long tenure at Hines. “I want to be modest about this, but to my wife and kids [two daughters and a son] I point the buildings out to them. I’m not sure anybody else gets to do that.”
Alderman joined Hines in 1999 as an analyst in the firm’s Beijing and Boston offices, before departing in 2012 to work at Norges Bank Investment Management and Australian real estate firm Lendlease. He returned to Hines in 2021 to shadow Craig before taking his post.
He plans to invest in multifamily, industrial and office-to-residential conversions in the city, if the price is right.
“Like many other groups, we’ve been working on either major repositioning opportunities or conversion opportunities from office to residential,” Alderman said. “But we just haven’t found a path to logical pricing with sellers.”
He also wants Hines to lean further into multifamily investments in Connecticut and New York state — like its 246-unit luxury apartment complex in Sleepy Hollow, N.Y. — as residential continues to outperform the struggling office market.
Craig’s departure isn’t the only Hines shakeup in leadership positions this year. Last week, the firm picked Steve Luthman to lead its Midwest, Southeast and Canadian regions, and chose Syl Apps to control the South America office.
Its Washington, D.C., head Chuck Watters stepped down to be replaced by Andrew McGeorge, while Sean Sacks will take over Boston lead David Perry‘s post.
McGeorge said he plans to continue Hines’ existing projects — like its planned 323-unit luxury development at The Parks at Walter Reed — and buying new sites when possible amid the high cost of financing. He joined Hines in 2020 after managing multifamily landlord Fairfield Residential’s mid-Atlantic properties and Monday Properties’ developments.
“We’ve raised a tremendous amount of discretionary funds, so we have more dry powder than we’ve ever had going into a recessionary period,” McGeorge said. “We believe that will allow us to strategically transact on some acquisitions when our competitors may not be able to.”
Sacks, who joined Hines’ Boston office in 2014 after eight years at developer the New Boston Fund, said he’s looking forward to working on Hines’ ambitious plan to build a 51-story, mixed-use tower at the center of Boston’s South Station Transportation Center, which is expected to be completed in 2025.
“I’m enthusiastic about our robust pipeline, specifically our city-defining project, South Station, and our continued focus on projects that set new standards for ESG and create the highest quality properties to live, work, shop and play,” Sacks said in a statement.
Celia Young can be reached at cyoung@commercialobserver.com.
Some of Washington, D.C.’s most notable office landlords have reached out to city officials requesting intervention in the District’s distressed office market, given the risks it could pose to its fiscal health.
In a letter sent by the Federal City Council to Glen Lee, D.C.’s new chief financial officer, the economic development group asked that Lee’s office better explain how it is accounting for the level of distress facing the city’s office market, particularly since the latest D.C. budget included increased tax rates for commercial properties.
Companies that signed the letter include Hines, Boston Properties, Brookfield, Trammell Crow, JBG Smith, Carr Properties, PRP, Akridge and Hoffman & Associates.
In particular, the letter asks for more clarity on how the District determines key variables like cap rates for office buildings, and how it takes into account sales of distressed properties.
While the letter doesn’t criticize District officials, it does unequivocally show the companies involved worry that D.C. policymakers don’t fully understand how distressed the office market really is, and it urges officials to meet with them to address the impending budget gap.
The letter states that the office market in downtown D.C. is experiencing significant setbacks resulting from the dramatic and persistent decline in commuter activity combined with the uptick in remote work.
“To be clear, the years leading up to the pandemic saw deteriorating conditions in the D.C. office market,” the letter states. “The pandemic and work from home have further eroded fundamentals, and all indicators of the health of the District’s office market point to increased systemic risk and distress.”
Citing vacancy rates, the letter points out that, of the 733 large office buildings in the District with a heavy office presence, 137 are now more than 25 percent vacant. Overall, the office vacancy rate in the Central Business District is at 20.3 percent, an increase from 10.6 percent in the last quarter of 2019. Sinking office demand is something being experienced across the nation.
The letter also points to lackluster leasing activity, noting private companies and the federal government have both pulled back recently. The year-to-date net absorption in the CBD and East End submarkets was -174,763 and -391,485, respectively.
Additionally, there have been very few sales in 2022, which the letter notes is a “troubling sign,” and it’s expected that there will be more frequent distressed sales. And while some sales involve office-to-residential conversions, which is good news for Downtown, it’s bad news for office market valuations, the letter reads.
“D.C. is doing many promising things to bring energy and vitality back Downtown, like pursuing office-to-residential conversions and redoubling its tourism promotion efforts,” Kevin Clinton, chief program officer for the Federal City Council, told Commercial Observer. “Ultimately, we think that the future of downtown is going to have a greater mix of uses, and office, residential, arts, entertainment and parks will all be part of the solution.”
So, even as many companies pursue telework more, there’s a need to focus on corporate attraction for those companies that do want to be in dynamic places, to replace some businesses who downsize or vacate their space.
“Our interest in this matter is not about being overtaxed,” the letter states. “We are primarily concerned about the future fiscal health of the city. For every decline of $100 million in commercial property tax assessments, annual property tax revenue falls by $2 million. It is vitally important for city officials to fully comprehend the difficult environment commercial office buildings are operating under and the risks to the future tax revenue.”
Paul C. Dougherty, president of PRP, told CO it’s important to look at how the D.C. market has arrived at its current situation. Part of it has been through tenants resizing over the last cycle combined with a rise in those working from home, he said.
“A lot of this started before the COVID period — probably five to 10 years ago — but at the same time, we were introducing new markets into D.C., such as the ballpark, waterfront and Mount Vernon Square,” Dougherty said. “People were flocking to newer product, and those markets filled with older product — like the CBD and the East End — have suffered.”
But beyond that, the city has had a hard time attracting new corporations and has lost a lot of companies, he added, and the pandemic just added to these problems.
“What we said to Glen Lee is we want you to do very well, but this budget is proposing a lot of blue skies and good news revenues that we don’t think are going to be there,” Dougherty said. “The letter was written to say, ‘Look, you need to step back and look at what’s happening, and you need to provide for what we think is going to be an extended down period in downtown office. You need to be conservative in how you look at things.’”
Keith Loria can be reached at Kloria@commercialobserver.com.
(HOUSTON) – Hines, the global real estate investment, development, and property manager, today announced a partnership with Forbes Travel Guide to define five-star hospitality standards at Hines buildings, making it the first commercial real estate firm to work with Forbes Travel Guide on a global scale.
Hines and Forbes Travel Guide will co-develop custom service standards for the firm’s 415 global office and multifamily properties, and emphasize how hospitality-inspired service can bring greater value to tenants and residents. As commercial real estate standards rapidly change, and people seek more collaborative, creative, and curated spaces, the partnership signifies Hines’ commitment to creating a consistent customer experience that scales with the firm and brings the company’s culture to life.
“Real estate owners and managers have typically prioritized asset value over experience. We’re seeing the value in both ROI and ROE, or return on experience, and see it as the most important metric of tomorrow,” said Whitney Burns, vice president of global client strategy at Hines. “Enhanced customer experience driven by five-star standards not only increases asset value, but helps people feel more valued, connected, and inspired in our spaces. We selected Forbes Travel Guide because they are the trusted partner of the world’s leading hospitality brands and share our passion for creating meaningful experiences for clients.”
In addition to the co-created service standards, the partnership between Hines and Forbes Travel Guide will include a substantive training program encompassing both in-person training customized to the Hines portfolio and scalable online training. The new service standards will be implemented in 2023.
Creator of the original Five-Star rating system, Forbes Travel Guide is the only independent, global rating agency for the hospitality industry. With over 60 years in the hospitality sector, Forbes Travel Guide is the global authority on five-star service, providing world-class, professional development resources to many of the world’s most beloved hospitality brands including the Mandarin Oriental Hotel Group, Marriott International, Hilton Worldwide Hotels & Resorts, as well as other organizations that make exceptional service a pillar of their business model.
“Now, more than ever before, people are emphasizing the experience and purpose behind where they choose to spend their time. Our partnership with Hines is a testament to the firm’s commitment to innovation and placemaking and signifies a new industry standard in the operation of commercial real estate,” said Hermann Elger, Forbes Travel Guide CEO.
About Hines
Hines is a privately owned global real estate investment firm founded in 1957 with a presence in 285 cities in 28 countries. Hines oversees investment assets under management totaling approximately $90.3 billion¹. In addition, Hines provides third-party property-level services to 373 properties totaling 114.2 million square feet. Historically, Hines has developed, redeveloped or acquired approximately 1,530 properties, totaling over 511 million square feet. The firm currently has more than 198 developments underway around the world. With extensive experience in investments across the risk spectrum and all property types, and a foundational commitment to ESG, Hines is one of the largest and most-respected real estate organizations in the world. Visit http://www.hines.com for more information.
¹Includes both the global Hines organization as well as RIA AUM as of December 31, 2021.
About Forbes Travel Guide
Forbes Travel Guide (“FTG”), the global authority on genuine Five-Star service, provides world-class professional services to the hospitality industry and other service-oriented businesses such as luxury retail, residential, healthcare and private clubs through bespoke training solutions, evaluation services and custom service standards. Started as Mobil Travel Guide in 1958, the company created the first Five-Star rating system in the United States. Today, in addition to providing professional services, FTG is the only independent, global rating system for luxury hotels, restaurants and spas. FTG’s prestigious annual Star Awards can only be earned through the company’s objective, in-person inspection process. For more information on FTG services, please visit partner.forbestravelguide.com.
Partnership to Result in Co-Creation of Five-Star Standards for Working and Living
HOUSTON, Sept. 22, 2022 /PRNewswire/ — Hines, the global real estate investment, development, and property manager, today announced a partnership with Forbes Travel Guide to define five-star hospitality standards at Hines buildings, making it the first commercial real estate firm to work with Forbes Travel Guide on a global scale.
Hines and Forbes Travel Guide will co-develop custom service standards for the firm’s 415 global office and multi-family properties, and emphasize how hospitality-inspired service can bring greater value to tenants and residents. As commercial real estate standards rapidly change, and people seek more collaborative, creative, and curated spaces, the partnership signifies Hines’ commitment to creating a consistent customer experience that scales with the firm and brings the company’s culture to life.
“Real estate owners and managers have typically prioritized asset value over experience. We’re seeing the value in both ROI and ROE, or return on experience, and see it as the most important metric of tomorrow,” said Whitney Burns, vice president of global client strategy at Hines. “Enhanced customer experience driven by five-star standards not only increases asset value, but helps people feel more valued, connected, and inspired in our spaces. We selected Forbes Travel Guide because they are the trusted partner of the world’s leading hospitality brands and share our passion for creating meaningful experiences for clients.”
In addition to the co-created service standards, the partnership between Hines and Forbes Travel Guide will include a substantive training program encompassing both in-person training customized to the Hines portfolio and scalable online training. The new service standards will be implemented in 2023.
Creator of the original Five-Star rating system, Forbes Travel Guide is the only independent, global rating agency for the hospitality industry. With over 60 years in the hospitality sector, Forbes Travel Guide is the global authority on five-star service, providing world-class, professional development resources to many of the world’s most beloved hospitality brands including the Mandarin Oriental Hotel Group, Marriott International, Hilton Worldwide Hotels & Resorts, as well as other organizations that make exceptional service a pillar of their business model.
“Now, more than ever before, people are emphasizing the experience and purpose behind where they choose to spend their time. Our partnership with Hines is a testament to the firm’s commitment to innovation and placemaking and signifies a new industry standard in the operation of commercial real estate,” said Hermann Elger, Forbes Travel Guide CEO.
About Hines
Hines is a privately owned global real estate investment firm founded in 1957 with a presence in 285 cities in 28 countries. Hines oversees investment assets under management totaling approximately $90.3 billion¹. In addition, Hines provides third-party property-level services to 373 properties totaling 114.2 million square feet. Historically, Hines has developed, redeveloped or acquired approximately 1,530 properties, totaling over 511 million square feet. The firm currently has more than 198 developments underway around the world. With extensive experience in investments across the risk spectrum and all property types, and a foundational commitment to ESG, Hines is one of the largest and most-respected real estate organizations in the world. Visit http://www.hines.com for more information.
¹Includes both the global Hines organization as well as RIA AUM as of December 31, 2021.
About Forbes Travel Guide
Forbes Travel Guide (“FTG”), the global authority on genuine Five-Star service, provides world-class professional services to the hospitality industry and other service-oriented businesses such as luxury retail, residential, healthcare and private clubs through bespoke training solutions, evaluation services and custom service standards. Started as Mobil Travel Guide in 1958, the company created the first Five-Star rating system in the United States. Today, in addition to providing professional services, FTG is the only independent, global rating system for luxury hotels, restaurants and spas. FTG’s prestigious annual Star Awards can only be earned through the company’s objective, in-person inspection process. For more information on FTG services, please visit partner.forbestravelguide.com.
SOURCE Hines
