About Steven Iaco
In a September 2021 CNBC appearance, CBRE CEO Bob Sulentic discussed the company's performance and outlook for commercial real estate. Sulentic stated that CBRE's earnings stream had been "far more resilient than people expected," attributing this to the company's diversification across asset types including data centers, industrial and distribution centers, and multi-family financing, which he said "held up quite well" during the pandemic. He noted that asset classes under pressure, such as office buildings, retail centers, and hotels, would "start to clearly come back meaningfully after we get a vaccine," while predicting "stress for two or three years" before a different picture emerges.
Sulentic said he expects a "hybrid scenario" for office space, with "80 plus percent of that occupancy, if not more" returning, alongside remote working, flex space, and new uses of office space. He indicated that by the second half of 2022, there would be "much more activity in office buildings," followed by hotels and retail the next year. For warehouses and data centers, Sulentic described "continued strength" rather than a comeback, noting record activity levels in warehousing throughout the COVID period.
Source: AI-verified profile updated from Steven Iaco's recent appearances.
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Transcript (7 segments)
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Tyler0:00
2020 was a year one could never have predicted. So as you look into 2021, what kind of year are you expecting? That's question one. And number two, how did you blunt the impact of 2020? What did you do to be able to keep your stock on the plus side, but blunt the impact of this year?
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Steven Iaco0:22
Well, Tyler, thanks for having me. CBRE is a very diversified commercial real estate services and investment company. Yes, we're exposed to office buildings, retail centers, and hotels to a degree, but we also have big exposure to data centers, industrial and distribution centers, multi-family financing, project management, lots of things that have held up quite well. Our earnings stream has been far more resilient than people expected, and that's really what you're seeing in our stock. And as far as what we expect to happen in the industry next year, some of these asset types that are under pressure will start to clearly come back meaningfully after we get a vaccine and see the effects of that. Office buildings, people will go back to work. Retail centers, retail buildings will start to see better occupancy. Yes, there's going to be stress for two or three years, but a very, very different picture after we have a vaccine.
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Tyler1:16
But as you segment those market slivers that you just described, we just put a Chiron up on the screen indicating that the office centers, the retail, the hotels may come back a little bit slower than the multi-family part of your business and the industrial part, which would be not only data centers but I'm sure some manufacturing, but a lot of warehousing.
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Steven Iaco1:43
Tyler, and there's no comeback on warehouse. It's been a record activity level on that throughout the COVID period for the most part. Data centers are super strong. So you're not talking about comeback in those asset classes, you're talking about continued strength. Yes, comeback in multi-family, which has returned pretty significantly. But we think by the second half of next year, you'll see much more activity in office buildings, and then into the next year, hotels and retail. So it is a mixed story, but it's definitely pieces of the market with secular tailwinds and other people with secular headwinds introduced by COVID.
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Tyler2:24
Let me get you a 30-second answer on the future of the office. Are companies going to reduce their footprints? How much less office space is going to be out there in demand five years from now than now?
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Steven Iaco2:35
You'll see a hybrid scenario, Tyler. Lots of returning to the office. We think 80 plus percent of that occupancy, if not more, will come back. But they'll be remote working, flex space, they'll be working from home, and they'll be new and creative things happening in the use of office space. That's for certain. Bob Cellenic, have a great season here. We'll see you next year. Good luck, continued good wishes to you.
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Shepard Smith3:02
Shepard Smith here. Thanks for watching CNBC on YouTube.
