Commercial Real Estate in Crisis? | C-Suite Insights for What's Ahead 4.24.24
Announcing the CEO Recipients of CED’s 2024 Distinguished Leadership Awards
The Committee for Economic Development (CED), the public policy center of The Conference Board, is honored to announce the CEO recipients of its 2024 Distinguished Leadership Awards, who will be recognized at the Distinguished Leadership Awards Celebration in October 2024.
The annual awards, a tradition for over three decades, honor leaders with a strong commitment to corporate citizenship, business stewardship, and advancing public policy in the nation’s interests.
This year’s recipients are:
Why it matters: “This year's honorees have demonstrated steadfast, innovative leadership amid transformational times, working tirelessly to advance equal opportunity, build a more civil and just society, and uphold a rules-based international order,” said Dr. Lori Esposito Murray , co-chair of the awards and former CED President.
Hybrid Work and Higher Interest Rates Are Pushing Commercial Real Estate to the Brink
Today’s downturn in commercial real estate (CRE) is unlike any previous US property crisis. Rather than oversupply, it’s fueled by reduced office demand—a postpandemic shift that’s fast becoming permanent.
See for yourself: Data on employee card swipes in the chart above suggest hybrid work is here to stay, and companies are shrinking their square footage needs as leases come due. As a result, office building prices have fallen sharply since peaking in 2022.
The TCB take: With higher interest rates pushing up financing costs, a reckoning looms for US banks, which are heavily exposed to CRE and have yet to fully come to terms with their losses.
QUOTABLE: Is Well-Being Part of Your Brand?
“[Employee well-being] cannot be seen as an HR initiative. This has to be embedded in the identity of the organization and the brand. We talked about how people join companies, they join brands. Well-being needs to become part of the brand, part of the identity of the organization. How are you going to do that?”
— Rita Meyerson, Ed.D. , Principal Researcher, Human Capital, The Conference Board. She joined C-Suite Perspectives to discuss how companies are making employee well-being core to their DNA.
Why Michelin Is at the Forefront of Sustainability
Join us on May 16 in New York City as we honor 米其林 North America Inc. for their outstanding commitment to sustainability at our ESG Leadership Awards.
In the realm of sustainability, Michelin sets a remarkable example across three critical domains: the marketplace, public space, and workplace:
Marketplace: Michelin is actively pursuing the integration of 40% renewable or recycled materials into all its products by 2030. That’s alongside efforts to decrease water extraction by 33% compared to 2019 levels, thus reducing its environmental footprint.
Public space: Through the Michelin Challenge Education program, the company is empowering disadvantaged children in public elementary schools by providing invaluable support from over 500 employee volunteers across 20+ schools.
Workplace: Michelin is dedicated to fostering diversity and inclusion within its workforce, striving to enhance representation, development, promotion, and retention of individuals from diverse backgrounds. Notably, Michelin’s African American Network, boasting 400 members, cultivates an environment where these employees can leverage their unique skills and talents to achieve their full potential.
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Communicators Are Seeing Productivity Gains from AI—But Progress Is Far from Uniform
Corporate communications leaders are already deploying AI across many use cases to improve productivity. But, according to participants in our recent AI in Communications Roundtable, substantial barriers remain.
Natural fits: Roles focused on content creation or process-heavy tasks will benefit most from AI integration. Current applications include streamlining customer interactions with chatbots trained on past transcripts, improving measurement including key message pull-through, and safely assisting employees through internally trained AI models.
Data deficit: A common roadblock for AI is a lack of quality, structured internal data, which is required to generate content in the company’s voice and within brand-specific guidelines.
Organizations that lack such structured data may require substantial investment. Until then, they can explore use cases that rely less on company-specific information or provide sandbox environments with de-identified data to familiarize employees.
The TCB take: AI isn’t a magic wand or turnkey solution. If implemented strategically, communications teams can achieve large and lasting productivity gains with the technology—but they’ll need proactive human effort to fulfill its promise.
Number of the Week: 2.3%
Euro Area inflation continued to slow in March, falling to 2.3%, its lowest point since July 2021. Inflation in Europe's largest economy, Germany, now stands at a three-year low of 2.2%.
The TCB take: An interest rate cut by the European Central Bank (ECB) in June is now almost a certainty. We are forecasting a June cut of 25bp as the most likely scenario, with a further 50bp in cuts through the remainder of 2024.
But tight labor markets and sticky services inflation ensure the ECB will remain extremely cautious and data-driven.?
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