Power Reads: 5 Interesting Articles That Will Help You This Week

Each week, I select a few articles that rise above the fray and hopefully help you on your journey in leadership and the CRE world. They pull from one of four "corners": corporate real estate, technology, management science and anything positive. Each day we can become a better version of ourselves.

1. Inside Amazon’s quest to use less cardboard

Inside an Amazon warehouse, when an order gets ready to ship, a worker doesn’t just make a decision about what package seems best. Instead, a suite of machine-learning tools analyze the combination of items that are shipping and choose the size and type of packaging—or whether a box is needed at all—as part of the company’s ongoing quest to shrink its giant packaging footprint.

The company won’t share how much cardboard it uses in a year, though as the world’s largest online retailer, the number is huge. One recent analyst estimate suggests that Amazon shipped 415 million packages in the month of July, for example.

But the company says that over the last five years, it has managed to reduce the amount of packaging used per shipment by roughly a third, eliminating 915,000 tons of packaging material, or the equivalent of 1.6 billion boxes that it would have otherwise used. In the last two years, its software has allowed the company to avoid shipping more than 500,000 tons of waste.

2. Mentoring During a Crisis

Shortly after September 11, 2001, I (David) stood in the cafeteria line at work, anxieties still swirling in my mind. I happened to see one of my mentors, a senior member of our department; after we exchanged hellos, our conversation quickly turned to current events. I remember he said two simple – yet powerful – words: “It’s scary.” Almost instantly, my fears began to settle, replaced by a sense of connection. Knowing I wasn’t alone made a difference.

From our combined ~50 years of experience mentoring healthcare professionals before the Covid crisis, and now during it, we’ve learned just how important mentors can be—especially for those on the front lines. For months, doctors, nurses, grocery store workers, postal carriers, and many others have been navigating physical danger, complexity, and uncertainty, with no end in sight. Now more than ever they need emotional support.

But they can’t always turn to their managers, who may be consumed with solving problems and overwhelmed with keeping their organizations running. Workers may also fear that managers, who hold the key to future advancement, may view a request for help as a weakness. Thus you as a mentor can play a critical role, providing them with a stabilizing force, someone who can help talk them down when they’re triggered, scared, burned out, or confused—all off the record.

3. Increasing Demand for Cold Storage Spurs Spec Projects, Institutional Investment

Online grocery sales represented just 3.9 percent of all grocery dollars spent at the end of 2019. By May 2020 that figure had increased significantly, says Kroner. He predicts that in response to rising demand, grocery chains’ supply-chain infrastructure will evolve, mirroring many of the lessons e-commerce direct-to-consumer, supply-chain models have developed since 2010. These lessons include establishing separate facilities for merchandise going to physical stores and those operating as e-commerce fulfillment centers. This will have a significant upward impact on demand for cold storage space, Kroner says.

Long before the pandemic arrived at U.S. shores, in May 2019, real estate services firm CBRE estimated that the number of consumers buying packaged food items online would rise from about 50 percent to 70 percent, creating demand for an additional 75 to 100 million sq. ft. of cold storage space over the following five years.

That estimate did not reflect the current surge in online grocery sales, nor did it take into account the need to replace obsolete cold storage facilities. The average age of U.S. cold storage buildings is 42 years, with more than 78 percent of the total inventory built prior to 2000.

4. The Economic Rebound Is Coming in 2021

The recovery is coming, but it won’t start until next year. The Real Estate Economic Forecast fall survey from the Urban Land Institute with 43 economists and analysts and 37 real estate organizations forecasts a varied recovery that will begin in 2021 and last through 2022.

Industrial and single-family assets are expected to perform the best, but the real estate market overall should holdup better than initially expected. Overall, the recession is expected to be short-lived. “The worst fears of earlier this year have mostly eased. As of now, leading real estate economists are signaling that resilience and underlying strength will likely win out over uncertainty and risk,” said William Maher, principal at Maher Strategies, in a statement.

The results of the survey, which is conducted semi-annually, expect GDP to decline 5% this year but increase again in 2021. Respondents forecast 3.6% GDP growth in 2021 and 3.2% GDP growth in 2022. The 2020 GDP loss is an improvement compared to the prior survey, which estimated a 6% fall in GDP this year. However, the previous survey was also more optimistic about GDP growth in 2021 and 2022, forecasting 3.9% and 3.6% respectively. Employment follows a similar trend. This year, the survey expects jobs loss to total 9 million, but—like GDP—job growth will begin in 2021 and 2022, growing by 3.5 million and 3 million jobs, according to the survey. By the end of 2022, unemployment could fall to 5.5%.

5. These Are the Perks Companies Use to Get Workers Back to Their Offices

At the headquarters of SL Green, a real estate company in Manhattan, employees walk the halls with masks on, line up with proper spacing for free lunch and sit at cubicles behind plastic barriers that rise up well over six feet.

Birthday parties are celebrated in the office — but over Zoom, with snacks available to be picked up and eaten by employees in front of their computers. Workers can even bring their children into the office for remote schooling, to be supervised by tutors paid by the company.

“They each have their own offices,” Francisca Lopez, a property accountant, said of the setup created for her 6-year-old son, Ian, and a handful of other children out of empty office space. “It’s the best incentive for me to come to work every day.”

Your success blesses others. I wish you a great a hugely impactful week!

Ken Ashley