Every month, JLL’s regional team curates the top commercial real estate industry articles to keep you in-the-know. In this month’s edition, JLL spotlights the benefits of on-site childcare, how startup growth impacts CRE and rebounding retail sales.
On-Site Childcare Can Help You Win the Workforce
A recent post from JLL Real Views calls companies to provide on-site childcare to help maintain a stronger workforce. Some experts have found that the skilled labor shortage in the United States can be combated if companies provide mother-friendly benefit packages because women with a desire to advance their careers are leaving the workforce because affordable, quality childcare is difficult to find.
Some companies are inspiring women to stay in the workforce through the following incentives:
- Providing on-site childcare
- Increasing paid parental leave
- Encouraging work-life balance through flexible work options
Startup Growth Changes Commercial Real Estate
There is a strong correlation between startup activity and commercial real estate (CRE) growth, according to a report by Entrepreneur. Cities with extreme startup growth and a massive influx of young, highly educated new residents create a recipe for the next Silicon Valley. Startup activity has rebounded strongly since the Great Recession, which is good news for multiple local CRE markets.
Cleveland made the list of four cities where rapidly growing startup ecosystems are increasing the value of local CRE. Cleveland jumped nine places on Kauffman’s Startup Activity Index between 2016 and 2017, and figures suggest continued growth in Cleveland’s CRE market for the foreseeable future.
Rebounding Retail Sales Expected to Continue
A JLL research report says that retail sales rebounded robustly in March after a few months of weakness, and rebounding retail sales should stick around. The current jump in retail sales and future projected growth are due to tax cuts, income gains and tax refunds. This is good news for retail centers, which contrary to popular opinion, are not dead.
The economic insights report also uncovered four additional key takeaways that are notable for CRE:
- Oil and gas prices are rising, which will take some firepower from consumers.
- The yield curve continues to flatten but does not pose much of a problem yet.
- Stimulus is not impacting long-term yields much, but the 10-year Treasury should be monitored, especially if it races past 3%.
- Cap rates should see more upward pressure in the coming years as economic growth slows, translating into weaker fundamentals and less appetite for risk.