Jacob Rowden on LinkedIn: Exclusive | OpenAI Is Putting Down ...
Thrilled to have the opportunity to share some contextual thoughts about AI in this WSJ exclusive about yet another big lease from OpenAI. The growth of AI companies and other expansionary activity in the market is an important component of the broader office recovery we’re experiencing. In our Q3 U.S. office report coming out next week, we’ll highlight an important milestone the U.S. crossed in the past few months as that story continues to unfold.
Given the company's projected loss of 5 billion this year and 3.7 billion in revenue, I wonder if this is a wise decision?
Wow, that's great! Expert analysis. Exciting and makes sense! So cool!! Congrats Jacob! My prediction is Open AI will burn $6.6 Billion Cash and 4 Billion Credit line in 2 years. Sam Altman will be back at investors door in 2026 seeking additional funding with pay to play scenario. OpenAI
Amazon's Impact on Office Requirements
With Amazon's 5-day office requirement announced last week, 94% of Fortune 100 employers are hybrid or fully in-office, and the average requirement across the companies has increased to 3.3 days, a notable evolution over the past two years.
An equilibrium of a 3-day hybrid RTO no longer seems like a foregone conclusion as Amazon and others continue to strengthen their policies, and the recent KPMG CEO survey seems to validate this: in April, around one-third of respondents saw full-time office as the long-term norm--as of September, almost 80% of respondents think that employees will be in offices full time over the next three years.
Office Inventory Conversion Trends
The conversion pipeline continues to grow...midway through September, we've reached our 4th consecutive year of record conversion volume, and soon to be 4th consecutive year of record office inventory removals.
Not every building is suitable for conversion, but enough are to make a difference, and cities are actively creating incentives to facilitate the economics - Seattle and Denver have been the latest to formalize new programs in recent months.
Research on Post-Graduate Migration Patterns
Excited to share a new research piece we are launching today: #TalentHubs
We looked at every single Class of '24 graduate from US News-ranked universities who took jobs in an office-centric role to understand post-grad migration patterns, shifts in location motivations, and the depth of different talent pools in different cities at a granular, industry-specific level.
Impact of New Supply on Office Vacancy
With a pipeline that has fallen 70% from 2019 and negligible groundbreakings in the past year, new supply is seeing vacancy quickly compress in the majority of markets. 22 of the markets we track, including major markets like New York, Seattle, Houston, and Silicon Valley, have under 10% vacancy for offices built in the past 10 years. In these leading markets, we're already seeing a spillover effect where demand is targeting newly-renovated or second-generation buildings amid the lack of new space, which is likely to continue and spread throughout the majority of the country. With demand steadily growing over the past 18 months, owners of Tier 2 or Class A+ product are positioned to see significant improvement in leasing momentum in the near future.
