Nationwide commercial real estate woes hit local firm
Shakeups in commercial real estate nationwide are being felt here in the islands, too. And it’s not just about the price of office space.
One of the nation’s powerhouse commercial real estate brokerages, Dallas-based CBRE Group, recently announced plans to cut costs by $400 million. The firm, which has offices in Honolulu, is reacting to the real estate downturn it has felt so far, which it expects to continue.
Emma Giamartino, global group president, chief financial officer and chief investment officer, said during an Oct. 27 Q3 earnings call, that about $300 million of the cuts will be permanent, and achieved by reducing headcount.
Another $100 million is expected to be more temporary in nature, coming from reductions in travel, entertainment, promotions and marketing spending as well as discretionary compensation plans — but will be continued until market conditions improve.
In July, CBRE’s Hawaiʻi office ranked second on Pacific Business News’ List of commercial real estate firms, with sales totaling $368.91 million in 2021.
The company leased and sold 2.52 million square feet of commercial property last year and 1,041.39 acres of vacant commercial land, according to information on the list.
Through a spokesperson, the company declined to share specifics about what these cuts mean here in Hawaiʻi, though the spokesperson did say the company is “working with the affected employees on an equitable transition.”