Weekend Interview: Amy Bowser On Moving From JLL To CBRE, Landing Deals, Reviving Downtown
This series goes deep with some of the most compelling figures in commercial real estate: the deal-makers, the game-changers, the city-shapers and the larger-than-life personalities who keep CRE interesting.
Bowser, who was named D.C.’s top leasing broker at the region's Commercial Real Estate Brokerage Association's awards ceremony in 2020 and 2022, made the jump two months ago from JLL, where she had worked for nearly two decades.
She began her career with six years at Spaulding & Slye Colliers in 1999 until the D.C. real estate agency was bought by JLL in 2005. She worked in the firm's mid-Atlantic office, rising to executive managing director before moving to CBRE in March.
Her portfolio of high-profile office deals includes law firm Williams & Connolly’s 300K SF lease at the Wharf and The Washington Post’s move to One Franklin Square in 2015. In addition to her office market expertise, Bowser has a window into D.C.'s efforts to revitalize its downtown area through her work as a board member for the Golden Triangle Business Improvement District.
At a challenging moment for office markets and downtowns across the country, Bowser said there is some momentum in the asset class. In this interview, Bowser speaks about finding places for opportunity amid the uncertainty, what needs to happen for downtown D.C. — and downtowns across the country — to undergo a renaissance, and what strategies her landlord clients are using to lease office space.
This interview has been lightly edited for length and clarity.
Bisnow: I want to touch base on where you are in your career. You were at JLL here in D.C. for 20 years. Why did you decide to move to CBRE?
Bowser: As you mentioned, I've been in the business since ’99, so it is kind of crazy. It's been a good bulk of my career at the same place. It felt like the right time, right place. It really does feel like a perfect fit.
I always obviously worked very closely on transactions and in the marketplace with folks that are now colleagues for CBRE for years, and they perform at the highest level and they’re a great group of people. Just watching them build a great presence in Washington, D.C., and then having a huge platform and scale and incredible reputation, it was really kind of a no-brainer. It just felt like the right time, and with the resources that we have here, we definitely feel like we are in the best place to give the best data and service to our clients.
Plus, we have brand-new offices. And talking about this world of having office space, it really attracts people to the office to work and collaborate. It's been great. It's been a fantastic transition.
Bisnow: You were awarded CREBA’s top D.C. leasing broker in 2020 and 2022. You've received several other major honors in the industry. Tell me about how you've been able to reach this level of success in the industry. What is your secret?
Bowser: I would say the good fortune of having fantastic teammates, tremendous mentors, incredible clients and trying to make the most of opportunities when they were put in front of me.
Bisnow: Would you give any advice to other brokers, people in your position or people you advise on how to kind of reach this level of success?
Bowser: What I would say to kind of put a little bit of a spin on the question: Right now, in this environment, in the commercial real estate market where we're facing some unique challenges and headwinds, for folks that are in this industry and in this business and looking to build their career, it is sometimes these periods of challenging markets where you are presented with some of the best opportunities.
So it's being optimistic, always looking for the opportunity, being present, staying focused at a time when there's winds in the market and continuing to plan your work, work your plan and be on alert. Change always creates opportunity. So it's making sure that you keep the right focus and mindset in a time like this.
Bisnow: That's a great segue. I wanted to talk about your work and the office market in general. According to CBRE’s latest market report, the D.C. office market surpassed 20% vacancy in Q1 and leasing activity was down 25% from historical year averages. We're now three years into the pandemic, and I wanted to ask your thoughts on why you think the market is still showing this kind of downturn and weakness.
Bowser: To take your question and modify it a little bit, you're right — the stats, it's a 127M SF market. We do have roughly 20% vacancy. It is feeling like literally in this environment, week-over-week, month-over-month, you really pay attention to changes, and we've been seeing an uptick in activity, which is promising. But when you look at the stats as you quoted them — 127M SF market, 20% vacancy — I think it's really important to peel back the layers of the data because there's more to the story than just the stats.
There’s 22M SF of vacancy. The majority of that is in older inventory, things that were 1960s, 1980s vintage assets. And some of that inventory, quite frankly, is going to end up being obsolete over the long haul. And we've already seen nearly 1.5M SF of office inventory converted to residential in a move to address some of that obsolete inventory. And then there's another 4.3M SF that's either underway or planned for more future conversions. So that's an interesting element of the marketplace that’s going on. There’s some degree of obsolete inventory being addressed. There's more of that that should take place, but that's a measure that is definitely going on.
Twenty percent vacancy, that’s across the broader marketplace. The very high-end product, the trophy-quality market, is seeing very solid activity. It's actually hovering around 12%. And that’s really indicating that our inventory is out of alignment and that there's a pretty significant dichotomy between what occupiers are seeking and what is actually available in the marketplace.
And the reason for that, the reason for why the trophy market is doing so well is in this environment, occupiers are looking for quality, newer or substantially renovated products that have the best amenities: conferencing centers and fitness centers and ways for their employees to come in and collaborate. Making a building that is much more magnetic to the employment base is important, having bones that allow for higher densification of space for the days when everybody does come in.
We've seen 73% of the tenants who relocated during the pandemic actually did upgrade their space. And some of them, as part of upgrading their space, also reduced their footprint. Almost 50% of the tenants that relocated reduced their footprint. But that’s allowed them to take down higher-end space. So as a result, at the top part of the market, we're seeing some net effective rate improvement, while some of the more aged and lower-tier product have fallen in the net effective rent. So that's very representative of what's going on in the flight-to-quality trend.
And then the other piece that people are looking for and seeing — and this is not unique to D.C.; we're seeing this across the country in other most major marketplaces — but the dynamic nature of the environment and the neighborhood. People trying to accomplish more in their workday than just work. So, here locally, we've seen even through the pandemic really healthy and encouraging activity in what we call our destination submarkets like the Wharf, Ballpark and even Union Market. So that is the same pattern will be in some of the other major gateway cities where it's more kind of neighborhood-driven, it’s 24/7. The CBDs were highly dense, highly densified for strictly office. Those segments of any market are a little slower to recover from the standpoint of net absorption. We're seeing much more engagement in these destination submarkets.
Bisnow: I did want to talk about the downtown area. You sit on the board of the Golden Triangle BID. What do you see as the biggest challenges facing the downtown area right now?
Bowser: I do sit on the BID, and some of my other colleagues here at CBRE are very engaged at other organizations across the city to focus on task forces and otherwise to give the best thoughts and advice and try to troubleshoot what to do here.
I think for our more traditional business districts, the fact that they were so densely oriented around the 9-to-5 workday, that is something that is important to be addressed. When you look at the inventory in the traditional core of the market as well, that's where most of that aged inventory is. And if people are looking to participate in the flight-to-quality movement, you have to look at our development pipeline. It's pretty anemic.
In that core, there are more opportunities for the city to get creative and more proactive to develop incentives that help the occupiers and developers find opportunities to have newer product or substantially renovated products in the core. That's going to help. Diversification of the neighborhoods is going to help. The conversion of older office inventory into residential, that will take some time, but the more diverse these neighborhoods can be, the better.
So I think that two of the biggest obstacles that occupiers are seeing for return to office amongst their employee base are people's reluctance and resistance to come in because of commute times and cost of parking. So to the degree that we can have easy access to public transportation, continue to have that safe and secure environment in these neighborhoods, all of that is going to be important. But at the end of the day, you need a dynamic environment that’s going to magnetize people back to the office.
We are encouraged that in CBRE’s recent occupier sentiment survey, 65% of the respondents are now starting to require some office attendance, and they anticipate increases this year. So we think that's going to help get more bodies on the street downtown and vibrancy. But once they do come in, it is important that our traditional business districts are more dynamic.
Bisnow: Turning back to your work at CBRE, I was wondering if you could shed some light on what types of tenants are most active in the office market and what types are least active — and in what sectors you’re seeing those trends.
Bowser: Looking at Washington, D.C., in the composition of our private sector tenant base, our large tenants right now in the District of Columbia tend to generally be law firms. We have some other large financial service firms and things of that nature, but the big, big occupiers of space in the District of Columbia are law firms. So they kind of move the needle on net absorption when they move around in the marketplace.
But then from a mean, median, mode standpoint — mode, the frequency of transactions — the other large, active segment of demand in the marketplace is government affairs. So you think about every major corporation doing business around the world and in the United States probably has a government affairs office or people working, lobbying on their behalf in the District of Columbia. When they move around the city, they might be in smaller tranches, but they’re literally scattered all over the city here, who work on Capitol Hill, and when they move to Washington, D.C., it's typically an extension of their chairman's office, so they want high-quality space and they want to be near some of their like-kind businesses. Those components of the market are still healthy and here.
I will say all tenants, as I mentioned earlier, of size tend to be re-evaluating their footprint and rightsizing on relocation, and we are still seeing that trend occur. So as a byproduct of that, we do think that we're going to continue to see some pressure on our vacancy overall near-term. But we think in looking at some of our occupier survey results that some of these tenants, we might start to see eventually, in some instances, some overcorrection on rightsizing. So we hope there will be some pent-up demand as we see companies start to encourage their employees to come back throughout the balance of this year, and looking forward, we are hopeful that that will release some additional demand.
When you look at financial services, not just for D.C. but across the country, they've been one of the leading industries for encouraging employees back to the office. D.C. is a composition of law firms, professional service groups, careers, nonprofits — we've got a little bit of everything. But as I mentioned earlier, when you look at the tenants that are moving around the market that make a big impact on vacancy, it's going to be groups that are taking up larger pieces of space, and those tend to be law firms in D.C. and very large associations — trade associations and things of the like.
Bisnow: What are some of your strategies to help your landlord clients fill space right now?
Bowser: It’s creating a compelling and captivating campaign around your building that shows that you are offering the types of amenities and environments that the tenants, and more specifically their employees, want. So presenting robust amenity packages, great resources in the building, a lot more activation in these office buildings, creating more of a community experience-based curation in the amenity areas.
CBRE has a program called Host where they work with their landlord clients to really activate these fantastic amenities and common areas that are injected into the building. So they're there, but you might also get an email alert about a great event that they're going to have at the building that will bring people. They're coming into work that day, and then they're going to benefit from this extra added benefit, this opportunity that the building is creating.
Bisnow: We have two questions that we ask all of our weekend interviewees. The first is to give us a bold prediction for the year. No pressure.
Bowser: Well, I'm not going to forecast real estate right now, but I am a huge fan of golf, and I predict the U.S. team will bring home the Ryder Cup in Italy.
Also, I’ll get my handicap down to a 12 by fall.
Bisnow: Do you have any golf spots that you like to frequent around D.C.?
Bowser: I belong to a club locally and enjoy getting out there with my friends most weekends.
Bisnow: That segues right into the last question that we ask all of our weekend interviewees, which is: Can you tell us about a weekend routine that you have or weekend activity that you partake in?
Bowser: Yep, that’s it. You’re going to hopefully find me playing golf with my friends or possibly on the [Chesapeake] Bay.