Charlie Morris is a real estate strategist and the founder of CREvolve, which advises owners, occupiers and proptech companies. He spent years as an office tenant rep broker in Dallas at Colliers, Cassidy Turley and Avison Young, then worked at the flexible workspace marketplace LiquidSpace and started Avison Young's global flexible solutions practice. He has sat on every side of the office lease, which makes him a sharp critic of how it is priced and financed.

Charlie Morris, Real Estate Strategist, CREvolve

Watch the episode ↗

In this conversation

Why Charlie walked away from a principal role at Avison Young, calling brokerage a commodity, and what he learned in his "flex MBA" at LiquidSpace.

The case for people over place: find out what employees need before deciding how much office to hold.

Why Charlie, who worked through 2009, thinks this downturn is a revolution in how people use offices and not only a recession.

His challenge to banks: if you can underwrite hotels and self storage on nightly or monthly occupancy, you can underwrite part of an office building the same way.

Why he wants brokerage to move from commissions to consulting fees, and the one thing he expects never to change.

The traditional office world is always going to be there, don't get me wrong. It's going to look different though, it's going to be utilized different, it's going to be structured different.

Charlie Morris

Chapters

Joining the disruption

From Dallas tenant rep to a startup he calls his flex MBA.

Brokerage as a commodity

Why a one or two percent edge over a competitor stopped being enough.

People over place

Building a portfolio around what employees need, with ServiceNow, Salesforce and Allstate as examples.

The elephant in the room

Capital markets still value office the old way, and prices show it.

By the numbers

Fall in U.S. commercial property values from recent peak, by sector (February 2024)

Office35%

Apartment28%

Mall20%

Industrial16%

Lodging7%

Charlie says building valuations are the elephant in the room and capital markets will set the pace of change. Office has lost more value from its peak than any other property type Green Street tracks.

Source: Green Street, Commercial Property Price Index (March 6, 2024) ↗

Underwriting flexible space

Why leases under five years get little value, and why that should change.

What will not change

Relationships, Expansive's owner-operator model, and the end of commissions.

If we can do that for those industries, please tell me why we can't do that for office as well.

Charlie Morris

Takeaways

Start with people, not place. Work out what employees need to be productive, then build the portfolio; the options between a central office and home may suit 60 to 70 percent of a workforce.

Lenders give full value only to office leases of five years or more. Charlie argues part of a building, say 20 percent, could be underwritten on shorter occupancy, the way hotels, multifamily and self storage already are.

Owners of ordinary buildings should not wait for a return to normal. Treat the building as a product and a brand, and cut the friction from deals that still take six months to a year even when they are routine.

I personally believe that it needs to go away from a commission-based entity to more of a consultative based service offering.

Charlie Morris