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Cirex News is emailed weekly to over 2,000 CRE Brokers/Agents and people interested in commercial real estate. Email Ralph or call 608-345-2880 to feature your business or properties in CirexNews...

Amazon CEO Andy Jassy sent a memo to employees this week saying that the tech giant will likely shrink its head count in coming years as AI chatbots and agents take on more of the workload.

Jassy said that artificial intelligence will allow the company to be more innovative, increasing demand for specific jobs. But, in general, he expects that there will be less need for human workers. The statement was met with grumbling from folks who might find themselves on the corporate chopping block, according to internal employee messages seen by Business Insider:

Some complained that Amazon plans to use efficiency gains from AI to reduce head count and keep output the same, rather than grow the business.

Many Amazonians might’ve already been upset after the company recently told some employees to relocate to be closer to their teams—which is commonly used as a tactic to accelerate resignations.

Amazon insiders told the Wall Street Journal that though layoffs are possible, much of the AI-driven head count reduction is expected to happen through slower hiring.

Amazon isn’t alone

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RSK: Well, this is bad news for the office sector. Less humans less need for office space.

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Madison Lifestyle Office Portfolio comprises 14 Class A properties totaling over 1.7 million square feet of leasable area and an additional 8.3 acres of development land. The portfolio is located on the west side of Madison, Wisconsin.

Major office landlords, after a cautious start to the year, are now shedding some of their wariness as leasing momentum across the country heads back to pre-pandemic levels.

Some of the nation`s largest owners, such as Piedmont Office Realty Trust and Highwoods Properties, are reporting an amount of leasing not seen since COVID-19 sent workers home and upended demand for the office sector.

Data backs this up. A CoStar analysis shows new leasing volume in the first three months of the year neared 2019 levels, providing "the clearest signal yet that the office market has at last entered the recovery phase." Construction starts are at historic lows, limiting the building supply and leading executives to expect that a national vacancy rate that remains at a record high of 14% will eventually head lower...

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RSK: It has been a slow steady increase and mainly class A and small single offices. The cost to rehab and bring up to date class B space with construction cost being so high makes it difficult for those spaces to be appealing.

219 E Main St, Mount Horeb, WI	5955 McKee Rd, Fitchburg, WI	640 University Ave Madison, WI	704 Williamson St Madison, WI
5955 McKee Rd, Fitchburg, WI	638 University Ave Madison, WI

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Calling the life science sector’s start to this year “disquieting,” a just-released report from JLL examines the multiple uncertainties that are making investors and pharma companies cautious and leasing deals smaller on average.

One measure of this is that the U.S. lab market, which totals roughly 200 million square feet, would need about 20 million to 25 million in net absorption or supply reduction to reach equilibrium, according to JLL’s latest study.

“Barring an unforeseen and substantial growth spurt of demand,” JLL writes, “the likeliest outcome of this period of oversupply is that well-built and well-located buildings will gain market share, while buildings without those aspects will face increased odds of distress in the next 12-24 months.”...

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RSK: I have faith in the life sciences sector and am sure it will rebound especially in our market area.

1200 John Q Hammons Dr Madison, WI	8040 Excelsior Dr Madison, WI	1255 Fourier Dr Madison, WI	8000 Excelsior Dr Madison, WI
8025 Excelsior Dr Madison, WI	8030 Excelsior Dr Madison, WI	8020 Excelsior Dr Madison, WI	1241 John Q Hammons Dr Madison, WI

8150 Excelsior Dr Madison, WI

1289 Deming Way Madison, WI

918 Deming Way Madison, WI

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For over 45 years, The Gialamas Company has brought real estate development, brokerage, leasing and building management expertise to the City of Madison and the State of Wisconsin.

A company that builds vertiports — or hubs where flying vehicles can take off and land without a runway — has struck a deal to develop the potential air taxi hubs on private aircraft terminals in New York, Florida and Texas.

Signature Aviation, an Orlando-based operator of private aircraft terminals, signed a joint venture agreement with Italian advanced air mobility infrastructure firm UrbanV to evaluate U.S. locations for a network of U.S. airports to host electric and hybrid vertical takeoff vehicles.

The firms are exploring locations in Signature’s existing airport network, which spans 200 locations in 27 countries, and beyond, according to a press release. The move is aimed at capturing demand born from the rapid advancement of piloted aircraft and unmanned drones capable of shuttling passengers and cargo short distances...

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RSK: Meet George Jetson? Might affect commercial rooftops as landing sites.

Need to sublet extra office space? 

Let our years of experience help you find relief from this excess space and help your bottom line" 

Call Ralph Kamps 608-345-2880

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After decades of relentless office construction, the U.S. market is finally seeing its office glut shrink. According to CBRE, office supply is on track to contract in 2025 for the first time in 25 years, as developers demolish outdated buildings and convert others into apartments. Conversions, which were once cost-prohibitive, are becoming economically feasible due to falling property values, revised zoning codes, and generous tax incentive programs.

In New York City, approximately 40 million square feet of office space is expected to be converted into residential space over the next five to ten years, a doubling of the estimate from two years ago. Projects like developer Scott Rechler’s 5 Times Square redevelopment—adding 1,250 apartment units—are emblematic of this shift. Rechler secured a 90% tax abatement and purchased the 1.1 million-square-foot office property at a 40% discount from its 2019 value...

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RSK: Not a lot of conversions here other than Hovde`s Capital Square Bldg.

Event Information

July 16, 2025
3:30 to 6:30 PM
Memorial Union Terrace

Join Us!
CBG Madison Summer Social
Memorial Union Terrace
Wednesday, July 16
3:30 PM – 6:00 PM

Come enjoy summer vibes, great company, and lakeside views!

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Ken Notes: Thank you Tracy Johnson President and CEO of CARW for keeping me in the loop.

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With over 350 experienced real estate professionals, Knight Barry provides exceptional support and service. Visit our website for more information about our 50+ commercial and residential offices throughout Wisconsin, Michigan, and Minnesota.

MADISON: 2450 Rimrock Road, Suite 204, 608-255-2700
CAP SQUARE: 44 E. Mifflin Street, Suite 101, 608-255-2700

A 138-unit apartment building planned for Madison’s west side has been approved by the City Council for the second time, the Wisconsin State Journal reports. The news comes after Dane County Judge Rhonda Lanford sent the decision back to the city following some nearby residents’ outcry and a lawsuit challenging the site’s rezoning last summer.

Objections to the proposed three-story development at 6610-6706 Old Sauk Road stem from concerns that it would look out of place in the neighborhood, worsen traffic and increase the area’s risk of flooding.

Lanford earlier this month ruled that the council failed to determine whether the rezoning was consistent with Madison’s comprehensive plan as state law requires. She directed the council to reconsider the rezoning accordingly, and it once again voted to rezone the property, this time with a 16-4 vote..

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RSK: I understand where the neighborhood is coming from but it cannot be much different than the Sequoia Place on Midvale....and that has several retail properties. I do know that if you go to Sequoia the parking is terrible.

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With the largest Real Estate Practice of any law firm in Wisconsin, Reinhart offers clients custom-tailored real estate insight.

In just the past week, three separate Virginia data center projects have been rejected or recommended for denial by local officials amid growing local pushback in the world’s largest data center market.

Lawmakers in Chesterfield County, Fauquier County and the city of Chesapeake all voted against proposed data center campuses. Together, the three projects represent close to 1,000 acres of new development — and around 4.5M SF of data centers — that are now very much in jeopardy. 

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RSK: You are most likely to see more of the NIMBY protests for data center development. Some of the reasons are real but I do not buy the more traffic argument. Data centers do not employ a lot of people...rather machines. Plus new cooling methods can abate the noise level.

6504 Ronald Reagan Ave, Madison, WI	Madison East Business Center 4602 S Biltmore Ln, Madison, WI	4602 S Biltmore Ln Madison, WI

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One of the main ways that brokers find new clients is by reaching out to homeowners about selling their houses. This practice has been supercharged by technology that can help plan and execute huge outreach campaigns. While these large scale marketing efforts can be successful, they can also expose brokerages to litigation for violating the Telephone Consumer Protection Act.

Earlier this week, a complaint was filed against Kellar Williams in New York over its telemarketing campaign. Now, a second lawsuit has been filed in Oregon, this time against Compass. Both suits accuse the brokerages of repeatedly contacting someone who “has no existing business relationship” with the companies. There is also a class action lawsuit being brought against Compass for all of the people it contacted who are listed on the national Do Not Call Registry...

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RSK: This is worrisome. I know many commercial brokers who cold call property owners. I find it hard to believe they can be sued unless the property owner tells them not to contact them ever again.

75 Gasser Rd Wisconsin Dells, WI

4711 Farwell St McFarland, WI

808 Industry Rd Sauk City, WI

426 Gammon Pl Madison, WI

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The U.S. business sector came into 2025 looking forward to a resurgence of merger-and-acquisition activity, based on their collective expectations about inflation, interest rates and the new presidential administration, according to highlights from a new report from PwC.

Contrary to those expectations, the administration has pursued aggressive policies with respect to trade and tariffs. So far, at least, this has not resulted in an M&A slowdown, as both deal volume and total dollar value are comparable, year-over-year.

Still, a May survey by PwC found that roughly one-third of respondents were pausing or revisiting deals, leading the Big Four accounting firm to conclude in its US Deals 2025 Midyear Outlook, “We believe an upswing is still possible, but it’s unlikely without more policy clarity and stability.”   ...Full Story Here

RSK: I quick inside look at what may happen for certain CRE sectors...a few bright spots and a few burn outs.

4901 Eastpark Blvd	5201 Eastpark Blvd Madison, WI	2310 Crossroads Dr	5315 Wall St Madison, WI
2801 Crossroads Dr Madison, WI	5325 Wall St Madison, WI	2128 City View Dr Madison, WI	5310 Wall St Madison, WI

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One area of expertise for Investors Associated is first class property management. To keep our properties running smoothly, we focus on the little things with the big picture in mind. Our team is comprised of a group of individuals that oversees the day-to-day operations such tenant retention, lease negotiations and property maintenance costs. Bottom line, if you’re not happy, we’re not happy! Check out our properties today and see why you should lease with us.

Description

Pop-Up Networking Happy Hour
On the Patio at Vintage Brewing 

Expand your circle, strengthen your connections, and unwind with fellow real estate pros at this laid-back networking event. There’s no agenda - just real conversations, potential referrals, and the chance to connect with others who understand the business.

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Over the past five years, the office sector has been constantly adapting to new market needs and economic realities, but office attendance is still far from pre-2020 levels.

Despite a monthly uptick in office-using employment of 31,000 jobs in April, office-using sectors overall were up just 0.2 percent year-over-year, Census data shows. The national office vacancy rate was 19.7 percent as of April, down 20 basis points from the previous month, but up 140 basis points year-over-year, according to a recent CommercialEdge report.

However, mostly fueled by some organizations implementing return-to-office mandates, office renewals and expansion deals are still taking place. Accesso, for example, has signed nearly 112,000 square feet in lease expansions across its mixed-use, office and retail portfolio over the last 12 months. The Florida-based commercial real estate investment manager, owner and operator signed expansion agreements at six of its properties across the Southeast. What was Accesso’s strategy to determine tenants to renew and/or expand their leases?...

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RSK: One key for renewals is to be in constant communication with your tenants well before the renewal date, the flight to quality and less commuting time with amenities.

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Question:

Answer:

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2 E Mifflin St Madison, WI	22 E Mifflin St Madison, WI	152 W Johnson St Madison, WI	1400 E Washington Ave, Madison, WI
10 W Mifflin St Madison, WI

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Utah Sen. Mike Lee is pressing to sell federal land in the western US

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RSK: Good or bad idea? Let me know your thoughts on LinkedIn!

ABSTRACT Commercial Real Estate LLC	The Gialamas Company, Inc.	Artis Reit	Key Commercial Real Estate, LLC
Madison Commercial Real Estate LLC	St. John Properties	IA Management, LLC	Wisconsin Commercial Real Estate
Park Towne Realty LLC	Mullins Group, LLC	Crown Commercial	Flad Development & Investment Corp.
Evans Properties, LLC	Keller Real Estate Group		MIG Commercial Real Estate, LLC
First Weber Group, Inc - West Towne	Opitz Realty, Inc.	First Weber Group, Inc - Prairie Du Sac	Peterson Management Company Inc.
The Lenhart Company, Inc	Scott Faust & Associates	Shamrock Real Estate Services, LLC	Targa, Inc
Executive Management, Inc	Stark Commercial - East	Urban Land Interests	Slinde Realty Company
Assist-2-Sell/Pohlkamp & Associates	Berkshire Hathaway Home Services Matson Real Estate	Artisan Graham Real Estate

Hovde & Hovde, Inc

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