Chris Schaaf, Executive Managing Director and Brokerage Co-Lead, JLL

In an interview with Invest: Chris Schaaf, executive managing director and brokerage co-lead at JLL, shared key insights about the firm’s recent achievements, including talent recruitment, growth in office revenue, and the opportunities within Charlotte’s evolving commercial real estate landscape.

What have been some of the main highlights for the firm over the past year?

One thing we’re particularly proud of is not just our retention of great people, but our ability to recruit top talent to push the evolution of our firm forward. We’ve been focusing on several significant and strategic initiatives. As a real estate company, we operate across all major product types in commercial real estate — office, industrial, and retail.

The industrial and retail markets have seen a tremendous amount of growth and it’s no secret that the office market has had a challenging narrative, given how work has evolved in today’s world. We’re proud of how resilient we’ve been in that sector and how we’ve collaborated across each business line, making us better together. From a pure revenue perspective, the company is up significantly from last year, and office revenue is leading the way, pushing revenue by more than 80% compared to where we were last year. That’s noteworthy because it contradicts the broader narrative that office space is struggling. While it’s had its challenges, we’re seeing positive momentum due to factors like companies returning to the office, job growth and population increases playing a big role in Charlotte’s rebound.

JLL is the largest CRE firm in Charlotte with over 1,000 employees. How do they support your team’s work, especially in terms of resilience and strategy?

The beauty of our organization is that we’re all stitched together, regardless of what our day jobs are. Quality of people is more important than quantity of people, and it’s rewarding to be part of a larger organization where there’s alignment and collaboration. We have several service lines that support brokerage requirements across the product types I mentioned earlier, along with researchers, data scientists and analysts to help our clients make informed decisions. These service lines, such as property management or project development give us a full-service view of the underpinnings of the real estate world from both an occupier and owner perspective.  

How do you see external factors impacting leasing activity and demand for JLL’s services going forward?

Focusing on our region, we’ve been fortunate to benefit from people moving here for all the reasons Charlotte is so attractive — whether it’s the cost of living, quality of life or the mild climate. The fundamentals of our business are built on the people who live here and those moving in. We’re seeing domestic migration from tier-one markets like Boston, LA, San Francisco, and New York to Charlotte; something our market hadn’t seen as much in the past.

As companies look at their result portfolio and are making decisions to grow and expand, they’re focusing on cities with strong talent ecosystems. Thanks to Charlotte’s consistent growth in jobs and population, we’re positioned to effectively support expansion.

Do you think workplace settings have stabilized, or is there still more to figure out?

I do believe there is a sense of stabilization around the workplace, but there is still much to figure out. Where do we want to locate? How big do we need to be? How much flexibility do we need to have? Where will employees live? Every company is making decisions that work best for their organization and the pandemic changed aspects of the benchmarking industry that had previously served as a guide for what to do. As a result, we are spending more time with our clients to implement a true workplace strategy that allows them to make decisions that are curated for them vs. for someone else. 

We think hybrid work has always existed in some form, but it’s now under more scrutiny because of the focus on return-to-office metrics. 

What are some notable trends you’re seeing in the Charlotte metro area’s commercial real estate market, and how are they influencing your team’s work and strategies?

One of the key trends we’ve observed is that companies are focusing on providing a workplace that’s better than their employees’ kitchen tables. To do this, they’re investing in newer, high-quality buildings. Coincidentally, these newer buildings are often in prime locations. While the old real estate adage centered on “location, location, location,” this has evolved to “new, new, new.”

New buildings in urban areas with walkable environments are performing well, not just in terms of occupancy and utilization, but also in rent growth. This trend is particularly strong in Charlotte, where new developments in prime areas are seeing significant success, such as in Uptown, South End, Southpark, and Ballantyne.

It’s exciting to see the influence retail is having on offices. Curated retail environments, like Asana, Edens, and Northwood are driving people to areas where they want to work.

How is JLL innovating its approach to client relationships across the services it offers?

There are several ways to look at this, but one of the things I’m most proud of is our commitment to sustainability and our ongoing investment in technology. We reinvest a high rate of our revenue back into the business and spend hundreds of millions of dollars annually on technology, which is designed to differentiate us at the point of sale and help our clients on the occupier and ownership side make decisions based on unique strategies tailored to them.

We follow a “buy, build, partner” approach to technology. We develop technology internally, but we also partner with others who excel in certain areas. On the buy side, we even established a venture capital fund around 2018 or 2019, which has made about 95 investments totaling close to $200 million. This helps us stay at the forefront of PropTech and gives us insights into emerging innovations that can give our clients a competitive edge.  

What are your top priorities and goals for the near future?

Our people are our top priority — making sure they’re happy, fulfilled, and doing their jobs well for our clients. As the world becomes more interconnected and complex, it’s crucial that we continue to diversify our services and ensure we have the right team in place for any situation.

While we’re focused on growing revenue and being mindful of our obligations to shareholders, at our core, we’re a service company. Our main goal is to deliver exceptional results for our clients.

How do you see Charlotte’s older building stock evolving as the office market improves, and what opportunities do you anticipate for these properties?

There’s a lot of talk about how to handle obsolete real estate, particularly through conversions or other solutions. This stands out mostly in the office sector where some say the market is not overbuilt, but it is under demolished. This is something that most major cities in North America will need to address. In Charlotte, we’re fortunate that 60% of our vacancy is concentrated in just 10% of the building stock. That’s not to say we don’t have buildings that need attention, but we’re in a much better position than many other cities.

Some articles have painted a more negative picture, but many of the vacant buildings here are owned by solvent landlords who have made, or will make, substantial investments. With development stalled and very few new buildings being completed, we believe the next opportunities lie in these older assets. We’re optimistic that while some of these properties may need reevaluation, many will continue to be viable, especially as the office market improves.