At Hughes Marino, our award-winning culture and team performance thrives on continuous improvement, knowing that EVERY detail matters. This includes identifying things, both big and small, that may not be running as smoothly as they could be and having the courage to speak up when challenges might arise. As part two of our HM-ism series, we wanted to focus on a motivating phrase centered around teamwork, that follows our last HM-ism spotlight in always striving to get 1 percent better, because improvement stops when silence begins.

One of our more recent HM-isms comes from Ben Hunt‑Davis, an Olympic legend and author of “Will It Make the Boat Go Faster?,” which also happens to be one of our favorite reads! His book outlines the incredible story behind the framework that transformed Great Britain’s rowing team from underperformers into Olympic Champions. Our team was fortunate enough to hear Ben’s inspirational story during a special all-team meeting, which included this concept, and left a big impact:

If you see something that’s not as good as it could be and choose not to discuss it, you’re helping us lose.

The Concept

According to Ben, when we notice something that isn’t working as well as it could be and choose not to say anything, we’re unintentionally allowing that inefficiency or dysfunction to continue, ultimately leading the team to lose. But in a high-performing culture, accountability isn’t just top-down, but rather it’s shared, regardless of seniority. Just as Olympic athletes examine every detail of their preparation and performance, we too must take ownership of our environment, our procedures and our results. This means being willing to (politely) question the status quo, identify areas for improvement and speak up, even when it might be a tad uncomfortable. Because in a team setting, what affects one of us often affects all of us. Speaking up isn’t about criticism, it’s about caring enough to help us all get better.

How to Apply This HM-ism

Putting this mindset into action starts with simply paying attention. Notice the areas where things feel clunky or inefficient. Maybe it’s a recurring miscommunication in a project handoff, a confusing process or a tool that creates more friction than flow. These small signals are often overlooked, but they’re the perfect place to start!

Once you’ve spotted something, don’t hesitate to thoughtfully speak up. It can be as simple as saying, “I’ve noticed something that might be worth improving.” Framing your input as a question or an observation invites collaboration rather than criticism, and it shows your investment in the team's success, especially when you provide your ideas for possible solutions.

Next, be open to the conversation that follows. Improvement is a two-way street, and great ideas often evolve when other teammates add their own perspectives. By staying receptive and focused on the goal, the whole team can move forward together.

Finally, keep track of the small wins. Maybe it’s a smoother meeting, a faster client response or less back-and-forth on a project. Noticing these improvements reinforces that speaking up makes a difference—and encourages others to do the same.

Making It Happen

Drawing from Ben’s journey, the British rowing crew relentlessly examined each aspect of practice and process, keeping only what propelled their boat forward. They actively eliminated what didn’t, and that uncompromising honesty was the engine behind their gold-medal performance.

By championing a culture where raising one’s voice might save all of us from losing, we harness the same relentless improvement mindset that drove the boat to gold.

What will you speak up about this week? Your one idea might make the whole boat go faster!

     

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How to renew your commercial real estate lease without paying up for the industry’s best kept secret

By John Jarvis

Commercial real estate is an inefficient marketplace. It is also a bit of a relic, unchanged in the last hundred years and largely dominated by landlords and their brokers, which has resulted in an industry where long-term, loyal, repeat customers are repeatedly expected to pay a premium. I call it a loyalty premium. The mechanism for this is the renewal option, which unsuspecting corporate tenants use all the time to simply extend the term of their office and industrial leases. It certainly looks like an Easy Button, with language about adjustment to a “market rate.” Except it doesn’t work that way at all. It is a siren’s song, and you must resist the temptation. Because the spread between “renewal” rental rates and the actual “price-clearing” market rental rates has never been wider than it is today, sometimes by a factor of 2X or greater.

In comparison, the stock market is an efficient marketplace. There are literally millions of active “traders” trading shares of stock every second of every day based on available, public information, continually setting and resetting the market price for those shares. Insider trading in the stock market is illegal, and this enables a certain transparency and levels the playing field for all participants.

Commercial real estate? Not so transparent. Opaque, in fact, is a better descriptor. Consider, there is no publicly available transaction information on negotiated leases, nowhere to find out about the net effective lease economics on current or recent transactions. The landlords know exactly how far they are willing and able to go, but they obviously don’t want that information shared with their tenants. What’s more, the “traders” in commercial leasing—the active participants responsible for setting and resetting the market rental price—are the tenants dealing with expiring leases. Except they aren’t “traders” at all. They are, in fact, quite busy running and growing their businesses, so it’s not surprising that the Easy Button, that renewal option, looks so darn tempting.

Resist the temptation.

Today’s market-clearing rental rates can only be discovered when tenants enter the marketplace for vacant space as a free agent and engage in price-discovery negotiations. Even then, not every building owner can afford to meet the market today. In San Francisco, for example, numerous Class A office projects have now completed the reset cycle of foreclosure and resale to professional investors. And it’s these new investors who are driving the market and competing for (and winning) the relatively few active requirements, because they have fresh capital and a property basis reduced by 60% or more. These are the folks who can afford to sharpen their pencils, and these are the folks making the market today. So as a tenant, you need to get in the game and trade paper with these market-makers. This is how you will gain visibility to today’s market-clearing rental rates.

Your current landlord, of course, doesn’t want you to do this, and they certainly don’t want you to know all of this. Your landlord desperately wants you to exercise your renewal option. They may even proactively reach out and offer a modest discount or concession. For some owners, this is the only way they make it through the current market cycle, if enough of their existing tenants simply exercise their renewal options and end up paying inflated rates.

As in most areas of life, there are simply no shortcuts without consequences. And that Easy Button? It’s a shortcut to the loyalty premium, every time.

     

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Because sometimes last place is the best place from which to lead your team

By John Jarvis

It is my pleasure to serve on the Board of Advisors for YMCA Overnight Camps, where we oversee three great year-round resident camps: Camp Surf, Camp Marston and Raintree Ranch. It was in a conversation about Raintree Ranch, a camp where kids learn to ride and care for horses, where I learned something interesting. A dominant stallion will typically lead its herd from the back of the group. I knew this was true about wolf packs, and I’ve always thought it was cool and that it makes a lot of sense in the right circumstance. And what is the right circumstance to lead from the back? Let’s dig in.

Almost by definition, leaders are out front, they’re in the lead. They are often portrayed as the tip of the spear. Think of the opening battle scene in Gladiator, with Maximus hard-charging out in front yelling “Hold the line!” as the calvary advances and cuts off any exit for the suffering Germanic tribes.

And yet, in a wolfpack, the slower and weaker wolves are out front, followed by the stronger wolves who are followed at last by the Pack Alpha. It seems this is done to allow the weaker wolves to establish a pace that they can sustain and also to ensure that none are left behind.

I totally get this. When my wonderful wife, Sara, explained to me that our son, Colin, was going to be a boy scout, she quickly added, “And of course you’ll be the outdoor leader.” Which reminds me of my (half-joking) Adventure Guides trail name, “Yes Dear.” So I became the Troop 4 Outdoor Leader, and we went on lots of great overnight hiking treks all across Southern California. It is a massive responsibility, taking other people’s young kids into wilderness. Obviously, my absolute, highest priority, every time, was to never lose track of one of our scouts. So we created some protocols, like stopping at any fork in the trail in order to allow everyone to gather up and to make the trail choice together. And, you guessed it, yours truly was always “Tail Man Charlie” at the very back of the pack. I’m happy to report that I never lost a scout. I did lose one adult, but that is another story, and we found him eventually. Funny side note: kids are great, the only issues I ever had on trail in all of our treks were caused, every time, by an adult.

So how do we apply this notion of leading from the back to our everyday lives? Here’s how I see it.

There are definitely times when a leader should be “out front.” These include:

• When there is danger ahead, and rather than assign the risk to others, the leader steps forward and owns the burden and the risk.
• In a VUCA environment (variable, uncertain, complex and ambiguous), where the leader chooses to be out front in order to respond to events as they unfold, so that they can think and act quickly and own the outcome.
• Whenever a leader is establishing and/or reinforcing the mission, vision, values and culture of the organization. These things are not easily delegated.

And there are other times when perhaps it is best for the leader to fall back, and maybe all the way back. These include:

• When a primary mandate is “nobody left behind.”
• When a leader doesn’t have first-hand knowledge of a particular circumstance, and others do. These are times for a confident leader to trust others and for them to fall back.
• When a leader is otherwise engaged and/or occupied with a high priority issue or active threat and others are available to step forward and engage at the front. The Navy Seals call this Dynamic Subordination, in which the leadership hierarchy becomes fluid and circumstantial.

So there you have it, a simple concept for your consideration. Leaders aren’t always out front, with examples from horses, wolves, scouts and seals. Sometimes we step forward. Sometimes we fall back. And either way, if you’re with me, nobody is going to be left behind. Well, except that one time.

     

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The Inland Empire Covid Run-Up

If you are a business owner or executive team member operating an industrial distribution or manufacturing company in the Inland Empire, you’re probably still picking off the scar tissue from the run-up of industrial rents from 2020 through 2022. The outbreak of Covid in second quarter of 2020 created a run on industrial real estate in the fall of 2020. This was caused by consumers going online to shop and the ports flooding with inbound consumer products that needed to be pumped out of our Southern California warehouses. Pre-Covid, industrial availability rate in the Inland Empire was a healthy 7%. In less than a year and a half, availability rates had gone down to a historic low below 4%, rental rates increased 50% to 90% depending which submarket you’re in, and competition for large blocks of space forced many tenants to sign 7 to 10 year leases where companies were conventionally signing five-year terms.

Commercial Availability Explodes

In response to this historic demand surge, developers began construction on tens of millions of square feet of industrial space throughout the region. Just as those developers began flooding the market with new construction in 2022, Inland Empire tenants began to see a cooling off of consumer online purchasing, and availability rates by the end of 2022 had clipped up to their pre-Covid level as all of the new construction began to deliver. The chart below shows the reality of the Inland Empire, whereby availability rates have been hockey-sticking every year since 2022 and is now double its pre-Covid rate.

Digging into major submarket detail, the bar chart below represents each submarket’s pre-Covid availability rate, relative to today.

Riverside and San Bernardino are both up 50% compared to pre-Covid. The Ontario Airport area has doubled compared to pre-Covid, and Chino/Chino Hills, Redlands/Loma Linda and Moreno Valley/Perris are all 250% over their pre-Covid rate. Corona/Eastvale has returned to their pre-Covid level, and only Temecula is less than the pre-Covid availability rate simply because there was less development interest in the Temecula area during the 2020 to 2022 speculative construction boom.

Manipulations by the Brokerage Community

You’re probably asking, “How come I didn’t know this until now?” Commercial real estate landlord brokers distort the measure of the market by using “vacancy rates“ instead of “availability rates.” If you’re looking through the tenants’ lens, which we have done for over three decades, you need to include all space for lease or sublease that a tenant has to consider, including buildings under construction, occupied subleases and space for lease that’s not yet vacant—all categories of available space that the landlord brokerage industry conveniently excludes from “vacancy.” This is just one of many ways that the big landlord brokerage firms rig the market in favor of landlords to the detriment of tenants.

Sublease Inventory Explodes to Historic Levels

What also has been hidden from business owners is the extent to which sublease inventory is dragging the market down. While sublease inventory in the Inland Empire was relatively tight at 5,000,000 square feet before Covid, as e-commerce companies and 3PLs began a feeding frenzy for space at the end of 2020 through the middle of 2022, sublease inventory virtually evaporated from the market with a low of 2,000,000 square feet. However, as the same industries begin rationalizing their portfolios and space over-commitments in 2023, sublease inventory begin spiking well beyond the pre-Covid rate, hitting a historic high of 18,000,000 square feet at the beginning of 2024…and is stuck there.

These subleases can generally be had at 20% to 30% below market, for shorter terms than landlords might be demanding, and are often offered plug-and-play, fully furnished and racked. The reality is that until this flood of space comes off the market, landlords simply don’t have any pricing power.

Tenants Have More Options Than Ever

To put some real numbers around this, a tenant needing 25,000-50,000 square feet of industrial space has 132 options in the Inland Empire today (28 are subleases). A tenant needing 50,000-100,000 square feet has 123 options (32 are subleases). A tenant needing 100,000-300,000 square feet has 136 options (39 are subleases). A business owner needing 300,000 square feet or more has 72 options (19 are subleases). Never in history have Inland Empire tenants, of any size, had more building options for lease and sublease.

Yet Landlords and Their Brokers Still Push High Prices

You’re probably wondering why prices haven’t come crashing down given all of this resetting of the market—shouldn’t rents be back down to their pre-Covid level, or less? While we’re seeing slight decreases in asking rents, the landlord brokerage firms have found another way to rig the market against the commercial real estate tenant. While landlords don’t formally collude, they indirectly share a tremendous amount of information and anchor off each other’s pricing. With the brokerage community working as landlords’ proxies, and too frequently acting as conflicted dual agents representing both the landlord and the tenant in the same transaction, landlords have full transparency as to what each other is doing in real time, and often what buildings a tenant is looking at. Brokers publish every lease transaction within their company internal databases, and that data is commoditized and traded with other brokers, and shared with other landlords the same big brokerage firms represent. Tenants’ confidential information rarely stays that way for very long, and landlords know who’s doing deals, and at what terms, while tenants are lured into thinking prices are the same as they were back in 2022.

What Business Owners and Executive Teams Need to Do Now

Any serious negotiation requires accurate information, leverage and the right mindset. Trying to represent yourself in this dynamic market with the flood of options—and landlords and their landlord listing brokers working against you—is a fool’s errand. Tenants need to engage a tenant representation company as their business partner, and as their advocate whose interests are aligned with theirs when considering expansion, relocation or lease renewal/restructuring. Ultimately, the “customer” in a relationship is the party that pays for a good or service. The tenant writing a rent check is the customer in the landlord/tenant relationship, but tenants have never been treated where “the customer is king.” It’s time for tenants to take their power back by fully vetting and understanding the realities and extraordinary opportunities that today’s market presents for you. At Hughes Marino, with one of our co-founders being from the Inland Empire, we have a three-decade track record of delivering results for tenants, as they are our entire firm’s customer, and not being conflicted with trying to represent landlords with any kinds of services at the same time.

Market statistics provided by CoStar Group.

     

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From 2020-2022, the biotech industry was the standout of the U.S. capital markets, thanks to the vital role the industry played in the Covid-19 pandemic response and the unprecedented capital investment that flowed into the industry for the diagnosis and treatment of all disease conditions. With that fresh capital, biotech companies leased millions of square feet of biotech wet lab space from 2020-2022 in an unprecedented surge that real estate developers and their landlord brokers thought would last for many years to come. In contrast, back in 2023, Hughes Marino began sounding the alarms that a perfect storm was on the horizon for the San Diego region’s biotech wet lab market, that would affect all U.S. wet lab markets. That perfect storm would be comprised of 1) changes in the capital markets that would negatively affect demand, 2) growing wet lab sublease inventory that would unexpectedly increase supply and limit landlords’ pricing power and 3) record levels of excessive new wet lab construction and office-to-lab conversions that would exacerbate the supply problem. We forecasted that these factors would collectively lead to a historic wet lab supply and demand imbalance, which is exactly what has occurred.

The Torrey Pines Story

Since the 1980s, with its proximity to San Diego’s prominent research institutes and UCSD, Torrey Pines had been the most desirable biotech submarket in the region. With historically very little availability and high prices, biotech companies began to peel off “The Mesa” back in the 1990s, initially moving into Sorrento Mesa, and into UTC and Campus Point in the 2000s, with a sprinkling of other companies pioneering Torrey Hills and Del Mar Heights in the 2010s.

Over the last 30 years, Torrey Pines has lost a bit of its caché as the quality of real estate in the surrounding submarkets elevated, and the price premium that tenants were willing to pay for Torrey Pines reduced. Back in 2021, with the lack of Torrey Pines wet lab space and rents there skyrocketing to $6.50 NNN per square foot, tenants shifted their requirements from The Mesa, to adjacent value submarkets where rents were generally $4.50-$5.50 NNN. A victim of its own success, Torrey Pines availability tightened to the low single digits in 2021 and 2022, as landlords held firm with asking rents in the $6.50-$7.00 NNN range. Tenants then shifted their space requirements away from Torrey Pines, just as landlords were bringing on new supply in Torrey Pines by renovating older buildings and demolishing several to add more density.

Torrey Pines wet lab availability began spiking in 2023, but you would not have realized it at the time as the landlord brokerage firms’ sleight of hand “vacancy rates” reports insisted the market remained tight. But the big landlord brokerage houses do not include buildings under construction or renovation that began coming online in 2022 in their vacancy calculations, nor do they include the quantity of sublease spaces that began to flood the market in 2023.

Measuring the market through the tenants’ lens considers all space “available” for lease or sublease in all buildings, even if they are under construction or conversion. Through that “availability rate” recalculation, a very different story was revealed whereby Torrey Pines wet lab availability broke into the teens in 2023, and today is 29% for just over 1.2M square feet of available space, which includes over 500,000 square feet of sublease space in 14 subleases from 5,000-80,000 square feet. While these numbers are eye popping, it’s about to get worse for building owners. BioMed Realty has quietly bought the five-building former Pfizer campus at the end of Science Center Drive of approximately 630,000 square feet, which BioMed will remodel and reposition when Pfizer relocates and downsizes to 250,000 square feet in Torrey Hills. When these five former Pfizer buildings hit the market, availability will pop to a record breaking 45%, making Torrey Pines one of the softest biotech wet lab submarkets in the United States.

Sorrento Valley/Sorrento Mesa—How the Value Market is Performing

Looking east to Sorrento Valley and Sorrento Mesa, the story is similarly staggering. Sorrento is the heart of where most of the office-to-biotech lab conversions occurred from 2022-2024, as half of the office space in Sorrento Mesa was renovated into wet lab space in anticipation of ongoing supply shortages caused by the 2020-2021 wet lab demand surge. Sorrento is also the heart of where developers were able to find available land, or low density industrial or office parks that could be torn down and redeveloped into new state-of-the-art multi-story lab buildings, all completed at the same time in 2024-2025. This flood of conversions and new speculative construction is the major contributor to the over 3.2M square feet of available Sorrento wet lab space now dragging down the market, which includes approximately 30 subleases ranging from 3,000-60,000 square feet, totaling 650,000 square feet.

None of this carnage even includes all of the dozens of available wet lab spaces for lease and sublease in UTC, Torrey Hills, Del Mar Heights, Governor Park…and Downtown if you include the 1.65M square foot IQHQ RaAD project on the San Diego bayfront.

A Historic Supply Crisis Leads to a Tenant Favorable Market

The market has become flooded with options, and just digesting and comparing them is a complicated process. While there are great values for early-stage startup or restart companies of less than 10,000 square feet, the market is particularly soft for larger space, where demand is simultaneously most anemic. If your company needs 15,000-25,000 square feet of wet lab in either Torrey Pines or Sorrento Mesa today, you have 43 properties that have 61 options available for you in that size range. If you need 30,000-40,000 square feet of wet lab space, there are 35 buildings that can satisfy your requirement. Needing 40,000 square feet or more? There are still 30 building options! Many of these options have been on the market for more than a year, and a surprising number for more than two years, particularly most of the wet lab conversions and new speculative construction.

What can life science tenants expect in the coming years? While landlords and their landlord leasing brokers attempt to maintain the opaqueness and have yet to lower asking prices, lease terms have materially softened for tenants. Rental rates are off by 20%-25%, free rent is commonly equal to a month per year of lease term and tenant improvement concession packages are whatever is required for the tenant’s build out. More importantly, with the flood of second-generation space and sublease space, tenants can now sign much more flexible commitments from 2-3 years…even on renewals…and don’t have to be tied up in long-term contracts during these times of uncertainty. The critical mistake tenants make is to work “direct” with their landlord or through their landlord’s leasing broker proxy—that is not how you are going to learn what your options are, and what can be crafted and negotiated for you in today’s market. Proven by multiple life science client projects our team is advising on, landlords’ motivations are heightened, and creativity, transparency, independence and leverage rules the day.

Market statistics provided by CoStar Group.

     

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By Owen Rice & Riley Hillis

As a firm that specializes in representing tenants and owner/users of commercial real estate, we spend every day protecting the interests of companies. That singular focus gives us a real edge, especially in moments like this when the market is shifting quickly.

The reality is, banks are quietly pulling back from commercial real estate lending, and while this trend has been unfolding for a while, we are now seeing the full effect of a market defined by elevated borrowing costs, tighter underwriting and a shrinking pool of willing lenders.

This isn’t simply a reaction to interest rate volatility, it’s structural. And whether you lease or own your space, it’s something you need to understand.

Why Are Banks Pulling Back?

Rising interest rates and regional bank failures play a role, but there’s a deeper driver: Basel III regulations. Basel III is a global set of banking rules designed to prevent another financial crisis. One key requirement? Banks must hold more capital against riskier loans, including commercial real estate, which makes commercial real estate loans more expensive for banks to carry.

As a result, they provide fewer of them, or they charge more to do so. Either way, borrowing gets harder and more expensive. This pullback is most pronounced amongst regional and mid-sized banks, longtime staples of commercial lending. As they retreat, we’re seeing a widening credit gap.

Owner/Users: Expect More Friction

If you own and occupy your building, or are thinking about doing so, you’re in the “owner/user” category.

The good news is that SBA loans remain available, and banks are still active here, especially when other banking relationships are in play. However, the process is slower and more conservative, with tougher underwriting and longer timelines.

At the same time, alternative capital is stepping in. We’re seeing private lenders and life insurance companies offering more flexible structures, higher leverage and faster execution than many traditional banks. They are not always household names, but they’re savvy, creative and well-positioned for this market.

We are not debt brokers, but navigating this landscape is part of what makes us exceptionally good at what we do. We understand how capital flows, who’s lending and how to structure a deal that works, even when the lending environment doesn’t.

Tenants: You’re Not Immune

Even if you’re not borrowing a dollar, this is how it still impacts you:

• Landlord Capital Constraints: Tighter lending conditions make it harder for landlords to fund tenant improvements or building upgrades. In many cases, that means less value delivered, or more cost passed onto tenants.
• Refinance Risk: Owners facing loan maturities are contending with far more expensive debt. Some will pass those costs along in rent and others might delay improvements or sell, creating instability in your lease.
• Deferred Maintenance: To conserve capital, many landlords are quietly pushing off repairs. The building might look the same, but its performance for your team can deteriorate.
• Deal Execution Risk: Refinancings, recapitalizations or pending sales can stall or even unravel your lease negotiations. We’ve seen it happen.

Bottom Line

Whether you lease or own, today’s commercial real estate decisions are shaped by capital. We help companies navigate this complexity with creativity, clarity and the kind of strategic guidance that only comes from representing tenants and owner/users. If you’re considering a lease renewal, relocation, purchase or sale, now is the time to approach it with strategy, not guesswork.

Before partnering with a broker, be sure to ask the kinds of questions that reveal who truly understands the current market:

For tenants: “How do rising lending spreads and Basel III regulations affect landlord behavior, and how might that impact our lease terms or tenant improvement allowance?”

For owner/users: “If we sell our building and lease it back, what are the key valuation levers buyers will focus on, and how do we control the narrative to protect long-term value?”

The right broker will have clear, informed answers. The wrong one will hesitate. As tenant representation advisors, we help you navigate this complexity, protecting your leverage, uncovering hidden risks and structuring deals that hold up no matter what’s happening behind the scenes.

     

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By David Marino

A fundamental tenet of real estate valuation and development is that land gravitates to the highest and best use. The United States has a residential real estate crisis, where Zillow reported in 2024 that there’s a shortage of approximately 4.5 million housing units.

Simultaneously, the U.S. office sector is in crisis. According to CoStar, about two-thirds of the United States’ largest metro markets are running above 20% availability, with some like Denver at 26% and San Francisco at 32.4% as of the first quarter of 2025. While these percentages are high, it's on a base of office space that's grown substantially in recent years, creating a real dilemma where there's a historically significant amount of office space available for lease and sublease today.

Office Space Converted to Residential, but Without Meaningful Effect

It’s my estimation that there is at least 500 million square feet of office space that needs to come off the market in the next five years to provide some stability for the office market sector. That won’t happen through leasing, as in my professional estimation, corporate America is going to continue to shrink its footprint over the next five years as the balance of the pre-Covid leases all expire.

In response to this supply glut, forward-looking municipalities have been scrambling to rezone office buildings for residential use, and savvy developers are looking to buy candidate office buildings for residential conversion.

However, many office buildings cannot be converted due to their floor plate size or shape, structural or other building systems limitations, and a multitude of other reasons. RentCafe estimates that there are approximately 71,000 apartment units currently under construction and planned through office conversions. Conversion of office to residential isn’t the answer to taking office out of inventory and addressing our national housing shortage. At that pace, we'll satisfy the 4.5 million housing unit shortage in exactly 63 years!

A Solution: Tear the Office Buildings Down

Conversion of office to residential is a drop in the bucket, but the supply residential spigot is about to be turned on across the United States, through the demolition of office buildings and using the land to build multifamily residential. I've noticed some savvy developers and investors are finding commercial office buildings to purchase through foreclosure or at steep discounts, where the value is based on the underlying residential land development potential minus the office building demolition cost.

In real time, the conversation is shifting from conversion of office to residential, instead to tearing down office buildings and repurposing the underlying land to its highest and best residential use. There are multiple examples of this happening in real time throughout major metro areas across the U.S., most not on the market year as their completion is still 2-3 years away.

The Need for Widespread Zoning Changes—From Commercial to Residential

This could be the future for much of America’s excess office space—complete demolition to make way for the essential residential real estate that our country needs. Smart municipalities are already starting to figure this out, and I think the best thing states and cities can do is to rezone their entire office markets to allow for residential. I’m not talking about one-at-a-time project rezoning, but rather a complete and broad rezoning of all commercial offices for residential use.

Our cities changed in the last 70 years, from having people live and work in the same area, to building suburban residential communities that operate at a distance from commercial centers. This forced people onto mass transit and into their cars, creating congestion and pollution.

By tearing down office buildings, which often exist near mass transit nodes and generally along major transportation corridors, we have an opportunity to put more residential real estate where the office job centers remain and ease congestion. This could improve companies’ efforts to implement return-to-office policies, as a common objection employees have to coming into the office is the dollar cost and opportunity cost of commuting. In this way, we could simultaneously address the problems of too much office space, too little residential, return-to-office, pollution and congestion in our urban areas.

Positioning the Real Estate Industry for Future Success

In addition to rezoning commercial to residential use, municipalities could reduce the amount of impact fees they charge for new residential development on these former office sites. For example, municipalities charge traffic mitigation fees, yet these redevelopment opportunities could reduce traffic and congestion by their very nature. If an office building is torn down, why would a city charge new water/sewer hookup fees when the office building demolition will remove hundreds of toilets, sinks and dishwashers that are already hooked up?

Reducing the cost of development is an essential step if we expect to make housing more affordable and available, and these are easy places to start. Cities could also fast-track permits and inspections for these projects, as delays cost developers real money and contribute to the lack of availability of housing at the speed and cost that we need it delivered.

     

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At Hughes Marino, we take inspiration a step further with our “HM-isms”—phrases that we’ve cultivated over the past 14 years from our teammates and guest speakers, and from influences around the world. Designed to inspire, these HM-isms motivate and provide valuable life lessons across all aspects of our days, both professionally and personally. As a team that is constantly on the lookout for new inspiration, this ever-growing list (currently at 40+!) has also evolved into an important aspect of our culture that we’ve been building since we first opened our doors. As a result, our HM-isms have become a unique, common language we share as a high-performing, tight-knit team. We all know what they mean, and we refer to them to level-set when we’re trying to convey a point we all understand. They come up during casual hallway conversations, within team meetings, at company retreats, as phrases on our very own Hughes Marino gear and even as concepts discussed in client meetings. You never know when an HM-ism will pop into our everyday life at Hughes Marino!

We hand-picked these nine specific HM-isms to share in hopes that these phrases and the background behind them could be a jumping off point for you as a business leader to share with your own team, or even with clients. You might even want to develop your own company-isms to highlight what makes your own company culture so unique and a category of one. We hope you find a few nuggets that resonate with you and your leadership style, and that you can use them to help fuel your team, as they have fueled ours for over a decade.

1. Success is not an entitlement. You have to earn it every day.

Starbucks is known as one of the most successful global businesses, but in 1971, it was just starting as a small operation in Seattle, riddled with challenges, obstacles and learning curves. The success of the Starbucks organization as we know it is a result of years of painstakingly hard work, business strategy and a dedication to excellence, earned each and every day. Coined by Starbucks founder Howard Schultz, this defining statement is a great reminder to continue to strive for excellence, earn it every day and never take success for granted. Jason, Shay and their family had the opportunity to spend a private morning with Howard in Seattle while he was still Chairman & CEO, so this particular HM-ism has a very special meaning.

2. Hardest Workers In The Room

Who doesn’t want to be known as one of the hardest workers in the room? Inspired by one of Jason’s favorite icons, when Dwayne “The Rock” Johnson was asked about his secret to success, he simply replied, “Be humble. Be hungry. And always be the hardest worker in the room.” As one of the most famous professional wrestlers and actors in the world, one could say he definitely leads by example! Everyone on our team always strives to be the hardest worker in the room (and in our industry) so this quote of his resonates with us.

3. Relentless Offensive Attack

On or off the court, we believe in this motto from NBA great and friend to Hughes Marino, the late Bill Walton. When asked about his time learning from coaching legend John Wooden, he relayed fascinating details regarding how little Wooden cared about what their opponents were doing: “We never watched film, we never tried to study other teams. We focused on relentless offensive attack.” Success in business is won through relentless offensive attack. Just like it sounds: don’t let up. Don’t stand by the sidelines. Be out there every day, earning success and outrunning the competition. Be relentless, and never get comfortable after a win.

4. Champions of the Underdog

In movies, in sports, in life—who doesn’t love rooting for the underdog? But even more importantly, what do you do to support the underdog? We’re not shy to admit it: Hughes Marino is proud to be the company that’s changing the commercial real estate industry that has traditionally worked in favor of landlords. We are committed to serving tenants, who are the lifeblood of the industry and who truly are the underdogs when negotiating with huge corporate landlords. No matter the size of the client, we fiercely advocate for all tenants, and consider it our mission to protect them. How is your company disrupting your own industry to fight for the underdog?

5. Never Wing Anything

Professional athletes, especially those at the top of their league, prepare incessantly and are intentional with every single thing that they do. Kobe Bryant’s work ethic was unmatched—in high school he would show up to school at 5am to practice for two hours before class, and during his career, he famously worked out and trained six hours a day, six days a week, for six months straight. Michael Jordan was quoted as saying: “My whole life had always been about being the best basketball player I could be. I had absolute tunnel vision—everything was channeled toward that.” Tom Brady had an unbelievably meticulous preparation routine before every practice and every game. The amount of preparation that champions do to win is unmatched, and the same can be said in the business world. Never wing anything—come prepared and ready for anything.

6. Handle Hard Better

Kara Lawson, the head coach of Duke’s women’s basketball team, shared a philosophy with her team that went viral. “We all wait in life for things to get easier. It will never get easier. What happens is you handle hard better…so make yourself a person that handles hard well.” How often do we think that if we just hit the next milestone in life, things will get easier? The harsh reality is that things never get easier. Through determination, time, courage and effort, we learn to handle the hard things better. Our mind gets sharper, our body gets stronger, we learn new skills and we become more resilient, all in the pursuit of life’s meaningful goals. Know that with every challenge we overcome, we will be even more equipped to handle hard better next time. Don’t get discouraged if it’s hard—it's supposed to be.

7. Onward

This adventurous word is often also used by Starbucks founder Howard Schultz. Before his success with Starbucks, Howard owned a small Seattle coffee shop where he signed off the company’s first memo to his team of two employees with “Onward,” a phrase that he felt embodied their ambition for the future. Since our team shares this same passion to revolutionize our own industry, “Onward” has blossomed into an HM-ism that we love to end emails and meetings with, as a positive way to look toward the future with passion and teamwork, and enjoy the journey together while doing so.

8. Run The Hill

In every industry, it’s essential to never get complacent. One of our teammates shared a story of his time playing football for the University of San Diego under head coach Jim Harbaugh, former NFL quarterback and current head coach of the Los Angeles Chargers. In the spirit of never giving up and working harder for their goals, Coach Harbaugh would routinely ask: “How can I make things suck more?” He answered by setting an example every day for the players he coached by running—not walking, or riding in a cart—up a steep hill from the practice field to the locker room, just to “make things suck more.” It was his way of demonstrating to his players that you never stop putting in your full measure of effort, even if you think you already gave it your all. Growth is often made when we push ourselves to go the extra mile. Always be ready to make that full measure of effort, even if the last thing you want to do is run up thathill. Doing so will pay off in the long run, and will build character along the way!

9. Federer It

While we need to give it our all in life and at work, we also can’t forget that we need to take time to rest and reset. A Wall Street Journal article by Jason Gay entitled “We Need to Relax Like Roger Federer,” has elevated the way our team enjoys the journey (our core value #3) outside of work. The article examined the correlation between tennis champion Roger Federer’s continued amazing success and extensive rest, both physically and mentally. This also can be said about workplace success, as ample time off for teammates helps them to rest, recharge, and ultimately become more inspired and innovative in life and at work. It’s a great reminder for any business to give their valued team time to “Federer it” to help boost company energy and morale!

We hope this serves as inspirational fuel for you and your team as much as it does for us. Onward!

     

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By Jason Hughes

How can we identify what is wasteful of our time and resources? This seems to be the pertinent question that is top of mind for every business leader, especially today, as efficiency and costs are under the microscope. As a company leader who also happens to work within commercial real estate, I have conversations surrounding this question with other executives and my own team on an almost daily basis. This is an incredible opportunity for companies to reduce the amount of wasteful spending, reconsider their top priorities and reimagine their businesses in ways we haven’t been able to for a while. While scrutinizing your budget takes a concerted effort and may ruffle a few feathers along the way, the positive impacts on your bottom line and the future success of your organization are well worth it.

But where do you start? Fortunately, I have a straightforward answer—that doesn’t involve layoffs. With commercial real estate lease costs as one of a business’s top three fixed costs for companies that occupy space, real estate is the perfect place to begin.

Here are some simple ways that companies can audit their own real estate expenses to save money to invest back in other aspects of their businesses.

The Easy Targets—Unnecessary Expenditures

First, I’ll start with a real-time example at Hughes Marino. After a self-audit of our expenses, at one of our locations we realized we were paying for parking spaces that no one was even using. We were able to effortlessly eliminate $2,500 per month, equating to $30,000 per year in parking alone, and quickly. While that cost might not break the bank, why pay for a service or amenity you aren’t even using? A simple review of your lease with the help of a tenant advisor could quickly save you money that doesn’t affect your company—aside from positively increasing your bottom line. If my parking example doesn’t apply to you, ask yourself “What is my version of a random charge that I’m not aware of?” It might not be real estate-related, but I can guarantee you’ll find at least a handful of charges you’ve been paying over the years for services that aren’t even utilized anymore. Another charge we recently uncovered was for cable TV services for a TV in an office that hasn’t once been turned on in over four years. Maybe your company has unnecessary duplicative licenses for software, or multiple accounts from the same provider. Implementing zero-based budgeting can also quickly identify charges you may have been paying for years that just don’t make sense anymore. Without a thorough audit, you’ll never know the money that’s being wasted needlessly.

Be Aware of Operating Expense Errors

If you’re leasing space for your business, you’re most likely aware of the “operating expenses” or “CAMs” (Common Area Maintenance) that are included in your lease, such as utilities, insurance, property taxes, maintenance, landscaping, etc. And odds are, when you receive the bill from your landlord, you probably pay it without batting an eye. But if you knew the amount of errors our team has caught that were charged to our clients by landlords (most likely on accident), you would probably give your bill a second, or even a third look. It’s not to say all landlords overcharge, but there is always room for error, and unless you know what to look for, you run the risk of being overcharged for months, or even years. In one case, we found millions of dollars in overcharges for a client, and other clients tens of thousands or more. While your team may be able to find some obvious overcharges, we always recommend consulting a professional lease audit team (we have such a team), that knows the ins and outs of what to look for that might not be common knowledge to others not in the industry.

Paying for Unneeded Space

Maybe your headcount or company situation has changed, despite having years left on your lease, and you feel stuck. Whether your lease is expiring in the next 12 months, or 4+ years from now, you always have options, especially if you have the right real estate team in place to ensure you’re not leaving money on the table or missing an opportunity for a strategic shift. Depending on your current lease expiration and needs, there are steps you can take to reduce costs or prepare for a move, expansion or space reduction. Luckily, this is an area we specialize in, and our team is constantly developing new real estate strategies that fit the needs of our clients.

Opt for Energy Efficient Practices

While this might not make a huge dent in your budget initially, opting for ways to be more sustainable will pay off in the long run. Conduct an energy audit. This might seem obvious, but transitioning to a paperless system will reduce the amount of space you need to operate your business, where you can cut down on real estate expenses. Law firms, for instance, are opting for digital libraries and filing systems. This can open up space for new conference rooms and offices, or even downsize a real estate footprint to save on unnecessary costs (as mentioned previously). Energy-efficient appliances and asking your team to shut down their computers at night can reduce your energy bills. On a micro scale, by installing energy efficient light bulbs that might be more expensive upfront, you actually save on electricity in the long run, as they use around 75% less energy, and last about 10 times longer than traditional incandescent bulbs.

In an age where efficiency is top of mind, every company should take some time to scrutinize their spending. Embracing these changes can spark creativity in resource management, turning a routine audit into a rewarding challenge. Here’s to smarter spending and a stronger bottom line!

     

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In an article published by The Boston Globe, industry experts, including our own Boston managing director, Nick Amarante, shared insights into the state of Boston’s biotech and life sciences industry, from layoffs to funding pullbacks and pipeline slowdowns. But the one underlying theme that deserves more attention is real estate.

Vacancy is at record highs, tour volume is light and real demand is scarce. Yet asking rents remain anchored to a different era, one back when capital was inexpensive, and demand felt limitless.

Why the disconnect? Because we’re still digesting the historic lab development run-up from the Covid boom. Billions were invested in new supply, and that supply is now hitting the market just as demand has slowed to a crawl. It could take the better part of a decade to absorb the excess.

“Candidly, it’s the worst market in history for landlords to operate in,” Nick shared with The Boston Globe, emphasizing the increasing pressures facing property owners across New England.

For tenants, this creates plentiful opportunity, if you know how to find it. Subleases and direct opportunities are available. Landlords are more flexible, though they’re not advertising it. The right tenant advisor will assess your needs and work with you to build leverage and cultivate the right real estate strategy for your business. If your lease is coming up or your footprint no longer fits your business plan, Hughes Marino’s world-class advisors are here to help.

A version of the referenced Boston Globe article was republished on STAT News on April 14, 2025.

     

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