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<ul><li>Founded in 2022 by INSEAD alumni <keyword id="7467536" type="General" weightage="50" keywordseo="annu-talreja" source="Orion">Annu Talreja</keyword>, founders <keyword id="15710343" type="General" weightage="50" keywordseo="piyush-chitkara-and-jagmohan-garg" source="Orion">Piyush Chitkara and Jagmohan Garg</keyword>, <keyword id="4509029" type="General" weightage="100" keywordseo="accacia" source="Orion">Accacia</keyword> is an AI-enabled SAAS platform providing decarbonisation strategies. </li><li>According to a World Economic Forum report, real estate contributes to 40% of global carbon emissions. </li><li>Accacia will use the capital to expand its presence across Southeast Asia, the Middle East, the US and Canada over the next year. </li></ul>Accacia, a platform focused on providing decarbonisation strategies to real estate and infrastructure sectors, closed $2.5 million in seed funding led by Accel and B Capital. Blume Ventures, Good Capital, Zerodha’s Rainmatter Fund and Canada-based <keyword id="15710342" type="General" weightage="50" keywordseo="loyal-vc" source="Orion">Loyal VC</keyword>, and several leading angel investors also participated in the round. Accacia is an AI-enabled SAAS platform that provides real estate developers, asset managers and financial institutions the key metrics and decisions they need to decarbonize their portfolio. It was founded in 2022 by INSEAD alumni Annu Talreja, along with Piyush Chitkara and <keyword id="1921066" type="General" weightage="50" keywordseo="jagmohan-garg" source="Orion">Jagmohan Garg</keyword>. “Real estate sector lacks robust tools to measure climate risks and define decarbonisation strategies. We are working with large asset managers, developers, and real estate operators to help them with tools they need to define and monitor their path to net zero,” said Annu Talreja, founder and CEO at Accacia. According to a World Economic Forum <a href="https://www.weforum.org/agenda/2022/11/how-we-can-decarbonize-the-real-estate-sector/">report</a>, real estate contributes to nearly 40% of global carbon emissions. Unsustainable or ‘brown’ buildings are facing devaluation, making real estate review its future outlook. “Brown buildings–and their notoriously sizable carbon footprints–face aggregated devaluation in the real estate sector and are now starting to trade at discounts,” <keyword id="4357285" type="General" weightage="50" keywordseo="christian-ulbrich" source="Orion">Christian Ulbrich</keyword>, global CEO and president at JLL said. Decarbonisation of real estate is one of today’s biggest and most critical opportunities – a staggering $18 trillion of investment is required over the next decade to get the real estate industry to net zero, says Accacia in a statement. “Only 3,000 of roughly 40,000 listed companies currently report their emissions, making climate reporting and decarbonisation a massive opportunity. At Accel, we firmly believe that SAAS is the solution to scale-up net-zero efforts across sectors,” said <keyword id="1019443" type="General" weightage="50" keywordseo="prashanth-prakash" source="Orion">Prashanth Prakash</keyword>, partner at Accel. Accacia has deployed its solutions to over 20 million square feet of institutional real estate across Asia. The company will use the capital to expand its presence across Southeast Asia, the Middle East, the US and Canada over the next year. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/telecom/news/unlimited-wifi-plans-for-home-check-the-full-list/articleshow/90908792.cms">Unlimited wifi plans for home — check the full list below</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/droneacharya-aerial-innovations-ipo-set-to-open-next-week-on-december-13-2022/articleshow/96005315.cms">DroneAcharya AI IPO set to open next week on December 13; GMP at ₹25 per share</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/kolkata-hyderabad-and-pune-remain-indias-most-affordable-residential-cities-jll/articleshow/96001910.cms">Kolkata, Hyderabad and Pune remain India’s most affordable residential cities: JLL</a>

Real estate decarbonisation startup Accacia raises $2.5 million in seed round

<ul class="summary-list"><li>Many US businesses have taken steps to reduce supply chain risks.</li><li>Some firms are bringing manufacturing jobs back to the US, but finding workers has been a challenge.</li></ul>The push by US businesses to <a target="_blank" href="https://www.businessinsider.com/us-china-relations-reshoring-manufacturing-jobs-made-in-america-2023-10">make more stuff in America</a> has an ongoing challenge: It's hard to find workers.That's due in part to the country's <a target="_blank" href="https://www.businessinsider.com/is-a-recession-coming-signals-indicators-unemployment-rate-layoffs-jobs-2024-1">low unemployment rate</a>, which could make it difficult for companies to bring manufacturing jobs back to the US, says Christian Ulbrich, CEO of the real estate services company JLL."There aren't any people to do the work," Ulbrich told Business Insider editor in chief Matt Turner at the recent World Economic Forum.Ulbrich says this stands in sharp contrast to Mexico, whose <a target="_blank" href="https://www.businessinsider.com/us-trade-imports-july-china-mexico-vietnam-census-supply-chain-2023-9">growing manufacturing base</a> could entice companies to make supply chain investments there, rather than in the US.Some corporations, like <a target="_blank" href="https://www.businessinsider.com/made-in-america-companies-bringing-manufacturing-back-to-us-2022-7">General Motors</a> and Intel, have — to the delight of the <a target="_blank" href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/04/fact-sheet-biden-harris-administration-delivers-on-made-in-america-commitments/#:~:text=This%20includes%20nearly%20%2480%20billion,and%20critical%20minerals%20since%202021.">Biden administration</a> — already announced plans to shift more of their supply chains and manufacturing back to US shores, often called "<a target="_blank" href="https://www.businessinsider.com/made-in-america-products-more-expensive-2022-12">on-shoring</a>" or "re-shoring." The US government is also investing billions of dollars to boost the domestic production of <a target="_blank" href="https://www.businessinsider.com/biden-plans-replace-government-fleet-with-electric-vehicles-clean-energy-2021-1">electric vehicles</a>, <a target="_blank" href="https://www.businessinsider.com/tsmc-arizona-kate-gallego-semiconductor-industry-companies-phoenix-nonstop-flights-2023-10">semiconductor chips</a>, and <a target="_blank" href="https://www.businessinsider.com/biden-lends-billions-ford-for-3-ev-battery-plants-2023-6">batteries</a>.But labor force shortages have already proven to be an obstacle to the "Made in America" movement. Even as the <a target="_blank" href="https://www.businessinsider.com/labor-shortages-immigration-retirement-covid-2022-12">pandemic-era labor shortage</a> has eased, the demand for <a target="_blank" href="https://www.businessinsider.com/teacher-shortage-schools-nurses-daycare-costs-inflation-rate-retail-workers-2023-10">construction</a> and <a target="_blank" href="https://www.businessinsider.com/us-is-experiencing-factory-boom-but-finding-workers-is-difficult-2023-7">factory</a> workers has continued to exceed supply.<h2>Some companies are turning to Mexico amid US labor force challenges</h2>Since 2020, the <a target="_blank" href="https://www.businessinsider.com/china-trade-war-covid-companies-moving-supply-chains-2022-12">COVID-19 pandemic</a>, Russia's <a target="_blank" href="https://www.businessinsider.com/supply-chains-reasons-always-screwed-shipping-geopolitics-climate-big-ships-2023-12">invasion of Ukraine</a>, the world's <a target="_blank" href="https://www.businessinsider.com/supply-chains-struggle-summer-reason-climate-change-covid-costs-2023-9">changing climate</a>, and, more recently, the attacks by <a target="_blank" href="https://www.businessinsider.com/houthi-attacks-red-sea-raise-fears-shipping-supply-chain-disruptions-2023-12">Houthi rebels in the Red Sea</a> have thrown a wrench in global supply chains. These factors, along with mounting fears of a possible <a target="_blank" href="https://www.businessinsider.com/taiwan-war-impact-us-economic-growth-first-year-china-chips-2024-1">Chinese invasion of Taiwan,</a> have persuaded some US businesses to bring the production of their goods <a target="_blank" href="https://www.businessinsider.com/made-in-america-companies-bringing-manufacturing-back-to-us-2022-7">closer to home</a>.Companies like <a target="_blank" href="https://www.businessinsider.com/us-imports-more-goods-from-mexico-than-china-for-first-time-since-2003-2023-9">Ford</a> and <a target="_blank" href="https://www.businessinsider.com/tesla-mexico-factory-genius-move-for-cheap-car-expert-says-2023-3">Tesla</a> have "<a target="_blank" href="https://www.businessinsider.com/supply-chains-reshoring-nearshring-follow-apple-out-of-china-2022-12">near-shored</a>" or "friend-shored" part of their supply chains, relying more on countries like Mexico that are <a target="_blank" href="https://www.businessinsider.com/mexico-is-now-americas-top-leading-trade-partner-2023-9">close physically and politically</a> — and still often <a target="_blank" href="https://www.reuters.com/world/americas/mexican-businesses-warmed-by-glow-nearshoring-dawn-2023-11-06/">cheaper</a> than the US. Mexico received $29 billion in foreign direct investment during the first half of last year, Reuters <a target="_blank" href="https://www.reuters.com/world/americas/mexican-businesses-warmed-by-glow-nearshoring-dawn-2023-11-06/">reported</a>, up 5% compared to 2022. Over half of this investment was in the industrial sector.If countries like Mexico can de-risk supply chains and offer an adequate labor supply for some businesses, then perhaps a surge in "near-shoring" is a good thing for the US economy. Lower labor costs could mean <a target="_blank" href="https://www.businessinsider.com/us-china-relations-reshoring-manufacturing-jobs-made-in-america-2023-10">cheaper goods for US consumers</a>, and if most Americans are employed — or don't have the requisite skill sets for manufacturing roles — maybe losing out on some jobs isn't such a bad thing.On the other hand, Susan Golicic, a supply chain professor at Colorado State University, said that the types of manufacturing jobs created by on-shoring have typically <a target="_blank" href="https://www.businessinsider.com/how-manufacturing-factories-save-america-economy-future-crappy-service-jobs-2022-7">paid more than many service industry jobs</a> — and thus should be attractive to many Americans, whether they already have jobs or not.<h2>Mexico is also supplanting other US trade partners</h2>Due in part to this near-shoring shift, Mexico eclipsed Canada and China last year to become <a target="_blank" href="https://www.businessinsider.com/us-mexico-china-trade-world-economy-changing-2023">America's top trade partner</a>, accounting for over 15% of goods exported and imported by the US. Last May, Mexico's global exports were the <a target="_blank" href="https://www.bloomberg.com/news/articles/2023-06-27/mexico-s-booming-exports-provide-more-evidence-of-nearshoring">second highest</a> on record."Many companies are looking at Mexico for production in lieu of Asian countries to be closer for any major supply chain disruptions that often occur in Asia," said Golicic, adding, "Mexico is close, and labor is still a lot lower than the US."The labor costs of manufacturing in Mexico are also <a target="_blank" href="https://www.businessinsider.com/toys-clothes-electronic-prices-going-up-asia-worker-shortage-2023-8">less expensive than in China</a>, where manufacturing wages have <a target="_blank" href="https://www.businessinsider.com/toys-clothes-electronic-prices-going-up-asia-worker-shortage-2023-8">risen in recent years</a>, Andres Abadia, chief Latin America economist at Pantheon Macroeconomics, told BI. Mexico's median age is <a target="_blank" href="https://worldpopulationreview.com/countries/mexico-population#:~:text=The%20median%20age%20across%20the,at%2028.3%20years%20of%20age.">roughly 30</a>, he added — compared to <a target="_blank" href="https://www.worldeconomics.com/Demographics/Median-Age/China.aspx#:~:text=China's%20median%20age%20is%2037.9%20against%20a%20global%20value%20of%2030.3%20years.">nearly 40</a> in China — which has contributed to a strong labor supply."Companies moving to Mexico will have greater visibility, control and influence on HR, and also on the quality of their goods, and will enjoy shorter delivery times," he said.But manufacturing in Mexico also isn't without its challenges. Limited infrastructure, <a target="_blank" href="https://www.businessinsider.com/mexico-is-now-americas-top-leading-trade-partner-2023-9">inconsistent energy and water supply</a>, and the threat of <a target="_blank" href="https://www.businessinsider.com/fragmentation-in-mexico-war-on-drugs-created-400-new-gangs-2021-10">gang violence</a> could each face more scrutiny if investment in the country continues. Compared to Mexico, manufacturing in the US would likely offer businesses reduced supply chain disruptions and lower transportation costs."There are many drawbacks of near-shoring to Mexico, including complicated labor laws, crime and violence, ease of doing business, and regulatory and legal obstacles," Abadia said.<h2>Why the US and Mexico are best as complements to one another</h2>In reality, many businesses will make supply chain investments in both the US and Mexico, Luis Torres, a senior business economist at the Federal Reserve Bank of Dallas, told BI. He recalled a recent visit to an automaker's manufacturing plant in San Antonio, where he learned the site was sourcing some parts from Mexico and others from Tennessee and Alabama. Likewise, he said many Mexican factories use parts that are manufactured in the US."Mexican manufacturing is a complement of US manufacturing," he said. "It's not that they're competing."But if the US wants to move the needle toward domestic manufacturing in the years ahead, there are a few steps it could take to boost its labor supply. Colorado State's Golicic said businesses can provide <a target="_blank" href="https://www.businessinsider.com/wage-growth-faster-than-inflation-first-time-2-years-2023-6">competitive pay and benefits</a> to attract workers — and may also need to resort to more <a target="_blank" href="https://www.businessinsider.com/ups-fedex-gig-labor-stay-competitive-ecommerce-delivery-2022-11">contract or subcontract employees</a>.Where a lack of skilled workers is the problem, investments in <a target="_blank" href="https://www.businessinsider.com/semiconductor-industry-jobs-salary-chips-phoenix-arizona-tsmc-students-2023-10">training programs</a> could help fill <a target="_blank" href="https://www.businessinsider.com/economic-recovery-manufacturing-worker-shortage-diversity-training-labor-market-study-2021-5">some of the gaps</a>. And where there simply aren't enough workers available, increasing <a target="_blank" href="https://www.businessinsider.com/immigrants-economy-labor-shortage-democrats-republicans-oppose-2023-2">immigration levels</a> could be part of the solution.While governments can encourage on-shoring, it will be up to business leaders to decide to what degree "Made in America" investments are worth it."Ultimately, corporations have to determine in their cost-benefit equation if this makes sense," Golicic said.

Mexico's one big advantage over the US right now could stall the 'Made in America' push

<ul class="summary-list"><li>A growing number of Americans who qualify for government housing assistance aren't getting it. </li><li>Experimental basic income programs and other temporary aid often go towards rent.</li></ul>Low-income Americans are struggling more than ever to afford housing. Homelessness has <a target="_blank" href="https://www.nytimes.com/2023/12/15/us/politics/homelessness-record-level.html">reached record highs</a>. The US is short an estimated <a target="_blank" href="https://www.fastcompany.com/91000992/housing-market-bank-of-america-4-million-homes-deficit">four million homes</a>. And a growing number of people who are eligible for government housing assistance aren't getting it.But unlike other government benefits like Medicaid and food stamps, housing aid doesn't automatically go to those who need it. Just a fraction of those who qualify actually receive it. Those who've benefited from experimental <a target="_blank" href="https://www.businessinsider.com/universal-basic-income-works-red-state-blue-state-2023-10">basic income programs</a> and temporary government assistance — like the expanded child-tax credit and pandemic emergency housing aid — often spend a large chunk of the cash on housing, including rent and utilities.More than half the recipients of a pandemic cash aid program in Washington, DC, called THRIVE East of the River, spent "all or almost all" or "a lot" of the aid on housing, <a target="_blank" href="https://www.urban.org/research/publication/evaluation-thrive-east-river">according to an Urban Institute report</a>. Meanwhile, a <a target="_blank" href="https://www.cnbc.com/2021/08/21/how-one-universal-basic-income-experiment-is-helping-the-homeless.html">universal basic income program</a> in San Francisco that gave $500 a month to people experiencing homelessness found that more than a third used the money to secure permanent housing. And across <a target="_blank" href="https://guaranteedincome.us/">31 pilot basic income programs</a>, recipients spent an average of about 9.2% of their payments on housing and utilities.Further, the American Rescue Plan's <a target="_blank" href="https://www.businessinsider.com/how-many-people-could-get-a-child-tax-credit-2021-3">expanded child-tax credit</a> — which gave parents up to $3,600 per child under six and $3,000 per child ages six to 17 — has helped families stay housed. Parents on the Supplemental Nutrition Assistance Program (SNAP) who also received the temporary expanded child tax credit were "more likely to think they would be able to stay in their current housing for the next 30 days; less likely to have been evicted; less likely to have slept in a shelter in the past 30 days," according to <a target="_blank" href="https://static1.squarespace.com/static/610831a16c95260dbd68934a/t/61f946b1cb0bb75fd2ca03ad/1643726515657/Child-Tax-Credit-Research-Roundup-CPSP-2021.pdf">a December 2021 study</a> by Columbia University's Center on Poverty and Social Policy.Given the importance of maintaining a secure place to live, it's unsurprising that recipients of basic income and similar cash transfers use a significant portion of it on housing. As Princeton sociologist Matt Desmond put it, <a target="_blank" href="https://www.nytimes.com/2016/03/06/opinion/sunday/the-eviction-economy.html">"the rent eats first</a>.""Rent gets prioritized among other spending, or you risk being homeless," said Chris Herbert, managing director of the Harvard Joint Center for Housing Studies.<h2>A new form of housing assistance</h2>While building more housing will help make housing more affordable, real estate developers insist it's the government that has to improve its efforts to house those who can't afford market-rate homes."The biggest issue for all the cities, pretty much, in the world is affordability, but they shouldn't expect that affordability is solved by the private economy," Christian Ulbrich, CEO of the international real estate investment firm JLL, told Business Insider's Matt Turner at the World Economic Forum in Davos in January. "That's something the public sector has to solve."The amount that the federal government spends on its housing assistance programs, mainly Housing Choice Vouchers and public housing, is determined by Congress each year. And as rents and home prices have skyrocketed, governmental aid hasn't come close to keeping up.Government housing assistance for the poorest renters has dropped to the lowest levels in 25 years even as the number who need the aid has soared, according to an analysis by Harvard housing experts <a target="_blank" href="https://www.nytimes.com/2023/12/19/us/politics/housing-aid-rent-costs.html">published in The New York Times</a> in December. Almost two-thirds of tenants among the bottom 20% of earners spend more than half of their income on housing.The assistance programs already in existence are going underutilized. Only <a target="_blank" href="https://www.cbpp.org/research/housing/families-wait-years-for-housing-vouchers-due-to-inadequate-funding">a quarter of those eligible</a> for a housing voucher receive one. And even when someone manages to score a voucher, <a target="_blank" href="https://www.huduser.gov/portal/portal/sites/default/files/pdf/Voucher-Success_Rates.pdf">about 40%</a> aren't able to find an eligible home with a landlord who will take a voucher."Housing support across America is very fractured and variable," said Sean Kline, director of Stanford's Basic Income Lab.This has led researchers at the Department of Housing and Urban Development to <a target="_blank" href="https://www.huduser.gov/portal/pdredge/pdr-edge-frm-asst-sec-090523.html">propose piloting a direct cash transfer program for rent</a> as an alternative to housing vouchers. Cash payments for housing, researchers say, have a slew of benefits, and cut the red tape and <a target="_blank" href="https://www.cbsnews.com/newyork/news/cbs-new-york-investigates-housing-voucher-discrimination-in-new-york-city/">landlord discrimination</a> associated with vouchers.HUD's proposal involves partnering with a philanthropic group, which would give voucher-eligible people cash every month to spend on rent. The cash transfers would be compared to those who receive vouchers in an attempt to determine which method is more successful in getting people into housing.The Philadelphia Housing Development Corporation is already <a target="_blank" href="https://nextcity.org/urbanist-news/philadelphias-first-guaranteed-income-program">experimenting with such a program</a>. The city's so-called PHLHousing Plus program, which is being implemented in partnership with the University of Pennsylvania, is a guaranteed income program for 300 households who qualify for housing vouchers."The PHLHousing Plus program is really an opportunity to kind of increase, improve the evidence that we have, and really think about how we can offer flexible cash with a bit more dignity and self-determination for those who are receiving the benefit," said Matthew Fowle, a post-doctoral fellow at UPenn's <a target="_blank" href="https://www.housinginitiative.org/">Housing Initiative</a>.But Fowle and other supporters of basic income worry that the stigma around assorted kinds of government benefits will be the most significant obstacle to expanding cash transfer programs."I think that same thing is true, perhaps even more so, with cash — that people think the spending will be on things like cigarettes and alcohol and eating out, which people with a more paternalistic perspective don't like," Fowle said.Kline argued Americans need to start "trusting that families know how to spend money better than any researcher could."Of course, helping low-income people afford the rent is just one part of the solution to the severe shortage of affordable housing. The US also needs to build more homes that the poorest can afford. Fully funding rental assistance programs without simultaneously boosting the housing supply could also be inflationary, pushing already sky-high rents even further up."We should be building housing that's intended for people with lower incomes, to expand the supply, which could help relieve pressure on the market, and not just rely on demand-side subsidies," Herbert said.Matt Turner contributed to this report.

People are using cash transfers like basic income to pay rent, and it shows just how badly a housing-crisis solution is needed

<ul class="summary-list"><li>A 22-story office tower in San Francisco that was worth $300 million in 2019 is for sale.</li><li>It's expected to sell for around $60 million, real-estate brokers told The Wall Street Journal.</li></ul>A 22-story office tower in San Francisco is expected to sell for around $60 million — 80% less than it was valued at in 2019, <a href="https://www.wsj.com/articles/san-francisco-commercial-real-estate-office-buildings-471742ea?mod=hp_lead_pos5" target="_blank" rel="noopener">The Wall Street Journal reported</a>.The office tower, which sits at 350 California Street, was previously worth around $300 million during its last sale, office brokers told The Journal. The street runs through San Francisco's financial district — home to some of its booming tech companies.The building's expected decline in value reflects the current crisis facing the real-estate industry across the US, and <a href="https://www.businessinsider.com/almost-a-quarter-of-san-francisco-office-space-vacant-2022-8">remote work's heavy impact</a> on San Francisco's office buildings, in particular. <a href="https://www.businessinsider.com/almost-a-quarter-of-san-francisco-office-space-vacant-2022-8">Almost 30%</a> of the city's office spaces are available to lease, according to a report from CBRE, a commercial real-estate-services firm. That's <a href="https://www.businessinsider.com/almost-a-quarter-of-san-francisco-office-space-vacant-2022-8">five times higher</a> than it was before the pandemic, and <a href="https://www.businessinsider.com/almost-a-quarter-of-san-francisco-office-space-vacant-2022-8">almost twice as high</a> as the amount of vacancies across the country. Over a quarter of San Francisco's <a href="https://cbre.vo.llnwd.net/grgservices/secure/San%20Francisco%20Office%20Figures%20Q4%202022%20-%20FINAL.pdf?e=1682614342&amp;h=cc90774e5b2d88caa330db81c3d5007a">office space is empty</a> as well, according to CBRE.Last summer, for example, Salesforce had <a href="https://www.sfgate.com/bayarea/article/Salesforce-lists-nearly-half-of-office-tower-17303231.php">half of its Salesforce Tower office space</a> listed for lease as a sublet. The 43-story Salesforce Tower is San Francisco's <a href="https://sf.curbed.com/maps/sf-tallest-building-towers-largest-skyscrapers">tallest building</a>. A spokesperson at the time told SFGate that Salesforce could make use of the owned space in the future and was welcoming employees back into the office.Earlier this month, an office building at 25 Taylor St in San Francisco, a building that was largely occupied by WeWork, saw its value plummet by about two-thirds, according to commercial real estate data firm Trepp. After WeWork moved out, the building was 97% vacant.Tech companies made up 50% of office leasing requests in San Francisco before the pandemic, but that number <a href="https://www.businessinsider.com/almost-a-quarter-of-san-francisco-office-space-vacant-2022-8">dropped to around 33%</a> last spring. In addition to the rise of remote work, the tech industry is facing a <a href="https://www.businessinsider.com/tech-boom-bust-recession-2023-3">financial downturn</a>, forcing some of them to make cuts that <a href="https://www.businessinsider.com/almost-a-quarter-of-san-francisco-office-space-vacant-2022-8">include closing offices or moving to other areas</a>.At the World Economic Forum earlier this year, <a href="https://www.businessinsider.com/obsolete-office-buildings-convert-or-die-ceos-davos-2023-1?IR=C">real estate executives warned</a> that unused office buildings would have to be converted or demolished."You will have a lot of obsolete buildings at the end of the day which are not suitable to be upgraded, or it is financially not viable," Christian Ulbrich, CEO of JLL, said. "So we have to repurpose those buildings in some form or fashion, or they will be empty and will be taken down at some point in time."Whatever price the 22-story tower sells for will be telling for San Francisco's office building market, the latest data point to likely drive home just how far prices have fallen since the pandemic.

A San Francisco office building was worth $300 million before the pandemic. Now, it could sell for only $60 million — a perfect example of why downtowns are in trouble

<ul class="summary-list"><li>Insider's Matt Turner and Cadie Thompson share their biggest takeaways from the World Economic Forum.</li><li>Several of the executives they spoke with said the economic picture had lightened in recent weeks.</li></ul>Davos was back.More than 1,500 business leaders descended on <a href="https://www.businessinsider.com/world-economic-forum-davos-economy-finance-outlook-gloomy-recession-wef-2023-1?utm_source=Sailthru&amp;utm_medium=email&amp;utm_campaign=Insider%20Today%2C%20Jan%2018%2C%202023">Davos in the Swiss Alps</a> last week for the World Economic Forum's annual meeting. We were there to take it all in. Davos always gets a lot of attention and criticism. One banner hanging from a balcony above the main congress center last week read: "Wow this is what corruption looks like."But from a reporting perspective, Davos is an incredible opportunity to meet with executives and government officials from around the world and across industries in a very short space of time.We had 50 meetings, plus breakfasts, lunches, dinners, panels, and parties. It was intense and stimulating. One of the most oft-asked questions there is: What are the themes you're picking up on? With that in mind, we put our notes together to define four themes that came up over and over. These don't capture everything, of course, but they should give you insight into what's on the minds of the business elite. <h2>There's going to be a recession. It's no big deal. </h2>Several of the executives we spoke with, from places like New York, Shanghai, Munich, London, and Zurich, said the economic picture had lightened in recent weeks.In particular, some pointed to China's reopening as a positive development for the global economy. Kweilin Ellingrud, a senior partner at McKinsey in Shanghai, told Insider the full effects of this were likely to kick in during the second quarter, with a surge in spending around travel, luxury goods, and dining. That may benefit Western brands, even as local companies pick up market share.There were also positive signals for the US-China relationship, with Chinese Vice Premier Liu He taking the stage with a speech emphasizing "strengthening international cooperation."Ellingrud said there was an increased understanding that there would be US-China competition in some places and cooperation in others. Caroline Cox, the chief legal, governance, and external-affairs officer at BHP, the world's largest mining company, said she, too, sensed a more-constructive tone from China. In the US, meanwhile, there are signs that inflation is slowing, even as the job market shows continued strength. US jobless claims came in at 190,000 — <a href="https://www.businessinsider.com/recession-outlook-mass-layoffs-not-happening-yet-2023-1">fewer than expected</a> — during the week of the meeting. And as one major bank CEO noted, that's before any real spending from the Inflation Reduction Act or Infrastructure Investment and Jobs Act has kicked in. And Russia's invasion of Ukraine has driven a boom in defense manufacturing, with firms replacing weaponry that's been shipped to Ukraine."There's a lot more optimism now, particularly in the labor market," Becky Frankiewicz, ManpowerGroup's president of North America, said. "So you saw the eurozone unemployment reached a historical low; the US labor market is on a 50-year low for unemployment. And so the labor markets are defying the odds of economic principles." Lastly, a warmer-than-expected winter in Europe has taken some of the pressure off energy supplies there.To be sure, what these executives were largely describing is a more-positive (or less-negative) assortment of likely outcomes for the global economy, rather than a fundamental shift. Most still expect a global recession that's more keenly felt in Europe. "My personal view is: I think that if we have a recession in the US, there's a really good chance that could be very short and shallow," Paul Knopp, the CEO of KPMG, said. "If there is one, the global picture is more complicated."Still, it's a subtle shift in tone after months of doom and gloom. Jörg Ambrosius, the chief commercial officer at the investment giant State Street, called it "some light at the end of the tunnel."<h2>AI will change everything</h2>You couldn't get far into any discussion at Davos without the topic of artificial intelligence and ChatGPT, in particular, coming up."I have never seen this much excitement about anything in my life," Omar bin Sultan al-Olama, the United Arab Emirates' minister of state for AI, digital economy, and remote-work applications, told Insider. Mihir Shukla, the CEO and a cofounder of Automation Anywhere, likened ChatGPT to how self-driving cars captured people's imagination. And Coursera's CEO, Jeff Maggioncalda, described <a href="https://www.businessinsider.com/chatgpt-game-changer-coursera-ceo-plans-integration-coursework-2023-1">ChatGPT as a mind-blowing</a> "game changer."While Microsoft basked in the glow of ChatGPT's hype, some of its rivals were left gritting their teeth and warning of the risks. Alphabet, which has long been a leader in AI, has found itself on the back foot, for example. The T in ChatGPT stands for transformer, an architecture introduced in a 2017 research paper from Google. The week of Davos, Alphabet <a href="https://www.businessinsider.com/google-fears-ai-running-wild-but-it-is-too-late-2023-1">published an explainer on its approach</a> to AI signed by execs including CEO Sundar Pichai. "We understand that AI, as a still-emerging technology, poses various and evolving complexities and risks," the post said. The timing of the paper sure didn't seem coincidental.It wasn't just tech giants warning of the risks, with executives discussing everything from mass-produced misinformation to significant impacts on the labor market. One exec said they'd heard a CEO at Davos say ChatGPT would replace a huge swath of his customer-service workforce within a few years, for example. Shelley Stewart III, a senior partner at McKinsey, said there would be a much-greater need for occupational switching and retraining as some jobs changed or were eliminated by the advent of AI."With every technology, there is good and then there's bad," Rima Qureshi, Verizon's chief strategy officer, told Insider. "I'm a firm believer that in the long run, the good wins out over the bad, but we have to be aware that there are pitfalls with every technology."<h2>For sustainability, a question of how</h2>The climate crisis, sustainability, and the energy transition were <a href="https://www.businessinsider.com/ways-pay-climate-crisis-davos-2023-1">front of mind</a> for many in Davos.But according to Abby Klanecky, the chief marketing and client-services officer at the management consultant Kearney, many companies are still looking for a place to start. "We get the what and the why," she said, describing conversations with clients around sustainability. "But give us a practical guide for how to do this."Put another way, "the anxiety is there, but knowing how to act is not," John Granger, the CEO of IBM Consulting, said.The pressure is on. Many companies have set net-zero goals without necessarily having a concrete plan for how to achieve them, executives who spoke with Insider said. John Waldron, the chief commercial officer at Honeywell, said there would likely be increased governance around those net-zero goals, which would force companies to either comply or roll back their targets. And significant changes in operations are required for many, emphasizing the need to start acting sooner rather than later."Companies can't carbon-offset their way to net zero," Waldron said. Several of those who spoke with Insider highlighted the need for much-greater collaboration among companies — and a willingness to experiment. Granger called for "radical collaboration" across industry verticals, a point echoed by Klanecky."None of the problems we're talking about can be solved by one company," she said. And Ambrosius from State Street said there's a need to act now, with the knowledge that some experiments may fail. "We're going to give it a hard try, and if eight out of 10 things fail, that is a better outcome than not doing anything," he said. "Waiting is no option anymore."BHP's Cox said that many of the technologies required for the energy transition hadn't arrived yet. She pointed to BHP's work testing different fuels in shipping, from biofuels to liquified natural gas, as evidence of the need for experimentation. One dark cloud for many: the complexity of getting projects approved. Several mentioned US Democratic Sen. Joe Manchin's <a href="https://www.energy.senate.gov/2022/9/manchin-releases-comprehensive-permitting-reform-text-to-be-included-in-continuing-resolution" target="_blank" rel="noopener">permitting-reform efforts</a>, which have hit a wall in the Senate, as evidence of what's required.<h2>Your boss wants you back at work. Why?</h2>Wanting to bring everyone back to the office is akin to "raging against the dying of the light of the old model."That's according to Nick Studer, the chief executive of the management consultant Oliver Wyman. He said he found the discussion around the return to the office an "incredibly sterile debate."First, there needs to be a redesign of the work that is done in the office, and then there needs to be a redesign of the office itself, he said."We want to be together when there is a task that requires us to be together," he added. "Not every task does."Real-estate leaders, meanwhile, noted that many office buildings <a href="https://www.businessinsider.com/obsolete-office-buildings-convert-or-die-ceos-davos-2023-1">would become obsolete</a>. Some could be transformed into residential dwellings, but others may need to be torn down."You will have a lot of obsolete buildings at the end of the day which are not suitable to be upgraded, or it is financially not viable," Christian Ulbrich, the CEO of JLL, said. "So we have to repurpose those buildings in some form or fashion, or they will be empty and will be taken down at some point in time."

We spoke with more than 50 CEOs, billionaires, execs, and government officials in Davos. Here are our 4 biggest takeaways.

<div class="KonaFilter image-container display-table"><div><div class="image on-image"><a href="https://www.glassdoor.com/Photos/JLL-Office-Photos-E5779_P2.htm">Glassdoor</a></div></div></div><ul><li>Real-estate brokerage <a href="https://markets.businessinsider.com/stocks/hf-stock">HFF</a><a href="https://markets.businessinsider.com/stocks/hf-stock"> </a>announced it is selling itself to <a href="https://markets.businessinsider.com/stocks/jll-stock">Jones Lang LaSalle</a>.</li><li>JLL will acquire all the outstanding shares of HFF with a combination of cash and stock at an equity value of approximately $2 billion.</li><li>HFF shareholders will receive $24.63 in cash and 0.1505 JLL shares for each HFF share. </li><li><a href="https://markets.businessinsider.com/stocks/hf-stock">Watch HFF trade live.</a></li></ul>The real-estate brokerage <a href="https://markets.businessinsider.com/stocks/hf-stock">HFF</a> announced it is selling itself to <a href="https://markets.businessinsider.com/stocks/jll-stock">Jones Lang LaSalle</a>, a provider of real estate and investment management services.Under the terms of the deal, JLL will acquire all the outstanding shares of HFF in a combination of cash and stock, with an equity value of approximately $2 billion, according to a <a href="https://www.prnewswire.com/news-releases/jll-to-accelerate-growth-in-capital-markets-business-through-acquisition-of-hff-300814708.html">press release.</a> HFF shareholders will receive $24.63 in cash and 0.1505 JLL shares for each HFF share. "The combination with HFF provides a unique opportunity to accelerate growth and establish JLL as a leading capital markets intermediary, with outstanding capabilities," Christian Ulbrich, Global CEO of JLL, said in the press release. "We have long admired HFF for its expertise and leading reputation in the industry, as well as its client-first culture of teamwork, ethics and excellence, which aligns with our own. I believe that combining our organizations will deliver a range of compelling benefits for our clients, employees and shareholders."HFF was up 50% this year including Tuesday's gain of more than 5%.<div class="KonaFilter image-container display-table"><div><div class="image on-image">MI</div></div></div> <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/2019-market-outlook-john-rogers-ariel-investments-on-fund-performance-whats-ahead-2019-3">The founder and CIO of $12 billion Ariel Investments breaks down how his top-ranked flagship fund has crushed its peers over the past 10 years</a></h3> <div> </div> </div>

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