Tuesday, May 5, 2026
On Tap Today
Vertical divide: Vornado’s latest bet depends on New York staying friendly to wealth.
Moisture management: Amazon standardizes a new HVAC system that cuts cooling costs in humid climates.
Tower of power: AT&T's billion-dollar Plano, Texas campus cleared a major planning hurdle this week.
| Monday's Iran jitters were a one-day event. The S&P and Nasdaq both hit new record closes Tuesday after Defense Secretary Hegseth confirmed the ceasefire "certainly holds" and oil dropped nearly 4% to $102. The JOLTS report showed hiring surging to 5.55 million in March, the strongest monthly gain in over a year, while job openings held steady at 6.87 million. Truist's chief market strategist summed up the rally's fuel in three words: "profits, profits, and profits." With 84% of S&P companies beating EPS estimates by a 20.7% average, Q1 is shaping up as the strongest earnings season since early 2021. The 30-year briefly topped 5% before settling back. For CRE, the labor market strength is a double-edged sword: robust hiring supports occupancy and rent growth, but it also gives the Fed zero reason to cut. The 10-year at 4.43% and the 30-year flirting with 5% means long-term borrowing costs are still moving in the wrong direction. April jobs report lands Friday, with only 60K expected. |
Office
For years, office real estate has been framed as a slow-moving collapse defined by empty towers, hybrid work, and distressed debt. But during Vornado Realty Trust’s latest earnings call, Steve Roth laid out a very different vision for the future. The company believes the best office buildings are no longer struggling assets. They are becoming scarce luxury products with growing pricing power.
A rendering of 350 Park Avenue, the planned 1.9 million-square-foot office tower backed by Citadel, Vornado Realty Trust, and the Rudin family, which has become a flashpoint in New York’s growing debate over wealth, development, and the future of the office market. (Image: DBOX)
The call moved far beyond earnings. Roth sharply criticized New York City politics after a viral video targeting Citadel founder Ken Griffin, whose firm is partnering on the massive 350 Park Avenue tower. The exchange exposed growing tension between developers, wealthy investors, and political leaders at a moment when cities still depend heavily on private capital to finance growth, infrastructure, and ambitious projects.
Perhaps most surprisingly, Vornado argued that AI could strengthen office demand rather than weaken it. Executives compared the technology shift to the rise of the internet and personal computers, saying productivity gains will likely pull more workers and companies into global urban hubs like New York and San Francisco. In Vornado’s view, the future of office is no longer about filling outdated buildings. It is about controlling the limited number of towers capable of attracting the world’s most valuable tenants.
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Overheard
Dehumidification Tech Could Cut Data Center and Warehouse Cooling Costs
Amazon will deploy ventilation units from Transaera across its building portfolio over the next three years after testing the technology in Houston for several months. Transaera's dedicated outdoor air system removes 100 pounds of water per hour from incoming air using a desiccant-coated wheel, reducing the load on conventional air conditioning systems. The startup now has nine figures in purchasing commitments from multiple customers and is manufacturing the units domestically through existing HVAC producers. Amazon plans to incorporate the system into its design standards and replicate it across its real estate stock.
Commercial buildings in humid climates often overcool interior air to control moisture, then reheat it to maintain comfortable temperatures—a wasteful cycle that drives up energy costs. Transaera's system addresses this by separating dehumidification from cooling, using a desiccant material based on a Nobel Prize-winning discovery from 2025. The units slot directly into standard HVAC infrastructure as like-for-like replacements, lowering the barrier to adoption. Amazon cited the technology as part of its plan to reach net-zero carbon emissions by 2040.
Energy consumption from HVAC systems represents one of the largest operating expenses for warehouse, logistics, and retail operators, particularly in the Southeast and Gulf Coast markets. Dehumidification improvements offer immediate returns on investment through reduced runtime and lower peak demand charges. Amazon's decision to standardize the technology across its portfolio suggests the payback period is short enough to justify capital outlays even as interest rates remain elevated. Other large-format building owners are likely evaluating similar systems as energy costs and sustainability mandates tighten margins.
Plano Clears Path for AT&T's Suburban Mega-Campus With Key Approvals
Plano, Texas's Planning and Zoning Commission approved preliminary site plans on May 4 for AT&T's $1 billion-plus headquarters campus at 5400 Legacy Drive. The 2 million-square-foot development will include a 230-foot tower displaying the company's logo and housing a communications antenna, a day care center, a pedestrian bridge to the Shops at Legacy, and substantial open space. The commission also approved rezoning for 1.4 acres at Legacy Drive and Parkwood Boulevard to accommodate the antenna within a 0.76-acre plaza. Final approval from Plano City Council is still required, and any structure over 200 feet must receive Federal Aviation Administration clearance.
The project represents a major corporate headquarters migration from urban Dallas to a northern suburb, with AT&T planning to relocate roughly 10,000 workers from its downtown Whitacre Tower location. Plano approved a $20 million incentive package in February—the city's largest ever—contingent on AT&T investing at least $1.35 billion and creating 10,000 jobs. CEO John Stankey told employees that move-ins could begin in the second half of 2028. The developer is KDC, with design by Gensler and landscape work by SWA Group.
The shift adds to a pattern of major employers choosing suburban campuses with extensive amenities over downtown towers. Plano city staff flagged concerns that existing water and wastewater infrastructure may not support 10,000 workers; site owner NexPoint will need to negotiate upgrades with the city. AT&T has occupied Whitacre Tower since relocating its headquarters from San Antonio to Dallas in 2008. The company remains the largest public firm based in Dallas, with approximately 133,000 employees and a market capitalization near $180 billion as of May 5.
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