Good morning,
The future of the real estate market certainly has implications for homeowners—but also for CFOs. Finance chiefs are deciding where to keep, reup, or part with office space as workplace patterns change. And employees are weighing how much house they can afford—and what cities they not only want to live in, but can afford to live in. All of which means real estate is inextricably tied to hiring, retention, and the costs of operating your business. It’s a big deal.
Fortune’s Quarterly Investment guide, out this morning, delves into myriad aspects of the 2022 real estate market. Of particular note to the finance crowd is Lance Lambert’s piece: 10 housing markets poised to see home prices rise the most by 2030.
“Rapid home price growth during the pandemic has already created an affordability crunch for homebuyers,” Lance writes. “No matter how home prices perform this decade, we do know results won’t be uniform nationwide. The varying degree of supply constraints and population growth across the country means home price appreciation should also vary—by a lot.”
Over the past six months, Fortune teamed up with the data scientists at Home.LLC to build a forecast model to “estimate home price appreciation potential (i.e., our Return Score)” and “assess markets’ risk factors (i.e., our Risk Score),” Lance writes. The 100 largest metropolitan statistical areas in the U.S. were reviewed.
Not only did Fortune find markets with high upside for price growth, but market risk was also factored in. It was discovered that some of the fastest-growing markets had the highest market risk. “Housing markets with high levels of homebuilding have the highest risk of getting oversupplied in the scenario that housing slumps,” Lance writes.
Fortune created a “ranking of the regional housing markets with the best risk-adjusted profiles for elevated home price growth,” Lance writes. You read can about the top 10 cities here in the full report. (Here’s a hint: In one of the major cities, there’s no shortage of cheese curds.)
The world’s largest commercial real estate and investment firm, CBRE Group, released a survey in late 2021 that found 87% of large companies, with 10,000 or more employees, say they will be adopting hybrid work, where employees work in the office and remotely.
But if the company’s office is located in a city where housing prices become astronomically high, and inflation continues, employees may opt more for remote work than hybrid to move to locations they can afford.
Note: The CFO Daily will return to your inbox on Monday. See you then!
Sheryl Estrada
sheryl.estrada@fortune.com
Big deal
A new report, The Redefined CFO, released by Sage (FTSE: SGE), a software company providing technology for small and medium-sized businesses, examines how finance leaders are taking a more holistic approach with a reliance on data to engage with their companies' wider strategic priorities. About 98% of U.S. CFOs surveyed agree that, similar to CEOs, they’re "embedded into nearly every facet of the operation of their business," according to the report. For example, 79% are involved in the digital transformation process, 76% said data and cybersecurity are under their purview, and 75% noted they have greater responsibilities in the area of sustainability. The findings are based on a global survey of 1,900 finance leaders (500 respondents from the U.S.) at businesses with less than 1,000 employees and annual revenue of at least $50 million.
Going deeper
In case you missed it, here’s what was featured in CFO Daily this week:
Meet the new CFOs at Pfizer and Moderna
49% of female executives considered quitting their jobs last year—for these 5 reasons
Exclusive: 1stDibs CFO joins $4B NFT fantasy sports startup Sorare
Leaderboard
Some notable moves this week:
John Rainey was named EVP and CFO at Walmart Inc., (NYSE: WMT), effective on June 6. Rainey joins Walmart from PayPal Holdings, Inc. (Nasdaq: PYPL) where he currently serves as the company’s CFO and EVP of global customer operations. He will succeed CFO Brett Biggs who will serve as an advisor until he leaves the company on Jan. 31, 2023. Prior to PayPal, Rainey was EVP and CFO at United Airlines, and spent a combined 18 years between United and Continental Airlines. He began his professional career at Ernst & Young LLP. Rainey is also on Nasdaq’s board of directors, where he is a member of the audit committee and chair of the finance committee.
Gabrielle Rabinovitch was named interim CFO at PayPal (Nasdaq: PYPL), effective upon John Rainey’s departure. Rabinovitch is currently SVP of corporate finance and investor relations. PayPal’s board of directors has launched a formal search process to identify Rainey’s permanent replacement. The global customer operations team will join the risk, legal and customer operations organization led by EVP Aaron Karczmer, according to the company.
James Gruber was named CFO at Eton Pharmaceuticals, Inc. (Nasdaq: ETON), effective immediately. He succeeds Wilson Troutman, who is retiring. Troutman will remain with the company through the end of May. Gruber brings more than 20 years of financial and accounting experience to Eton. Most recently, he was the U.S. controller at Horizon Therapeutics for seven years. Prior to Horizon, Gruber spent 14 years at Abbott Laboratories where he held various financial and accounting leadership positions.
Andy Ivanovich was promoted to CFO at The Knot Worldwide, a global digital wedding planning company. Ivanovich has been with the company since 2013, most recently serving as EVP of strategy and finance. He has played a lead role in The Knot Worldwide’s financing events, acquisitions and geographic expansions. Prior to joining The Knot Worldwide, Ivanovich held roles at Spectrum Equity, Oliver Wyman FS and Susquehanna Growth Equity.
Rukmini Sivaraman was promoted to CFO at Nutanix (Nasdaq: NTNX), a hybrid multi-cloud computing company, effective May 1. Sivaraman will succeed Duston Williams, who is leaving to become CFO of a pre-IPO company. Williams will remain with Nutanix through April 30. Sivaraman joined Nutanix in 2017 and currently serves as SVP of financial planning and analysis. She has held several roles at the company including chief people officer, and before that SVP of people and business operations. Sivaraman previously spent eight years as an investment banker at Goldman Sachs.
Brandon Sink was named EVP and CFO at Lowe’s Companies, Inc. (NYSE: LOW), effective April 30. Sink, currently SVP of retail finance of Lowe’s, will succeed Dave Denton who was appointed CFO at Pfizer. Sink has more than 20 years of finance and accounting experience. He joined Lowe’s in 2010 and has held a variety of roles across the organization. Before joining Lowe’s, Sink held accounting and finance positions with Deloitte and Nucor Corporation.
Overheard
"When you have a strong focus on your purpose, you coordinate all the resources of the company towards one common goal."
—Pfizer CEO Albert Bourla discussed leading the company through the COVID era on this week's episode of Fortune's Leadership Next podcast.
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