WeWork’s bankruptcy is the latest blow to the battered office sector. But the outlook for the economy and interest rates are far more important in driving the stocks., analysts said.
Those headwinds include hybrid office arrangements, the work-from-home trend, lingering debate about whether the U.S. will have a recession in 2024, and what the Federal Reserve will do with interest rates in the coming months. Office buildings across 10 major cities are only 49.6% filled with workers, according to Kastle Systems, a security company. In New York, the figure is 48.9%, and in San Francisco, 41.9%.
“Ultimately, for office space, the underlying demand is office-using jobs—so you need the economy to start producing more office jobs,” said Malhotra. “The other factor is remote work and the return-to-work theme. I think frankly that’s a bigger deal than WeWork in itself.”
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