Who still needs the office? US companies start cutting space

Corporate America is downsizing its real estate footprint as companies allow more employees to work from home, a growing threat to the bottom line of owners of traditional office buildings and a sign that companies are looking for ways to cut costs as a result of the coronavirus pandemic.

"You should expect and hold us to a much lower footprint really starting quite soon," State Street Corp's CEO, Ronald Philip O'Hanley, said on the company's July 17 earnings call. "Clearly, we're seeing businesses starting to rationalize their physical plants and at some point they will turn to labor too," he said.

While companies tend to cut back on their real estate needs during typical recessions, the last four months of economic lockdown have shown that many workers can remain productive at home, said Danny Ismail, an analyst at independent research firm Green Street Advisors. As a result, the cutbacks that companies are making are more likely to be permanent, he said.

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