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Who still needs the office? U.S. companies start cutting space

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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.

Men walk into the Chrysler building in the Manhattan borough of New York City, New York, U.S., July 22, 2020. REUTERS/Carlo Allegri

“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. Reductions in office spending could likely be followed by layoffs and investments in technology that should help improve productivity with a reduced workforce, said Bill McMahon, chief investment officer of active equity strategies at Charles Schwab.

So far, concerns about declining office space use have not hurt commercial mortgaged-backed securities, with the iShares CMBS ETF up 4.4% for the year to date.

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I saw a clip this morning with RE developers. I think it was Boston, in that one area of clip, 92 million sq ft of office space is closed due to covid. 92 million sf !

WFH only works when everyone WFH. It will hurt the Corp culture and decrease the productivity. Any decision made to allow WFH for a long period of time is overreacting.

The NYSE too!

This bodes well for all those (altered, adjust, and fraudulently propped up) CMBS’s. Danger will Robinson

Is that the Chrysler Building?

The dominoes are about to fall as office space will become vacant leading to defaults on real estate loans, investors filing for bankruptcy. Will be worse than combining 2001 and 2008 recessions.

Hospitals should be doing the same:telemedicine!

Good news! Real estate costs and rents going down!

Bound to happen!!! WFH and investment in cyber security related infrastructure is the way forward...! WFH will become the new norm going forward!

wow xxx

Could this solve housing issue? Bring prices down in cities? How about schools on floors for workers who still report in?

thanks rothschild trust, tell us Americans what we need

An office is still an excellent idea venture and platform.!!!

They’ve also realized that productivity doesn’t drop a lot and now the cost of the office goes away. Win for the company. I feel bad for people who’s social life revolves around work. They’re going to be very lonely.

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