By Tiffany Moustakas, Editor at LinkedIn News
As companies continue leasing office space to bolster their employees’ return to offices, some are prioritizing what makes for the most convenient commutes, Curbed writes. Commercial leases have increased in New York City’s Grand Central area, for example, where 225,000 square feet each month has been rented — the most in Manhattan — since the beginning of 2022, according to real estate firm CBRE. The 2010s question of “Will I play ping-pong or foosball on my break?” has been largely replaced with the post-pandemic “How quickly can I get home?” with Curbed noting easy commutes are now “universally appealing.”
- Average rent near Grand Central is at $67 per square foot, which is lower than the average rate in the midtown area at $83 per square foot, per CBRE.
BY
The $500 billion ‘Office real estate apocalypse’: Researchers find remote work’s effect even worse than expected
fortune.com
BY
Amazon and Seattle Show What Can Happen When a Big Employer Calls Workers Back to the Office
costar.com
As we continue to adapt to the #FutureOfWork, we are witnessing a profound shift – the devaluation of commercial real estate due to the rise of #RemoteWork. A recent article by Fortune underscores a predicted 44% decline in NYC office values by 2029, with nationwide value destruction of $506 billion from 2019 to 2022.
This isn’t just about vacant office spaces. It’s about the ripple effects on urban planning, city budgets, corporate cultures, small businesses, and public policies.
Key Takeaways:
> Remote work is leading to a significant decrease in lease revenue, occupancy, lease renewal rates, and market rents in the office sector within commercial real estate.
> Researchers predict a 44% drop in New York City office values by 2029, translating to a $506 billion loss in value nationwide from 2019 to 2022.
> There is a direct correlation between companies’ remote work policies and their leased office space reductions.
> The impact of remote work on office property values is not uniform across the country or across properties. Higher quality buildings and cities with less exposure to work from home are seeing smaller declines.
> The most significant declines in property values were observed in New York City, San Francisco, Los Angeles, San Jose, and Boston, which could potentially affect local governments that heavily rely on property taxes.
As #ThoughtLeaders, #CEOs, #VentureCapitalists, #PrivateEquityDirectors, and #SeniorHRLeaders, it’s time to engage in meaningful discussions about these changes. How will this reshape your work, your cities, and your companies?
https://lnkd.in/ef6ASaTb
#OfficeSpace#CommercialRealEstate#UrbanPlanning#CityBudgets#CorporateCulture#SmallBusinessStrategy#PublicPolicy#StateBudgets#LocalBudgets#RealEstate#Economy#Workforce#WorkplaceTrends#FutureTrends#Leadership#BusinessStrategy#RemoteWorking#WorkFromHome#BusinessImpact#EconomicImpact