The acceleration of the work-from-home trend as a result of the coronavirus pandemic could push companies to downsize their offices and pressure leasing prices.
Fred Katayama reports.
Tall towers could soon face taller financial problems. From the majestic skyscrapers of New York City to the real estate trophies in Los Angeles, the coronavirus threatens to do to office rentals what online shopping did to malls.
The pandemic could accelerate the growing trend of Americans working from home, especially now that apps such as Zoom and Microsoft Teams make it possible to collaborate remotely.
And that could push companies to downsize their offices, pressuring leasing prices in Manhattan.
Coworking could cut space per worker in half.
Mizuho Americas REIT analyst Omotayo Okusanya: SOUNDBITE: OMOTAYO OKUSANYA, REIT ANALYST, MIZUHO AMERICAS (ENGLISH) SAYING: "A lot of the banks, the investment banks during their earnings calls, actually did address this issue, talking about how they can potentially see themselves needing less office space going forward because a lot of their employees are successfully working from home." The work-from-home trend compounds issues facing office building owners in New York, where many buildings are aging.
Share prices of two of the city's largest landlords, SL Green Realty and Vornado Realty Trust have lost about a fifth of their value in the last five years at a time when the S&P 500 rose 57%.
And it comes just as Manhattan has embarked on the biggest boom in new office towers since the 1980s.
Among the sectors, professional and financial services firms may shrink space more than others.
So much of their work is already done outside the office.
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The novel coronavirus COVID-19 pandemic has dramatically transformed the commercial real estate landscape.
According to..
