New York Times (March 14)
Some now fear an “urban doom loop.” Cities are encountering budget crunches brought on by “steep discounts” in office and commercial real estate “as the pandemic trends of hybrid and remote work have persisted.” Cities are “starting to bear the brunt.” Budgets once reliant “on taxes associated with valuable commercial property are now facing shortfalls and contemplating cutbacks as lower assessments of property values reduce tax bills.” Cutting services or raising taxes could make cities less attractive, inducing urban flight and further exacerbating city budgets.
Tags: Budgets, Cities, Commercial, Cutbacks, Discounts, Fear, Hybrid, Office, Pandemic, Property, Real estate, Remote, Services, Shortfalls, Tax, Urban doom loop
Reuters (August 23)
“Office owners’ valuations are in the basement. U.S.-listed landlords like $20 billion Alexandria Real Estate Equities (ARE.N), $10 billion Boston Properties as well as France’s 7 billion euro Gecina recently traded at half the forward earnings multiples they enjoyed before the virus emptied offices.” If, however, corporate leaders “are successful in driving the white-collar herds back to the office,” then those “office stocks may come back from the dead.”
Tags: Alexandria, Boston Properties, Come back, Dead, Forward earnings multiples, France, Gecina, Landlords, Office, U.S., Valuations, White collar
Bloomberg (June 12)
“The owners of the Westfield San Francisco Centre mall are giving up the property to lenders, adding to deepening real estate pain in a city struggling to bring back workers and tourists after the pandemic.” Unibail-Rodamco-Westfield and Brookfield Corp. will default on $558 million in remaining debt. “San Francisco has been among the hardest-hit cities since the pandemic as office vacancies soar, retail vacancies rise and concerns about safety deter visitors.”
Tags: Brookfield, Cities, Debt, Default, Hardest-hit, Lenders, Mall, Office, Pain, Pandemic, Real estate, Retail, Safety, San Francisco, Struggling, Tourists, Unibail-Rodamco-Westfield, Vacancies, Workers
Bloomberg (April 8)
“Almost $1.5 trillion of US commercial real estate debt comes due for repayment before the end of 2025. The big question facing those borrowers is who’s going to lend to them?” Morgan Stanley has estimated “office and retail property valuations could fall as much as 40% from peak to trough, increasing the risk of defaults.” Regional banks are now skittish about lending and “the wall of debt is set to get worse before it gets better.”
Tags: $1.5 trillion, 2025, Borrowers, Commercial real estate, Debt, Defaults, Morgan Stanley, Office, Peak, Regional banks, Repayment, Risk, Skittish, Trough, U.S., Valuations
Institutional Investor (October 3)
“Two and half years after the beginning of the pandemic — and the mass migration into remote work — some of the biggest asset managers have decided that it’s finally time to get back to the office.” While a range of plans are being prepared, CEOs seem to be favoring the “3-2 model” with three office days and two remote days. “Besides concerns over corporate culture and employee burnout, decision-makers in the asset management industry also cited better innovations, teamwork, and apprenticeship as reasons for returning to the office.”
Tags: 3-2 model, Apprenticeship, Asset managers, CEOs, Corporate culture, Decision-makers, Employee burnout, Innovations, Office, Pandemic, Remote work, Teamwork
New York Times (August 28)
“Each pandemic fall has brought with it employers’ hopes of a broad-scale return to the office.” Delta scrapped last year’s plans, “but this time, business leaders are adamant that they won’t change course.” Over a third of the workforce is adamant about staying remote, “It’s either the end of the era of flexibility around where work takes place — or the beginning of outright rebellion.”
Tags: Adamant, Business leaders, Delta, Employers, Fall, Flexibility, Office, Outright, Pandemic, Plans, Remote, Return, Workforce
Wall Street Journal (July 8)
“Big cities can’t get workers back to the office.” More than two years since Covid-19 first struck, “less than half the number of prepandemic office workers are returning to business districts consistently.” Despite numerous carrots and the occasional stick, “occupancy is especially low in cities like New York, where workers are the engine of local economies.”
Tags: Big cities, Business districts, Carrots, COVID-19, New York, Occupancy, Office, Prepandemic, Stick, Workers
Boston Globe (June 19)
“Many firms are implementing hybrid plans that call for two or three days a week in-office, though few enforce them. And fully remote situations remain common.” Things will never return to fully in-office, but offices are likely to grow more enticing. Companies that signed big leases, “with years of big rent checks ahead of them,” are left trying to rethink “the role — and look — of the office in a post-COVID world.” They are “trying to design an office worth coming back to.”
Tags: Companies, Design, Enforce, Enticing, Hybrid, In-office, Leases, Office, Post-Covid, Remote, Rent
San Francisco Chronicle (January 10)
“As the omicron variant once again scrambles well-laid plans, possibly killing the return-to-office date altogether,” millions of workers hope they will “never have to work in an office full time again.” The initial response to COVID may have appeared confined to “a niche, tech-world revolution,” but this has “spread to nearly every sort of job where remote work is possible,” close to 50% of the U.S. workforce.
Tags: Covid, Full-time, Office, Omicron, Plans, Remote, Return, Revolution, Scrambles, Tech-world, U.S., Variant, Workers
Chicago Tribune (September 24)
“Many employers pushed Labor Day return to office plans back as the delta variant fueled a resurgence in COVID-19 cases—another setback for businesses catering to the Loop’s formerly bustling office crowd. While businesses like coffee and shoe repair shops are optimistic their customers will eventually return, they may be downtown less often and may need time to rebuild old habits.”
Tags: COVID-19, Customers, Delta variant, Downtown, Employers, Labor Day, Loop, Office, Old habits, Resurgence, Return, Setback, Shops