Telecommuting causes a lot of controversy, and there’s one we haven’t covered here yet: the way it crushes the real estate market.
In 2020, remote work seemed ideal for employees and companies, who took advantage of it and used it as a flag and beacon, to attract more and better workforce. Over time, the issue has taken other forms – at least for companies, which no longer see remote work as an advantage.
On the one hand, employees want the method to remain in place, allowing them to work from home, with all the benefits that come with that. On the other hand, companies, which do not believe in productive workers, stay home.
Interestingly, for every study that confirms managers' point of view, there is another that confirms employees' will. In fact, productivity is a difficult metric to measure, and studies tend to favor one side of the coin, depending on which opinions and beliefs.
There is a market that is giving up because of telecommuting: real estate
Currently, between 12% and 25% of offices in the United States of America are empty. that it reality He was unknown even in the worst moments of the 2008 crisis.
I think if, by magic, more and more people returned to their desks, we would see an increase in productivity.
productivity issue to lift, a few months ago, by Larry Fink, CEO of BlackRock, an investment firm and leading investor in office real estate. Along with others in the same field, this company has invested more than $1.2 billion in offices - which are currently empty spaces.
Larry Fink, CEO of BlackRock
During the pandemic, negative interest rates spurred investment funds to invest in the purchase of office buildings. The goal was to make the investment profitable when businesses return to normal.
However, according to some media outlets, the adoption of remote work has misled companies, which see their investments as at risk. If they can't make the office purchase payments, the banks will have to foreclose on the mortgage and they'll have what's left Thousands of empty offices.
According to a report issued by McKinsey Global Institutewhich analyzes the impact of co-working and telecommuting on real estate, it is estimated that in nine major business hubs (Beijing, Houston, London, New York, Paris, Munich, San Francisco, Shanghai and Tokyo), “telecommuting is poised to wipe out up to $800 billion in office value.” by 2030 (-26% of its current value).
It should be noted that this is a moderate forecast. According to forecasts, San Francisco and Silicon Valley will be the most affected.
If workers do not return to their offices, this could have a major impact on the big companies in the cities.
According to a report by analysts Morgan StanleyThe commercial real estate market is expected to witness a sharp downturn in the coming years.
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