What’s Going to Happen with All that Empty Office Space?

A big majority of employees in New York said they’d prefer working from home and not return to the office. Companies might not always oblige, but lots of empty office space is now a given. Wolf Richter on HoweStreet.com, with Jim Goddard. Recorded on March 17.

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  135 comments for “What’s Going to Happen with All that Empty Office Space?

  1. Depth Charge says:

    “What’s Going to Happen with All that Empty Office Space?”

    It will just be parked on some oligarch’s balance sheet as real estate holdings.

  2. David Hall says:

    Disney, Goldman Sachs, Wall Street banks, Viacom-CBS, Bloomberg, Apple and other companies plan to return their employees to their offices as early as this summer.

    • cas127 says:

      66% of surveyed NYC companies said they will move to a hybrid model where a given worker will only be in the office for a fraction of a week.

      Over time, that will lead to a huge reduction in leased space. Companies won’t pay for what they don’t use (unless the CEO gets a kickback…).

      • Petunia says:

        NYC is too far gone to ever bounce back. It’s another Detroit in the making. The middle class neighborhoods out in the boroughs are all ghettos now.

        If the middle class has gone upstate, or to NJ or PA. The jobs will follow them as well. Most likely the jobs will go to NC, TX or FL.

        • roddy6667 says:

          The upper echelons of the country will not move there. They don’t want to live where a cultural event consists of a BBQ and a tractor pull and where everybody talks like Deputy Dawg.

        • Lou Mannheim says:

          “ NC, TX or FL”

          I tell ya, New England, especially the old mill towns and such, would be an interesting choice to create hubs. Beautiful country, relatively cheap, and it ain’t getting colder.

        • kam says:

          Roddy
          You so funny.
          American Royalty only visits New York, and with the livable neighborhoods as rare as clean tap water in China, our out-of-touch Elites will build more private army castles – like the castles that protect Communist China Plutocrats from having to be near their slave camps.

        • Anthony A. says:

          Roddy, not a problem if they don’t come down here. We are doing OK all by ourselves.

        • Robert says:

          “The middle class neighborhoods out in the boroughs are all ghettos now. ”

          This is an exaggeration. Have you visited lately?

          And I don’t even like the Northeast anymore!

        • Roddy says:

          So is San Francisco. There’s no way that people who have moved to the suburbs as owners or renters will every move back to the city.

          Josh, who has moved back to Mom’s basement and is enjoying her home cooking while working from home will be a really hard sell to lure back, especially with daily news of more street attacks, that memory of the smell of urine and dookey in stairwells, parks and sidewalks, plus the return to his hometown, now repopulated by his school chums.

        • Depth Charge says:

          “I tell ya, New England, especially the old mill towns and such, would be an interesting choice to create hubs. Beautiful country, relatively cheap, and it ain’t getting colder.”

          The taxes say otherwise. The people who run those places are jobs and industry destroyers.

        • Petunia says:

          Robert,

          I haven’t visited in a few years, but I watch current videos on NYC neighborhoods often. I am also not referring to gentrified areas which are really upscale high cost areas. I am referring to the neighborhoods where middle class people lived and even owned homes. Most of the Bronx, Queens, and even remote Staten Island is scary looking these days. I don’t even want to visit anymore.

        • B says:

          Please leave your liberal politics up north.

      • cas127 says:

        Roddy,

        Good thing the Left isn’t filled with bigots, otherwise they might alienate people while lecturing and talking down to them from a position of utter ignorance…

        • Depth Charge says:

          Yeah, these people have an excess of hubris and myopia. They didn’t learn their lesson from “irredeemable and deplorable,” instead doubling down.

    • Doug russell says:

      An Biden EO will force all vacant office space to be made availabe to migrants and the homeless.

      • Wryly says:

        Gosh, you’re so smart.

        • nodecentrepublicansleft says:

          San Francisco is dead and never coming back!
          New York City is dead and never coming back!
          Blah-blah-blah!!! Sure…..it’s amazing how many people love to speak w/such certainty re: things they could never know.

          The truth remains, we’re in uncharted waters and nobody knows how this turns out. Just admit the truth: “I don’t know.” because you don’t.

    • Thomas Roberts says:

      Certain companies like Apple and other tech companies will want their employees mainly in a building to prevent ip theft, leaks, working them to the bone, and other such things. It’s important to remember that after the pandemic ends, now that alot of people are more used to doing almost everything on a laptop, shared office space arrangements might become a lot more common.

      Big banks have to hide what they are up to.

      The bigger question is the more typical office employee who does data entry, dealing with clients, accounting, or other such basic tasks. Many of these will probably be automated away, but remote working, enables businesses to hire people in cheaper places. Most companies though, won’t really start planning or announcing big shifts like this until after pandemic ends.

      Another very big issue is that having all your employees work from home has taught employers how to have a functional business with everybody scattered. This will lead to alot of out-sourcing, especially of better jobs like engineers. You don’t need to arrange H-1B visas if you can make everything work, without your foreign recruits leaving their home country, it’s cheaper too.

      • Mondeaux says:

        Mechanical Engineering R&D can’t be done from home. The R&D labs need personnel on site to function.

        • roddy6667 says:

          You don’t have a wind tunnel or a cyclotron in your basement?

        • Thomas Roberts says:

          Some types of engineers are needed on site, some aren’t. They also may only need some on site. They may also have that wind tunnel in India or elsewhere, instead. There has been talk of using software instead of wind tunnels for early parts of engineering work, possibly not a great idea, but being considered.

          As always, there’s a big difference between, what I think will happen and what should happen.

          At some point in the near future, protectionism (forcing made in America in various ways) will become absolutely necessary. It’s important to remember that in the early days of America, America’s founding fathers used protectionism. The free market only absolutely had to exist within America and not with the whole world. They did want America to trade with as much of world as possible, but only when it was on good terms.

        • Lisa_Hooker says:

          35 developers, 2 guys in the lab.

      • Petunia says:

        The back end of banking and finance has always been outsourced to cheaper areas. Most banks and Wall St. firms have the back end processing in NJ, and it has been there for decades. Most do their credit card processing in other states, like FL.

        What’s moving now isn’t the back end, it’s the front office. Goldman Sachs is opening up in West Palm Beach.

      • MCH says:

        Yep… the hybrid model. Although I wonder if people have truly thought this through, the hybrid model looks good in a lot of ways, especially in terms of saving a few bucks. But this is very very typical US thinking… short term focus without regards to long term consequences.

        What you lose in serendipity of significant human contact aside from Zoom is not easy to quantify. Also, the long term shift I think will be significantly detrimental just like offshoring is. In short, it’s just another set of financial engineering.

        Personally, this sounds no different than keeping Schools permanently on a remote model, sounds like a horrible idea. In the long run, it will prove to be a terrible idea.

        I am curious to see how other economies are handling this. Especially in the east.

        • realestatepup says:

          The trickle-down effects will be catastrophic, particularly in urban areas. Large office spaces with thousands of employees partake in the very local economy.
          With no commuters coming into the cities and then going out to local bars, restaurants, gyms, nail and hair salons, etc. after work, these places, if they survived the shut downs, will be gone.
          Parking garages will see their cash flow cut in half at least.
          Why would any employer pay 80 or 100 thousand dollars a month for a large lease when you can pay 20K?
          Urban flight is already a reality in many areas as far as residential properties go, commercial and retail is only the end result of that and remote work.

    • Frank StMaly says:

      And then there’s reality. If 40% of the population doesn’t either believe in the disease or the vaccination then given how reality works it is going to be a disaster. Oh, and a summer of non existent climate chaos. I don’t think anything is going back into the bottle. All this was over due.

    • JL says:

      We’ll see how that works out.

    • pedro says:

      qualcomm is not.

  3. Jay says:

    Metlife has huge commercial property holdings and are tied to derivatives. That damn has to break sometime.

  4. Sea Creature says:

    In the 2000s, a huge amount of A class office space appeared in Tokyo while I was living there. Lots of gorgeous new office towers in great locations. I wondered who would use all this space.

    What ended up happening was existing companies using the cheaper resulting rents to get bigger executive suites, more spacious cubicles (for those that had cubicles) and more / bigger meeting rooms. Things generally less cramped than they were before. Being in some NYC offices, they were also cramped (somewhat) like this when I visited.

    Also too, companies supporting the majors that were in the ‘less cool’ outskirts (think IT support companies, managed services companies..etc), might move their offices closer into town to their customers if the rents fall enough as there is probably more ‘prestige’ being in Manhattan than in New Jersey.

    Central city office space should be fine eventually. It is more the less nice B-class office space in the outer periphery rings (i.e. the unstylish older rings around the city) I am more worried about. That will become harder to rent.

    It will be very interesting to see.

    • shandy says:

      Spot on Sea Creature,
      The strip mall vacancies are going to be parabolic as the current tenants suffer franchise closures, property debasement by all these newly created government mortgage bankers.
      This will make the super mall bankruptcies pale by comparison.

  5. MonkeyBusiness says:

    Turn them into NFTs. Create SPACs to buy them.

    Get states to buy them and have Freddy/Fannie guarantee the mortgage.

    Still not working? Print 10 trillion and work with BLK to create a special fund. Write 5 WSJ editorials to justify the amount.

    Lastly, blame China and Russia.

    Did I miss anything? I think not.

    • C says:

      That is funny……I don’t care who you are!

      C

    • DeerInHeadlights says:

      *Clap clap clap* :)

      • shandy says:

        Darn you it took many years to stop that song from playing over and over again in my mind!
        Shirley Ellis – The Clapping Song:
        Be warned don’t watch the American Bandstand version.
        monkey and deer in headlamps shame on you!

    • YuShan says:

      Heheh!

      Sadly though, this is actually a pretty realistic scenario.

    • roddy6667 says:

      That’s the back-of-the -napkin formula for running America.

    • NARmageddon says:

      @MonkeyBusiness,

      If nothing else works, Washington could always drop some nuclear bombs on disobedient nations (Iran comes to mind) that will not get onboard with the program of outsourcing their wealth to the US.

      Frighteningly, I am only halfway joking that this may actually happen.

    • Mark says:

      Excellent analysis. (That’s why we come here)

  6. OutWest says:

    Excellent interview –

    In my state, state employees are being told that if they can work from home now than they will continue to work from home.

    I work on a project with 50+ state employees, a vendor with 30 out of state employees, and a large off shore team (India) and I’ve never heard anyone infer that they want to go back.

    I drove through Salt Lake City recently and couldn’t believe how many newly finished office buildings were sitting empty…before the pandemic it was a bee hive of construction activity.

  7. Anthony A. says:

    I may be a outlier on this situation, but I am guessing that once the Covid stuff is old news and we are clear, these empty office buildings will be on the market with reduced rents and will be snapped up. Now there may be some that fold up due to financing problems, but they won’t be in great numbers.

    People are like dogs and horses and have herding instincts and like to be part of a group. WFH may be good for some people, but I’ll bet that the vast majority of workers would prefer working in an office where there is contact with others and also to have a sense of being part of the organization or “team”.

    • TomW says:

      This reasoning makes good sense in the longer term.

    • MarMar says:

      Not five days a week, though.

      • cas127 says:

        Agreed.

        It is odd that people view the 40 hrs/wk in the office as an all or nothing affair, vs. the hybrid model that maybe has 2 days in the office for meetings/client/vendor contacts.

        Such an approach would save 60% of rather pointless/wasteful commutes and allow a 50%-60% reduction in leased space.

        And allow for “herd instincts”

      • Anthony A. says:

        My son-in-law works a 4 day week (10 hour days) and he loves it for the 3 day weekends.

        • kam says:

          Four 10 hour shifts was common in mills and factories. The problem always was the production of 4/10’s never seemed to match 5/8’s.

        • VintageVNvet says:

          Kam is correct about the productivity loss AA, at least in the construction industry, in general.
          The old ”rs means” books used to have a section at the back in which their was given various clear rules for loss of productivity; with 5/8s as a basis, it gave numbers for 5/12s, 4 & 5/10s, etc., all the way up to 6/12s IIRC. I do not remember the extent of the data base for those numbers, but their DB was very extensive based on feedback from estimators and PMs all over USA.
          What it did not account for was folks who were strictly paid according to their output, ”piece work” etc., and I have worked with guys who at least claimed they had worked 7/16s doing piece work for a couple of weeks or months, , and then went home for a few weeks to recover.
          One of my fave field schedules was shut down work,,, shutting a shop early on Friday, and opening it with every surface new, me being there all the time, with a couple of ”cat naps” while the various sub contractors came and went.
          Fave office was 3 or 4 days from about 0500 to 2100, or right after the bid was opened on the Thursday for the 4th day. Lots of fun in those days when the faxes received might be a stack 30 or more inches high.

        • Anthony A. says:

          MY S-I-L works in a warehouse supply facility. They have rotating shifts 24/7 with a bunch of crews. Workload is driven by the ability to meet demands of the scheduled trucks that make deliveries. Production is timed for each employee. It’s nothing like manufacturing where I came from back east.

          His warehouse is very efficient and I have been there for a brief tour when they had a family day.

          I was a Plant Manager of a large manufacturing plant back in the “day” and had three unions in the plant of 1,500 employees. We had all kinds of scheduling arrangements and it worked well. Unfortunately, the plant, along with hundreds of others in the U.S., are now somewhere in Asia. And I am retired in Texas where I belong! LOL

    • Tom Jones says:

      I don’t know about what workers prefer, but employers/managers “get off” on being at the top of the “food chain” and definitely prefer people around to boss around. It gives them status and a “successful” self-image. It might sound petty, but I have no doubt that it’s a huge factor in whether or not people are physically required to return to work.
      The boss: “hey, I’m paying you so show up!”

      • otishertz says:

        Try being a boss and not “bossing people around.” Your employees will mutiny, squabble, and destroy your company.

        • Depth Charge says:

          Eh, not so much. “Bossing people around” = micromanaging. That’s not effective leadership and doesn’t produce good long term results.

    • Otishertz says:

      Nah, people with air conditioned desk jobs like government workers would rather phone it in wearing their pajama pants and sipping merlot from a coffee cup at 2pm.

      • kam says:

        Since output is not measured by pricing in the marketplace, government workers will always be “busy” even when they are napping on the couch.

      • PW says:

        Not just government workers! I’m decanting a 2017 Chateau Haut Guillebot this afternoon.

        Helps me focus. :)

  8. Northern neighbour says:

    Housing. A lot of it will be turned into condominiums or rental apartments, driving down housing rental costs in the downtown areas. And the now exodus to the burbs will turn into an exodus back to the downtown area where there is decent public transit, no need to own a car, and entertainment within walking distance.

    • kam says:

      “entertainment within walking distance.”
      Hilarious. Unless you mean fighting your way through the protected thugs on the street.

      • Dan Romig says:

        kam,

        That is one of the factors in Target’s decision to significantly downsize its office footprint in Minneapolis.

        From an Op-Ed in yesterday’s Star Tribune published online March 20, 2021 – 6:00PM:

        “In an email exchange with an editorial writer, a company spokeswoman said that the company needs less space as it adopts a hybrid model of remote and on-site work. “However,” she added, “we are closely monitoring the safety of downtown Minneapolis as we evaluate and adjust our plans for a return to headquarter offices.”

        “Target’s 8,500 employees will still be working in the city, just not everyday.”

      • nodecentrepublicansleft says:

        The protected thugs are in Washington DC, NYC, LA, K-Street, and the state capitols. They run govts and massive corporations. They’re billionaires on the cusp of becoming trillionaires. They pollute your air/water and don’t pay their fair share of taxes.

        You may have seen the films “The Warriors” and “Escape from New York” a few too many times.

        The ‘street thug’ can only steal your wallet and/or car once.

        That Senator, Billionaire or Banker can steal your life savings and make your kids drink dirty water and breathe dirty air. But we have to allow that because all regulations are bad.

    • KG says:

      Spot-on comment. Some of us address the specific subject at hand: “What’s Going to Happen with…(All that Empty Office Space?)”. With a nationwide housing shortage and commercial space glut, conversions are inevitable. Expect massive lobbying for rezoning. The resultant competition should help reduce housing prices. On a less serious note, how about on-site apartment conversions? With all the available space, you could fit a few apartments on an office floor. Its a win-win, lol.

    • Jdog says:

      You are assuming people actually want to live in the cesspools you call cities.
      Recent trends have shown given the chance they run from the cities like they were on fire….

      • nodecentrepublicansleft says:

        In 2019, approx. 82% of Americans lived in cities.

        That # will go down likely…to what….75%?

        Cesspools? Sure, some parts of some cities are. I’m originally from a very small, very rural part of the SE and I would choose death over returning to that backwards, narrow-minded, god-awful place.

        Some small town folks are lovely people, some are monsters. Just like the folks in the cesspools, I mean cities.

        Pandemic aside, just 2 yrs ago, more than 8 of every 10 US citizens chose to live in a cesspool.

        • Jdog says:

          People live where they have to work. Cities are an unnatural environment where people forced into close quarters sacrificing freedoms, dignity, and choices. The more humans you cram into a given space, the less civilized, and more desperate they become.

    • Lisa_Hooker says:

      Adding individual apartment HVAC and water supply/drain services to a building designed and built for common services is non-trivial, sometimes virtually impossible.

    • Ethan in NoVA says:

      I would love to live in a Pier 1 Imports store.

  9. Yancey Ward says:

    Maybe Biden can house the illegal migrants in them. I am sure a deal can be worked out where the owners get $25,000/sq ft. yr.

    • Roddy 2 says:

      The Biden ‘administration’ has already announced that some temporarily catch and release***migrants*** are to be housed in hotels at taxpayer expense, like wandering American bums at S.F. luxury hotels.

      Yet another reason for Mexico/Central America’s poorest and least educated to come north, and if they are informed, to make it to San Francisco for the plus goodies.

  10. Stonedwino says:

    Not having to commute and spend money to commute, now that so many have had a taste of it, most if they can work from home, will do it forever…

  11. Sam says:

    Google is focusing on Houston & PDX for new data centers development & office space expansions.
    AWS PDX is aggressively recruiting for new positions.
    Downtown PDX parking lots are filling up and back to pre pandemic pricing.

    • Seneca’s Cliff says:

      Sam, I think your visiting those downtown PDX pot shops a bit too often. I drive in and out through downtown pdx everyday on the way to and from my shop in near north. The center lane of hwy 26 ,which is the off ramp to downtown is empty in the morning.On the way home I have taken to driving through downtown because it is empty of any rush hour traffic. If office employees are filling up the downtown parking lots they are getting there with telaporters . My son lives in the center of downtown and the only people he sees are Antifas and workmen putting up or taking down plywood on windows.

      • Sam says:

        Senor SC,

        1)businessinsider.com/google-offices-houston-texas-portland-oregan-investment-sundar-pichai-jobs-2021-3
        2)Former division mgr. of JLR-PDX (Jag/Land Rover) now at AWS PDX (Former Oregonian bldg), seeking talent to staff a new division.

        You might check out other arterials (84 & 205) for > increasing density. Restaurants packed, food carts seeing return of previous (office bldg.’s) clients. Every other day is dwtn lunch/dinner meetings for me. Keep your eyes open brother. Being in NKE/Intel area I am well versed in East bound 26 traffic.

        Tacky, tacky on ‘pot shots’. Consider professional help.

        All The Best.

        • Mark says:

          Business Insider makes Pravda look truthful, as far as any balanced reporting …..

          I got sick of their constant propaganda.

        • Seneca’s Cliff says:

          Sam, sorry for the cheap shot, but you might want to consider the state of the old Land Rover store on Grand as a perfect symbol of where Portland is at this moment. After it was abandoned for digs in the Burbs atop an old TGI Friday’s in Tigard the former dealership has been vandalized, covered in graffiti and become a headquarters and campground for vandals, window breakers and hatchet wielding thugs. I was born here, and wish as much as anyone that the Rose City can turn things around. But right now the chances are 50/50 that it can return to the days of Portlandia, or become the next Detroit. My guess is that the parking garages around the old Oregonian building are filling up with the cars of the nightly rioters because that area is close to the besieged federal courthouse and they are getting tired of riding skateboards to their nightly activity.

      • kam says:

        I worked for GP before they moved back to Atlanta. Portland has turned from a small provincial city into a cesspool.

        • MiTurn says:

          And those ex-cesspoolers are now moving into my area in drove. I wished they’d stay where they were.

  12. Micheal Engel says:

    1) The 150K – 200K illegal immigrants per month that are coming to our southern border will flood the black market. This surge will not cause inflation.
    2) NYC, Houston and SF tsunami of empty expensive offices & vacant million of dollars apartments will cause deflation.
    3) US30Y @2.437% and US20Y @2.348%, inverted or not, will be pulled by gravity with NR, because the 3Y will cave in.
    4) The dollar is rising. Gold will test the previous high. A lower high, or a new all time high don’t matter. It will open a new open space to put a new dot between them. It’s likely to be SPX, gold, WTI swing point. A change of character, soon after.
    5) AMZN in 9 month TR.
    6) MSFT & AAPL since Sept 2 .
    7) The whales are more sophisticated than we are.
    8) The $2T support the trillion assets banks.
    9) Property owners ==> adjust your portfolio.

  13. Swamp Creature says:

    Re-engineer the interior of the buildings into residential condominiums. If they can do it with Churches as they are doing here in the Swamp, then doing the same with commercial office buildings will be a piece of cake.

    By the way my old place of employment was in the HQ of the National Weather Service in Silver Spring Maryland. The building was a commercial office building, known as the “Grammax Building”, is now a condominium. It was converted more than 20 years ago. They even kept the same name.

    • MarMar says:

      Wolf talks about this a little bit on the show. Takes time.

    • Jdog says:

      Turning office space into residential requires a massive amount of plumbing, a retrofit which is extremely expensive. Then you have the small problem that no one in their right mind wants to live in these hell hole cities unless they have to. So what you have is the need for very expensive retrofitting, to build something for which there is no demand…. Sounds like a perfect government program…..

  14. coboarts says:

    Just take good care of the Transamerica building. That’s the most beautiful building in the US.

  15. Duke says:

    Host…”Wolf.. what’s up with auto sales?”

    …Begin 8 minute breakdown of supply chain breakdown..

    Host… “my guest has been WR” ..
    That’s all the time we have!

    Easiest guest ever. Ask question and kick back..

    Loved it. Lol

  16. lincoln says:

    Indoor Farming?

  17. timbers says:

    What will happen to all the office space? Child labor housing. If Amazon can retro fit it’s electric delivery vehicles with mini porto potties so it can hire all those thousands of immigrant children to drive it’s vehicles at $5 wages to full fill your order, we convert them to child labor camp accomodations.

    • Anthony A. says:

      Don’t even need them to drive with Tesla’s Autopilot! Just go hand out the packages!

    • stan6566 says:

      Fresh child labour at souther border right now, certified non fake news say 13,000 at least. Surely some successful businesses will have a requirement for such competitively priced and eager to work help.

  18. DR DOOM says:

    The Fed will make them whole due to the great fiat enabler c19. The sheep of the west got played and will not realize it even when their money is worthless and they don’t even have a pot to piss in.

  19. Micheal Engel says:

    1) China is roaring in the year of the ox and SF feel the after shocks.
    2) China is sandwiched between the Himalayan mountains and the unsinkable : Japan, Taiwan, S.K. and Australia.
    3) US + India navies dominate the straights of Malacca and comrade Putin have the valve to China Natural Gas.
    4) China, don’t lecture us.
    5) Stop yelling at Putin, because he is the keystone to China
    energy and the ME stability.

    • 6) take Putin down, and China falls in line. Realpolitik 101. The US took a Machievellian step backwards in 2020.

      • kam says:

        Why take Putin down? Russia can be an ally, if the American Junta would wake up.
        China is eating our lunch.

        • ru82 says:

          Yes. Most Russian people like America I think. Hopefully after Putin we can have a good relationship

        • Jeff says:

          You think Putin is the source of the problems between the US and Russia? Are you serious?

      • DR DOOM says:

        American youth have parades on sexual orientation. The Russian youth have parades on their realitives lost in the Great War. Take Putin down? Look around on wh0 has gotten rich and powerful repeating that trope. It ain’t you me.

    • stan6565 says:

      Stop yelling at Putin because he will not give Russia’s natural resources away, just to enable the locusts’ life extension.

      And they have big sticks.

      • MiTurn says:

        I agree. Strangely, Putin seems to have Russia’s best interests in mind. Too bad the same is not true with our beloved leader(s).

        • nodecentrepublicansleft says:

          You need to differentiate…the Russian people are fine.

          Vlad Putin is a murderous former KGB agent who runs a disgustingly anti-human crime ring. Educate yourself on Putin.

          Touting Vlad Putin is utterly ridiculous. Perhaps don’t let Rupert Murdoch tell you what to think about everything in life.

  20. kk says:

    Why pay for an office when you can get online employees to use their own home? Why pay US wages when perfectly competent English-speaking workers are available online for a song? American wages and lifestyles will only be for the highly skilled/wealthy – office drones will go the way of the steel/car/oil workers and there is nothing that can be done.

    • Mike T says:

      Totally agree kk. Once the bean counters see the true cost savings of moving all of the corporate office costs onto the remote workforce and then geo arbitrage to get the lowest cost workers in Timbuktu then bingo. Mass office downsizing.

      • Anthony A. says:

        Bean counters will be part of the WFH crowd and also may be part of the Timbuktu move. The joke could be on them too!

        • stan6565 says:

          And then the bean counters as well as the beans they were counting will be so skinned they will not be able to afford to buy anything at all. QE or FED printjob or whatever else. Trillions of dollars to spend but beer costing quadrillion and a bit.

          Wait until they have to pay for water *tm* and air *tm* acme inc.

  21. jon says:

    Let’s wait for DeBlasio to invent the worst possible solution.

  22. IanCad says:

    Castles were the big thing in the Middle Ages. Got bucks? Gotta have one.
    Then along came gunpowder and cannons and the castles were abandoned; their remains litter the countryside of the, then, civilised world.
    Abandoned offices?? Some will survive or be converted to other uses, many – perhaps most – will be demolished.

    • Xabier says:

      It was very common in the Middle Ages to build huge castles and then find that you didn’t have the revenue to maintain them.

      It used to be our family business in Spain – castle management – and the glorious fortress could turn into a leaking wreck if revenues declined, in about 100 years or less.

      When wondering what will happen to all the office space, apart from hybrid work, it would be sensible to bear in mind the plan to cram the ‘essential’ element of the population, who remain after ‘viruses’ have cleared out the rest of us, into very dense smart cities.

      The controllers will prefer blocks rather than suburban houses for their digitised and injected slaves.

      Look into it, it’s the future that is planned: WEF, UN, etc.

      Of course, civilisational collapse might well overtake the planners before they achieve their aim, but it is moving rapidly.

    • Engin-ear says:

      Agree.

      Not clear if the mass usage of office space will fit the financial limits of the the coming business models.

      I expect the office space meltdown, exactly as brick’n’mortar shops failed to compete with lower cosr e-commerce.

    • Paulo says:

      Good comment. Change and adaptation is simply fact.

      An empty building is a deteriorating building.

  23. Ralph says:

    Make all of them into giant homeless shelters and illegal immigrant apartments. Have some floors for growing food, a central cafeteria and rooms for ESL classes and a gym. Can make solar panel film on windows and windmills on top. Use rain water for the toilets and a garden on the roof and make some of the buildings into vertical farming centers.

  24. CreditGB says:

    Softbank has a plan to invest 7.9 billion and convert them to vertical shopping malls. Tenants will be week to week rentals, have free coffee, free Uber services, expensive art work, open floor shop concepts, with all utilities included.

    In 2022 an IPO will be offered secured by their leases and 4th mortgages on the real estate.

    What an opportunity, can’t wait!!

  25. Otishertz says:

    Who wouldn’t want to just phone it in wearing their underwear instead of getting up and going somewhere to work. Employers are going to realize just how much dead weight there really is in their organizations if they haven’t already. Work from home jobs are probably the least secure right now.

    Unintended consequences and third order effects are coming.

    • Sam says:

      True.
      Exemption for gov’t workers where bureaucracies are forever.
      onlinelibrary.wiley.com/doi/full/10.1111/j.1467-9299.2008.01738.x

    • nodecentrepublicansleft says:

      The dead weight in every organization I’ve been part of has been MGMT.

      You can work hard and accomplish a lot from your home….in your underwear.

      There is nothing magic about working in a different building.

  26. Cities which were built to house white collar factories, now provide living space, urban nature preserves, parks and playgrounds. Cities are safe havens, rural America is like Cambodia after the Vietnam war. Pol Pot forcibly removed people from the cities, to the countryside, where the Khmer Rouge were waiting. The blue exodus to red states will be brief and unnoteworthy, and will persist until the vast open spaces are pacified. The bicentennial of the opening of the frontier, 2070, will be celebrated with the arrival of a new American political consensus.

    • Depth Charge says:

      “Cities are safe havens, rural America is like Cambodia after the Vietnam war.”

      Haha, what are you smoking, buddy? You need to get out more. Cities are where your life is at risk if you venture to the wrong area. Rural America is the safest place you can be.

    • tom18 says:

      Having just gone through a family tragedy & seeing the response from my rural neighbors, I’ll forgo the “safe havens”.

    • crazytown says:

      I’ve never been a huge fan of your posts but this one just makes me feel bad for you.

    • Lisa_Hooker says:

      I’m so glad I’m a Beta. Alphas work so hard and have so many worries. As for Deltas – yuck!

  27. Anthony says:

    Nah, we are heading into the greatest depression the world has ever seen….

    Most people will lose everything

    Who cares about office space…..

    • Jeff says:

      If everybody loses everything, who then owns everything? How does that work?

      • Anthony says:

        I said “most” people…the 1% will own you……….like they always do………..

  28. RightNYer says:

    I’ve said it before and I’ll say it again. The Goldman, Bloomberg, and Apples of the world won’t make this determination. The market will. And, just like the companies that claimed they would NEVER go to business casual, all will eventually capitulate when they are losing good people to their competitors.

    I am a former office worker who has worked remotely the whole year, and I have spoken to many friends and family who are in similar situations. While all of us miss some aspects of the office, NONE of us are eager to go back 5 days a week, and anyone who expects us to do so is going to have to pay significantly more.

    From my anecdotal experience, most people desire anywhere from 1-3 days a week in the office. And that’s a good thing, because it not only means that companies can drastically reduce their office footprint, but it frees up the exurbs for people to live in, reducing overall housing costs. The type of commute that is unbearable 5 days a week may not be so bad 1 or 2 days a week. I’m thinking about places like Harpers Ferry, WV for working in D.C. and places like Milford, PA or New Paltz, NY for working in NYC.

    • Lisa_Hooker says:

      Thursday and maybe Friday morning would be good. A chance to hook-up for the weekend.

  29. shandy says:

    Wolf,
    Is it a secret that the Chinese city worker owns his or hers home and property outright by the age of 35?
    No never ending always increasing taxation on such?

  30. CreditGB says:

    I have heard that most of the housing and apartments in the “abandoned cities” of China are actually sold and paid for by Chinese families who can’t afford to move to their far flung real estate investments. Real estate being almost the only investment opportunity they have access to. Most of them sit with plain concrete walls, un-maintained, and will never see an occupant before being torn down and replaced with new.

  31. sunny129 says:

    I have been reading article after next re empty offices++ for the last 6-12 months but, yet to see the detriment effect on the stock mkt?
    What am I missing?

    • Wolf Richter says:

      My Wolf Street Index of Office REITs (Boston Properties, Vornado, etc.) is down something like 26% from February 2020, despite the surge in the S&P 500.

  32. briny says:

    With the switch to the hybrid office, I’d expect to see changes in office furnishing and equipment, so more used items going on the market and changes in what’s marketed for the hybrid office.

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