The Dynamics Behind the Ugly Amount of Empty Office Space

This sort of sudden structural collapse in demand for office space raises some existential questions for landlords.

By Wolf Richter for WOLF STREET.

Companies are not massively defaulting on their office leases, and that’s the good thing. But they have put a historic amount of vacant office space on the sublease market, while continuing to pay rent to the landlord. They decided they no longer need that much space, now that some form of flexible work, or hybrid work-from-home, or even permanent work-from-anywhere is being integrated into office real estate plans, cost cutting efforts, and footprint-reduction strategies.

Now, 14 months into the Pandemic, office occupancy – workers actually showing up at the office – is still dreadfully low. As of the end of April, office occupancy in the 10 largest metros averaged only 26.5% of where it had been just before the Pandemic, according to Kastle Systems today, whose electronic access systems secure thousands of office buildings around the country. In other words, the number of people entering these offices was still down by 73.5% from pre-pandemic levels and has barely made headway in recent months:

The epicenters of work-from-home show the biggest drops in office occupancy rates, according to Kastle’s “Back to Work Barometer” at the end of April: in San Francisco, the occupancy rate was at 14.8% of the pre-Pandemic level, in New York City at 16.2%, and in San Jose at 18.0%.

Among tech companies, 95% expect remote work for at least a few days a week; 9% said that they will never return to the office at all; another 47% said that they will need less office space; only 13% said they would need more office space, according to a survey by Savills.

A survey of Californian residents found that 82% of the employees who now work at home want to continue working at home at least some of the time. Only 18% don’t want to work at home at all.

But even at the top end of office occupancy, working remotely is still king. In Dallas, office occupancy is at 41.2% of where it was pre-Pandemic, and in Austin at 40.2% (click on the chart to enlarge):

How exactly this will shake out for office real estate is getting complicated, as they say, with everyone involved having different ideas as to what they want.

A survey by Accenture of 400 North American financial-services companies found that 80% of the executives would like for workers to spend four or five days in the office post-Pandemic. Many of them think that working at home makes training younger employees more difficult and is hurting company culture.

But employees are looking for flexibility, now that they have proven that they can be productive at home.

“You’ve seen the senior executives sitting in their office and there’s nobody behind them,” Laurie McGraw, head of Accenture’s capital markets industry team in North America, told Bloomberg. “And then you see the entry-level folks starved for in-person interaction because they need to be coached on a more regular basis. And then there’s the vast middle that’s content to be home.”

The work-from-home year 2020 generated record profits for banks, proving that work-from-home can be managed, and many employees question the need to commute every day. According to Rob Dicks, Accenture’s talent and organization head for capital markets, employees are likely to push back against a full-time return.

Despite whatever executives would like, the reality of the cost-cutting aspects of working from home has already set in. According to Accenture’s survey, of the same executives:

  • Nearly two-thirds expect to cut their office footprint by 11% to 40% over the next nine months.
  • Over half are planning to relocate employees to new lower-cost locations.
  • 9% said they’ll close their headquarters in a major market.

Financial firms have been all over the place with their plans.

Goldman Sachs, in an internal memo seen by Bloomberg, told its US employees that they should be prepared to report to the office by June 14, according to an internal memo seen by Bloomberg.

Vanguard Group, which employs about 17,300 people, is planning a hybrid model for most of its staff, with many employees able to work from home on Mondays and Fridays.

Bridgewater Associates is going for the hybrid model as well and will allow their employees to work from home at least part of the time.

Deutsche Bank, which employs about 8,000 people in the US, is planning to let its staff work from home for up to three days a week. Separately, the bank had said that it wanted to reduce its office foot print to cut costs.

Deutsche Bank is offering “flexibility” as an inducement for hiring and retention. A survey had found that 90% of its employees wanted the opportunity to work from home at least part of the time after the Pandemic. Office space will be reconfigured to accommodate the hybrid model.

JPMorgan Chase told its employees in a memo to report back to the office by early July on a “consistent rotational schedule” that would allow staff some flexibility.

For landlords, these are existential questions as an enormous amount of office space is now vacant and available for lease in the US, and more office towers are in the process of being built, and nothing could have prepared the commercial real estate industry for this sort of sudden structural collapse in demand.

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  127 comments for “The Dynamics Behind the Ugly Amount of Empty Office Space

  1. Bob Hoye says:

    Good review.

    • Nacho Libre says:

      VTS monthly report (behind paywall) says it’s Office Demand Index is within 15% of pre-pandemic levels nationally.

      This keeping in mind office occupancy and office space demand are orthogonal metrics.

      • KGC says:

        The Seattle Times had a front page article on 3 MAY about how office space demand was back to pre-pandemic levels. This was also the line in a similar article in the Puget Sound Business Journal. VTS was the major tool used to justify this line of reasoning.

        Strangely a month ago the local news was all about how vacancy rates were at an 11 year low.

        • Wolf Richter says:


          So you made me look at that article in the Seattle Times. The author refers to an index of “interest in office space” by a start-up that the author then linked and promoted. “Interest in office space” means absolutely zero when there is a record amount of office space on the market, except it promotes that company. Maybe the author got paid by the company to place this article, which would make it a “sponsored post.” I get contacted all the time by some authors to place those types of articles with a link to their client (which I always turn down). The RE industry is big on this, but so are other industries.

        • Swamp Creature says:

          The Seattle Times is one of the worst rags out there. I wouldn’t pay attention anything that is printed in there.

        • Hong says:

          San Francisco depends on the 1.5% payroll tax on larger companies to fund their social expenses, like subsidizing registered to vote bums from all over America. Now that office buildings are vacant and companies rightly refuse to pay city payroll tax for employees in distant suburbs, S.F. has instituted a substitute gross payroll tax to keep its financial head above the sewage. That will drive more and more companies out of the city.

          It’s a death spiral that will thankfully destroy funding for the politics that has destroyed the civic life in the city.

  2. Anthony A. says:

    Non wonder the golf courses are full here during the week when us retirees like to play. Cant’ even get a decent tee time.

    • Wolf Richter says:

      Working from home has its benefits. That’s why people like it :-]

      • Anthony A. says:

        Yes, the course I play on just raised the greens fees 33% (I kid you not) for non-member play (semi-private course) What’s that inflation thing we discuss around here? LOL

        • Mr. Wake Up says:

          I’m surprised the ESG crowd hasn’t come after the golf courses yet? Or have they? The water that is wasted especially where its scarce.

        • Rosebud says:

          More golf courses should put in Par 6’s, and build strategically placed asphalt cart paths, so that a tee off can bounce its way to a doable Condor. The coarse Marshall is right there too, and sees it, while talking on the phone with Aussie Norman, still suffering his covid headaches, I don’t know…?

          Just Kraken memes tonight.

        • Who was the last president who didn’t play golf?

        • Harrold says:


      • Chase Metz says:

        Ha. I owned and managed a medium size software company (130 hc) and sold in the era. WFH is functional for a fraction of the people because the natural desire for “freedom” is easily rationalized to reduce focus. WFH is a cruel joke whose effect on productivity has not had sufficient time to measure the impact.

        • Yancey Ward says:


        • NoEasyDay says:

          Of the places I’ve been employed only a third of the workforce were honestly engaged and productive.

        • Javert Chip says:

          An old saying has it that if you’re a skeptic, you don’t believe the numbers; if you’re a cynic, you don’t believe the premise.

          Count me as a skeptic about corporate WFH. I think it’s wildly overrated for productivity, creativity & corporate culture. (NOTE: entrepreneural WFH is a totally different animal).

          It’ll be a rough couple years for landlords (a notoriously unsympathetic crowd to begin with), but they all knew the game they were playing.

          In a year or two, when citizens get fed up with politicians playing totalitarian games, I wouldn’t be surprised to see office occupancy back to 75-80%+ of what it was in 2019.

        • Harrold says:

          I almost miss the constant interruptions and smelling what everyone is having for lunch.

      • Artem says:

        I guess a golf course is a second home to some.

    • Swamp Creature says:


      Get up at 3AM and hit the repeat button on your phone for an hour until you get through to make your tee time. Or hire some young punk to do it for you.

      • Anthony A. says:

        We do something like that. One guy in the group starts speed dialing the minute the pro shop opens. Usually, we get a decent time, but sometimes, not so lucky, We have noticed lots if working age guys on the course since the pandemic downturn allowed play to start up this year. This is Work From Anywhere at its best!

        • Swamp Creature says:


          You see I know more about what is going on with your golf course than people in your own community. I noticed here the golf courses are more crowded than ever. I started playing the Par 3/4 mini 9 hole course more often, because we can get on it. And its much cheaper. But you have to pull your own manual cart. The hell with fighting these mobs on the main course.

        • nick kelly says:

          Since everyone is talking golf, and judging by dozens of political comments yesterday, check out book: ‘Commander in Cheat’ by acclaimed sportswriter Rick Reilly. Based on his personal experiences and interviews with 100 course developers, players amateur and pro, and caddies.

      • Swamp Creature says:


        We were teamed up with a couple who were closing on a real estate deal while playing a round on the golf course. On nearly every hole the phone would ring or a call or text would be made. Very annoying. If this happens again, I’m not going to be so nice. I’ll call the marshals and tell them to get this jerk off the golf course. He can take his WFH or WF anywhere bulls$it somewhere else. Not here.

        • Anthony A. says:

          I just play with retired folks who only get calls from their wives to check on where they really are. Oh, and also to have them pick up groceries and other stuff on the way home. Henpecked….LOL!

          I agree about the WFA guys who are on their phones (working) when playing a round. That must be irritating for those who are with them.

  3. GotCollateral says:

    “L”-shaped recovery :P

    And the big, multiple-felonius-money-laundering-terrorist-abetting-government-supported-banks will try to hold the world hostage with lending to protect the corner they’re stuck in… might be TBTF, but never to big to be made obsolete… esp as their lending book stagnates and contracts…

    DeFi has painted a big target on their backs… and will continue to cut into their margins on trading revenue on all asset classes and derivatives… some of their employees are secretly behind some of the biggest defi derivative protocols anonymously…

    Just hope they keep kicking the can so I can continue to build my tail risk position agaisnt this trash on dex’s :P

    • Mr. Wake Up says:

      Chase has to force staff back they need to lead by example. I hear JD on the grand reopening call that come fall no more mask will be required at the office. He even went on to say he would make the jab part of his sinister plan or be fired if it were legal to do so.

      He even referenced gambling twice on the call.

      This time around the casinos we know as the even more 2BTF banks will def go bust this time. (This decade)

      Plan and prepare accordingly.

      • Shiloh1 says:

        Was he wearing his White House cuff links for protection?

        • Mark says:

          Right …. the White House cuff links Obama gave him, instead of the orange jump-suit he deserved.

        • Dan Romig says:

          Don’t forget that President Obama’s second Attorney General sat on the New York Fed’s Board of Directors under then President of the Board Geithner. JD joined the Board two years after the AG had left it.

          Full disclosure: I have had JPM in my portfolio for a year. “If ya can’t beat ’em, join ’em.”

    • YuShan says:

      Yes, the future of banks isn’t great :). Fintechs are going to eat their lunch and much of their loan books will go bad in the next crash. Then central banks are moving to DCBC, meaning we are moving away from fractional reserve into full reserve banking over time, further reducing profits for traditional banks.

      You can already save and pay in gold and silver, held outside the banking system, just as easy as with fiat money. The risk of official bail-ins and unofficial bail-ins (i.e. you are only allowed to take small amounts per month out of your account) is very real, especially in Europe (happened in Cyprus and recently in Libanon). And with rates on big accounts already nominally negative (let alone adjusted for inflation), I think more and more people are going to take at least part of their money out of the banking system.

      • Old school says:

        My understanding is the agreement is the Federal Reserve compromise stipulates that they will not bypass the commercial banks. Commercial banks are the main money creators with loans. Remember the Soviet Union only had one bank and that didn’t work well.

        I don’t know what the future holds, but if you don’t have a banking charter it’s hard to compete with banks because they are allowed to use 8:1 or 10:1 leverage ratio.

        • YuShan says:

          Imo, the way this is heading is that central banks will directly fund governments. And to do that to the maximum extend, they have to get rid of fractional reserve banking. That way they will be able to print as much as nominal GDP growth without inflation getting out of hand (say 2% inflation + 2% real GDP growth = 4%. That is the deficit you’ll be able to run without borrowing).

          Commercial banks will still be the interface to the customer (that is what they mean by not bypassing), but it will be a lot less profitable. Also, it will be much easier for fintechs to compete with them, because you are basically running a full reserve system.

          Interest rates on CBDC will be zero or negative. You could still earn interest on time deposits, but the bank would have to borrow that money at market rates. Your deposit will be like a bond and won’t be insured by FDIC. Deposit insurance isn’t necessary anymore because in a full reserve system bank failures are no threat to the system anymore and removing the leverage makes bank failures much less likely anyway.

          Of course this is speculation but this is my best guess of where this is heading.

      • George says:

        YuShan, the way real estate is flying off the shelf with all cash deals perhaps a silent bank run is already happening?

        • YuShan says:

          I think that at this point it is still more driven by greed and speculative frenzy than fear. But that could soon change.

      • urblintz says:

        Nydig is joining with FIS to help the banks move onto the crypto crazy train. As banks see clients sending dollars to exchanges like coinbase and defi platforms like nexo, which are offering very enticing interest rates compared to the negative rates offered by the real world, this move will potentially enable 300 million US bank accounts to buy and hold crypto. I guess one will be able to have an interest bearing bitcoin account with BOA, etc. Article I read said these accounts will not be FDIC insured…


        • YuShan says:

          Yes, banks have to look into new business models now. Deposit taking is dead.

          In Europe I see that many banks are encouraging people to take their money out, because it makes them a loss (they have to pay a negative rate to the ECB but have a difficult time to pass this on to their customers, though they are increasingly doing that). But on the other hand, they need to retain their customers because they can sell them other stuff like loans, insurance, investment products etc.

          But new opportunities are now opening up. And offering services in the digital currency space is the obvious one. New companies in this space can partner with existing banks, which gives them access to a massive existing customer base. Plus, these banks are regulated entities which they often are not. For the banks it can offer new revenue streams, but it is also a defensive move because if they don’t do this they will lose (even more) customers to fintechs.

          One thing that I follow closely is Kinesis monetary system, which basically re-monetises gold and silver. Now that even the government of the 4th largest country in the world (by population) has partnered with them (while having a blanket ban on crypto since 2017), people can spend and save and earn yield on gold and silver. And this offers the government also a significant revenue stream that they otherwise wouldn’t have. This can now be seen in action as a working system.

          But any bank or fintech can adopt this now in one form or another (it’s a white label solution), connecting to this and earn revenue, without having to invest much. So any bank could rebrand this as their own gold savings account and more. If they don’t, their customers will simply leave to a competitor that does offer something like this.

          I think traditional banks still have the advantage of a massive existing customers base of people who often have banked with them for decades. And many of these customers don’t understand digital currencies and are afraid of them. But these banks can dumb it down for them and use the trust that people have in them to get people into new opportunities. I think that is what they will try to do.

  4. 2banana says:

    Banks had some other things going for them too…

    “The work-from-home year 2020 generated record profits for banks, proving that work-from-home can be managed…”

  5. Rosebud says: serra-art-display-qatari-desert-qatar

    Richard Sierra builds a line of giant 50 ft Monoliths in the desert.

    Whew, that’s Henge creep, lol

  6. zr says:

    Just take the 3d version of these vacant office spaces and lease them as NFTs.

  7. Swamp Creature says:

    I was in Denver on TDY in 1987 during the oil bust. I went jogging in the downtown area and saw all these new office towers that looked completely empty. The streets were nearly deserted. I asked a dude on the street what was in those buildings. His response “Nothing”. They were completely vacant. He was right on the money. This will be repeated in cities across the country. There is no need for these buildings anymore.

    • Depth Charge says:

      Retrofit them for affordable housing. That’s what’s needed in this country.

    • Swamp Creature says:

      Do a cost analysis. If it costs more to retrofit them for housing then knock them down and put a pollinator garden in their place. Good for the environment, the community, and the urban climate (reduces Heat Island effect). Go for it!

      • nick kelly says:

        Depends on structure. Not to be confused with malls. Offices usually have windows, some have bathrooms ( usually 2 piece) Usually multi-floors unlike mall, addition of plumbing possible. The mall is the cheapest construction possible, the anchor is really just a warehouse. BTW: the idea that malls have been dogs since forever is demonstrably false. Many of the A malls were doing well until C 19. It’s only in the last year that their appraisals have been slashed.

        Some offices suitable for conversion, some not.

    • Paulo says:

      Even if they are in ‘use’ they are still mostly empty. Imagine a 12 hour work day…then weekends shut down. The office buildings just sit empty what? 2/3 of the time if you add in weekends and holidays. What about an 8-10 hour day? The numbers just don’t make sense for the expenditure of new construction.

      If I phone an ‘agent’, do I care if it is in some tower? Half the time it is in India, or on the east coast. I always ask what their weather is doing? They could be on the can for all I care.

      • Implicit says:

        haha Hopefully their not in an outhouse in northern Canada. Puts a shiver in the timber.

    • Swamp Creature says:

      When JPM/Chase outsourced their mortgage servicing customer service to India back in 2004 I found the service to be much improved. I got a polite female agent who spoke excellent English who helped me pay off my mortgage in record time. I got no such help from the US based customer service agents. The US based agent didn’t want the mortgage to be paid off so they were deliberately rude and uncooperative. I couldn’t even get an accurate amortization table from them.

      • Socal Rhino says:

        The big sell side firms all had good middle offices offshore, initially. Even the custodians. A few years later, not so much. It can be done well, assuming quality is an actual goal and just cost.

  8. Seneca’s Cliff says:

    In most of the large and medium sized cities across the U.S. if you run across a member of the monied class and ask them from whence their wealth comes, it is usually commercial real estate. Not necessarily the .oo5 % like Gates or Koch or Walton but the crowd funding the opera and the symphony. 60 years ago they would have been industrialists, timber barons or mining Tycoons, but now they own strip malls, office buildings and parking garages. This collapse in demand could reshuffle the decks and blast a hole the the society pages.

    • raxadian says:

      Owing malls has been a losing business for decades; is supermarkets were the money is at. People still likes to go in person to get their food if possible.

      That and gas stations; is troublesome when one closes because you can’t repurse to anything but a car wash without a lot of money but have one in a good location and people will go there to buy whatever because is open 24 hours a day.

      This is changing, people is getting more used to buy and or order anything online or at least by phone calls.

      I can’t buy shoes online, the size is always wrong and if you have to return them and get a different size it takes too freaking long. Not to mention that even the same size is different how it fits depending on brand and type of shoe.

      Hence I haven’t bought shoes since 2019, still have two working pairs, hope they last me long enough.

      • Depth Charge says:

        Buying clothing online blows, and it’s horribly inefficient, yet Wolf gave me a spanking telling me I was wrong and that it was terribly efficient. I don’t know what’s efficient about sending 6 straight online orders back and keeping nothing. I need to try clothes on. Back in the day I could easily find a large haul at the mall in an hour. These days it takes weeks if not months to find a single item online that fits.

        • Petunia says:

          Now you can’t try on in many stores. The stores encourage shoppers to buy anything they may like to try at home and return the ones they don’t want to keep. It’s crazy and really annoying.

    • Tom S. says:

      Chicago booth school did a research piece about who makes up the top 1%, surprisingly or not it is a lot of small business owners as well who make it to millionaire status.

      But small business is in the process of getting left behind. If capital never runs dry what’s to stop the multinationals from becoming even bigger monopolies than they already are? Work will be done remotely from the cheapest labor nation possible. Many white collar people are being very short sighted about the future wfh realities.

      • Jdog says:

        Small business is not being left behind, it is being purposely exterminated.

      • Lou Mannheim says:

        “Work will be done remotely from the cheapest labor nation possible.”


        Or the cheapest server farm. When you are ruled by corporations as we are, then the maquiladoras, Shenzhen factories, AI or whatever makes more sense. It’s too bad Tech isn’t the dawn of a new Industrial Revolution like it’s been sold, because there’s only so many baristas required per square mile.

      • Implicit says:

        Seemingly,monopolies have been made legal.
        They squeeze the small businesses out, unless you want to take huge loans out to pay lawyers and accountants to keep up with the paper work, and other payouts.
        Big company lobbyists get the government to pass measures that are too costly for small companies, stifling entrepreneurship.
        The US likes big companies to form long standing oligarchical relations with that promote wealth for the already wealthy parties involved.
        Like Fiefdoms. (Definition of fiefdom : an area over which someone exercises control as or in the manner of a feudal lord.)

        • Jdog says:

          So the question begs to be asked, why do the people continue to go to the polls and vote for the people who are enslaving them?

          Imagine if in the next election, the majority of the people wrote on their ballot.. “I consider the current governmental system to be illegitimate, and does not represent the interests of the American people. Furthermore I do not vote for, or support it in any way, shape, or form”.

  9. Trucker guy says:

    I struggle to have faith in the whole work from home craze. I was homeschooled online for the better part of my education. Saw lots and lots of people come into the system and flunk out immediately because most people just simply aren’t self starters on stuff that isn’t enjoyable. I really doubt human nature changes that much from the 10-20 age demographics to middle age and on. I’ve worked jobs where there isn’t a direct supervisor and lots of 2 hour lunches and frivolously driving around. We even had a crew that would go into Walmart and play the little video game kiosk demo deals.

    Maybe I’ll be wrong but I’ve seen this exact thing before. Productivity will probably plunge but also, I think having a set 9-5 40 hours a week schedule is something most people need and benefit from. I could easily see something happening like billable hours for mechanics. You have x amount of paid hours to complete a task and anything extra is free that would otherwise be paid sitting in an office if something goes wrong or whatever.

    • Depth Charge says:

      WFH is not here to stay. People are out golfing instead of working, or playing video games, commenting on blogs, etc. They’re milking it.

      • Wolf Richter says:

        Working from home works just fine. Been doing it for many many years. But it doesn’t work for everyone. I know quite a few people who’re doing it, consultants, tech people, software engineers, a corporate transaction lawyer, etc. It works for all of them.

        • Depth Charge says:

          I should have been more clear, Wolf. There will always be some work from home, but not anywhere even close to what we have going on right now. Companies will reign that in as much as possible, because productivity is way down. Self-starters like yourself are not as common as one might think.

        • Depth Charge says:

          By the way, I know a nurse who is starting a new WFH job seeing patients online. It’s some newly created position. Not sure how that will work out.

      • Swamp Creature says:

        WFH can work or not work depending on the job you do. We’ve been in a hybrid mode for many years. WFH 85%. Work in the field 15%. A lot of self employment jobs are like that. Before and after the pandemic same breakdown, 85% to 15%.

        When I was in the government WFH didn’t work. High security clearances require SCIFs, Can’t do that at home. Sorry. Also need personal collaberation, on a daily basis to be productive.

        WFH should be evaluated on a case by case basis. If you can get the job done with WFH or hybrid version then go for it. If not then its just another boondoggle which neglects the primary entity which should be priority number one, the customer.

        I’m going to laugh when all these WFH proponents find their jobs which should have never been put in a WFH mode outsourced to India, Begledesh and other 3rd and 4th world countries. Don’t come whining to me.

    • Lisa_Hooker says:

      @Trucker – WFH is a bit like eating. Some folks learn to manage their diet and exercise. It’s very apparent that a lot of folks slide into obesity.

    • Dave Kunkel says:

      When I worked for a large networking company, they provided a number of courses you could take online for free. After I had completed a course one time, I received a call from the group responsible. They wanted to know why I had finished the course. Apparently almost no one else had done so.

  10. Mike R says:

    I’ve worked from home the majority of my entire career in sales. I could never go back to an office. People flatulate, gossip, waste tons of other people’s time, have incredibly gross habits, participate in really MEAN office politics and back-stabbing, and worst of all is the repeated sexual harassment, and other executive ‘perks’ that go with not only their intimidation of all employees but this notion that they have everyone of you by your short hairs. When not in an office environment and within their physical presence, a LARGE amount of all this bad stuff goes away entirely. Executives in their corner offices, largely now ‘by themselves’ if they even go in, have to be absolutely beside themselves with no one around they can bully, harass, or even ask for sexual favors of. They are missing the females and all that ‘eye candy’ they had at their disposal, even if they didn’t cross the harassment line.

    We’ve basically had no flu for the entire past year or longer, and people are actually getting more exercise, as they now feel no pressure to stay at the PC all day, and can get outside every day whenever they feel like it, go for bike ride, and then come back in re-freshed, so yeah productivity is probably sky-rocketing, and the elimination of all that office emotional trauma and politics and gossipping has to have phenomenal positive mental health effects on 10’s of millions of former office workers.

    People all over are now finding out how truly TOXIC these office buildings had become in terms of all this human junk, and they are probably not missing the horrid commutes, the stress from traffic, sitting in that vehicle exhaust pollution going right into their air vents. Much of the HVAC in office buildings is also woefully toxic, haboring all kinds of mold, dust, pollen, and quite a bit of airborne particulate. Its like sitting all day in a petri dish. People just did not realize how bad it was, and adapted. Now everyone working at home, can’t possibly want to go back, and these execs who want them back are in a world of hurt. Quite probably the only people who miss it, are those who were the bullies, and harassers, and gossipers, and evil political fools, who plotted out their daily victims, and did not really do any work at all. So that is gone, and now they have to work, or they will be found out, and they can’t intimidate someone else into doing their work for them. The studies on all of this have not even yet begun, but its gonna be revealing, and pretty devastating for those who worshipped the white collar offices.

    It’d be nice to stick a fork in these office buildings. No loss whatsoever as they’ve uglified the environment, and harboured all sorts of nasty human created and unnecessary mean spirited ‘stuff.’

    • Mike R says:

      Back in 1999, I got very close to writing a book, wherein I was going write about how malls were going to disintegrate, and go away, office buildings too, gyms, and even many retail strip shopping locations. That also included brick and mortar banks, which I figured would be all but gone by now. I didn’t know what the primary catalyst would be, but the writing has been on the wall for decades. Folks this is not transitory, but secular, and a whole lot more destruction is going to occur, moreso as a result of the unrepayable national and corporate debts. Globally we are in the quadrillions. NOT trillions. I figured if anything would take out most of the buildings, and that type of environment, it would have been derivatives. Those have not gone away. They will be just as ‘earth clearing’ of mankind’s largesse just as Covid has been. Our banking system as we know is on its last legs. The central banks and the Fed in particular has NO way out of the mess they’ve created. Its a black hole, and there is no going back for these central banks. They will implode themselves and every single fiat currency. And that includes especially the fraud known as crypto’s, which ironically I believe will upend the 5 biggest banks in the US. Crypto’s will end faster than they came in. Its an absolute mathematical certainty, as their very design is not mathematically sustainable, and inherently designed to implode. A very malicious set of characters put Crypto’s in motion, and its primarily because they felt that the human population would be too mathematically stupid to figure out what they had created. Charlie Munger is one of the smartest math geniuses on the planet, would blow away people like Bill Gates and even Buffet on math, and people don’t really know that about him. He was onto the crypto guys hijinks from day 1, and he won’t let anyone deter him from telling you how evil they truly are.

      • Lou Mannheim says:

        Cryptos, if not denounced by the relevant Agency, seem like perfect capital flight mechanisms, where the value also reflects any inflation. That’s why the hedge funds and family offices are long – they’re a hedge against that doomsday scenario (or maybe that’s the plan, I never understood why they were permitted in the first place).

        • Depth Charge says:

          Oh yeah, 100%+ gains in a day are perfectly rational. Crypto is nothing but rampant speculation run amok. It will end in tears for most. There is a spectacular crash coming.

        • Lou Mannheim says:

          Never underestimate our drive or capacity to destroy each other:)

      • Engin-ear says:

        Cryptos, while being a digital currency but not money, are irredeemable as fiat, and, being decentralized and expandable infinitely by starting new series of coins, have the same weaknesses as fiat.

        • Lou Mannheim says:

          My understanding is that each coin has a circulation that expands as mining is conducted, however there is a fixed cap (BTC is 22MM I believe – not sure what the incentive is to maintain the ledger after that, though). I have no skin in this, I think they’re bad for business. However, the last year has me thinking there are some nasty people out there who truly want All The Monies.

        • Engin-ear says:

          Each kind of coins may have conventional or technical limitation to the total volume, but there is no obstacle whatsoever to start with much hype ByteCoin, MegabyteCoin, Bitcoin gold etc.

        • Andrew W. says:

          They are not irredeemable – it is certainly done – value being proportional to speed and inversely proportional to amount. But right now there is a window open.

    • Depth Charge says:

      Nice rant. I enjoyed it.

    • Mike smith says:

      Not often truer words are found. Refreshing. Education, government paper pushers, medical administration billing, jobs for the sake of a job. So many energy wasting endeavors.
      They crunched the numbers in 1970 on the world population growth outcome.

      • Mike R says:

        Speaking of ‘government paper pushers’, try going into a GSA office in downtown Chicago, pre-covid. 40 story office buildings, that SHOULD BE occupied with workers, were mostly vacant, and the interesting thing is that most desks would have PC’s on, and some screen active, and sweaters on backs of chairs, and stuff laying around like they were just out taking a break for a few minutes. Was it a few minutes ? Heck no it was all day, virtually every day during the week. I worked in these offices for a project that involved some conversion of HVAC to digital, and these supposed government workers were simply AWOL, while getting a phat paycheck. So several of the workers, I’d actually see over at the mall during their work hours, shopping and acting like it was their day off, but with their work clothes on.

        So I asked one of the few people in the offices there, what was going on, and asking if these desks all had actual workers that would occupy them, and/or whether they were field workers just not there that particular (though I had been in there several days a week, off and on for several months). She just kept looking at her screen, and flat out said “No, they should all be here at their desks, working.” I was stunned. This literally is YOUR FEDERAL government. They were all ‘working’ from home remote back in 2008, 2009, 2010 and so on. But ‘wink,wink’ they were not actually working, but just collecting a paycheck, and literally doing nothing for that paycheck. They weren’t even there ‘pushing paper.’ They were all basically like ‘catch me doing nothing, I dare you.’

        • NoEasyDay says:

          At least 2/3 of the jobs are diversity positions for those with maturity challenges who are otherwise unemployable in the private sector. The minority productive employees who speak out are eventually forced out under false pretenses.

    • Engin-ear says:

      Excelllent anti-office pamphlet, I read it with a lot of pleasure.

      Yet the future of WFH has nothing to do with it.

      The work organization is decided (in successful companies, at least) by the top management on cold Cost/Benefits analysis, HR being there only for legal compliance support.

      Cost/benefits are understood for the company, not for the employees.

    • Fat Chewer. says:

      That was a fine rant! Can’t stand office rubbish. I usually get someone else to talk to them.

      I would point out that robots are still far from human in their abilities. In other words, many factory jobs that require deft handling won’t be done by anyone but humans for a while yet. I would imagine that it simply isn’t possible to not have humans in a factory.

      I think employers have had big cutbacks in staff on their minds for some time now. Any information input job is really precarious since there is so much back office automation going on these days. I think the corps were just waiting for an excuse.

    • NoPrep says:

      Not everyone. But there’s a lot of truth to this rant, and I quite enjoyed it. A lot of the exec bullies are getting sullen and depressed. Metoo became a movement for a reason, after all. A lot of these mid-level and executive suite narcissists need their supply. Cute bums to pinch is where it starts. WFH takes it away from them. There could be an epidemic of suicides in the works if the old normal doesn’t return to them.

      I just wonder about Salesforce. What is on the mind of Benioff? I haven’t read much on what they are up to lately..but what does he plan to do with his towers?…keep them for appearances even as they stay 80% empty? Who is the buyer if he wants to sell? I’m quite sure I would not want to be him, even if he actually isn’t one of those narc bullies.

    • HQ says:

      Mike, that was a splendid rant. The mental health benefits of being away from toxic people and toxic buildings are immeasurable. The financial savings are gravy.

    • SuzeB says:

      @Mike R, thank you for your diatribe re: office politics and gossip. I definitely experienced the same nastiness and mean-spiritedness when I was working in healthcare both in hospital and corporate office settings. In the early 90’s, I was fortunate to find contract self-employment where I could work part-time/flexible from home and pursue my musical avocation on the side. I made some money as a musician but needed other income. As a natural introvert, I was completely content working from home where I also had the ability to practice. My social needs were met other ways and through performing as a musician.

      Dealing with “queen bees” in social groups, now that’s a different yet related topic. Humans are so darn complicated (and often quite annoying!) ;-)

    • Auldyin says:

      You would love the late David Graeber’s book “Bullsh*t Jobs”. It resolves roughly to ‘most jobs can be done in 5% of the time allocated to them, and the rest of the time is spent in all sorts of psychological people games.
      I suppose WTF might cut out all the face to face games?

  11. MCH says:

    So, eventually there is going to be some kind of reckoning. After all, as those leases end, the buildings will become just a liability. What then? A fire sale?

    I am curious to see how many offices are already tenant less, one would assume they are truly in dire straits. Can they do jingle mail? If so, at some point wouldn’t the banks be stuck with huge losses or would they try to repackage and sell off these buildings to PE firms.

    At some point, there will be a right price… but all this is just a transitory situation, right?

    • YuShan says:

      I totally expect all this redundant office space to end up on taxpayer/ central bank balance sheet at pre-Covid prices

      • BigAl says:


        Yes – or there will be *huge* increases in rents for tenants who want to retain office space.

        But, imo, you have picked the likelier outcome.

    • Old school says:

      Seems like we are worse than ever about not taking losses if you are politically connected, so I expect commercial real estate to get bailed out. I think the majority of big business leverages up because they know government will throw them a lifeline in recession.

      • MCH says:

        Which is utterly stupid because of the fact that no one went to jail in 2008 for what happened, even though there were obvious bad actors. And the bailouts and subsequent too big to fail getting even bigger sent the worst message possible. This perpetuated the current mentality.

        No…. daddy Bernake will save us, and auntie Janet, and so on. Now we have the J team, along with their cheerleaders like AOC who is committed to bailing out everyone in the name of equity and justice. All the while using it as a cover to pump money to their favorite supporters.

        This is more crock than even what Betty Crocker can hand out.

      • BigAl says:

        @Old school,

        It’s more than that.

        Ever read Vonnegut’s “Cat’s Cradle”?

        We’ve got a financial system that resembles “Ice IX”.

        If the Fed were to allow the underlying asset packaged in financial instruments to actually lose value – nobody would hold those financial instruments regardless of any other implied Fed guarantees.

        The next credit crisis will be our last.

  12. Crush the Peasants! says:

    Our strength is corruption. That is why we will defeat China.

  13. Swamp Creature says:

    I asked a top appraiser what the salvage value of a high rise office building in. What can you get for all the used toilet seats, Central AC & Heating, recycled steel etc. He laughed and said “nothing”. I don’t believe that. When old buildings here in the Swamp are looted just before demolition I noticed a lot of hardware and stuff stolen from the property and for sale on the street. Even yard plants are ripped off. That’s for old buildings. New ones should be even more valuble. Everything has value. I wonder if anybody has done a complete analysis of the value of the items and materials in these high rise buildings.

    • VintageVNvet says:

      Have done major demolition estimating and ‘hard’ bidding for years.
      Cost+ mark up of demo IS the bid, and that is just time for the machines to reduce to rubble and load trucks, and the time for the round trip of the trucks and the ”fees” at the receiving facility.
      ”Salvage” usually belongs to the successful demolition contractor bidder, and is frequently where most of the profit is, particularly when the items salvaged are worth serious money, such as the huge electric motors for the elevators, etc., etc.
      Yes, certainly, some of it is taken by the demo workers and sold asap,,, other stuff ends up at the Antique Road Show sooner and later…
      More and more ”stuff” can now be either reused as is, or with concrete, ground down into very small pieces and used for fill or pavement base, etc.

      • R Hughes says:

        Also was in comm, indus construction. Remember the salvage stuff has to find a market to be worth anything. Most is only useful for another building project. For example a 500 ton chiller has to find another building to go into or it’s just pounds of metal scrap.

        If we end up with so much excess space where will the demand be. It all comes down to cost to remove, save versus resale. That dynamic is constantly in flux.

    • Seneca’s Cliff says:

      One of my my old fraternity brothers has a family business with his brother and sister that implodes old buildings so that they fall down in to their own footprint. I am now thinking he should do an IPO as things are looking bullish for that business.

    • BigAl says:

      @Swamp Creature

      Given the absence of any domestic production to produce these items and the (eventual) unwillingness of foreign manufacturers to accept dollars for the purchase of their output…I think salvage will be a “growth enterprise” in the future.

    • Swamp Creature says:

      All over DC you see appliances and household goods for sale on sidewalks and front lawns of townhouses. They are from looted homes, where evictions have just taken place. Even under an eviction moratoriums people are being thrown onto the street and have lost not only their entire personal possessions but the appliances and the plumbing in the townhouses. The police are non-functional and have decided to look the other way when this looting is going on. This is like a third or forth world country.

  14. MiTurn says:

    I have three sons, all in their thirties and all WFH. They enjoy it, their employers are happy (although one is self-employed) and life is good. I wish I had the opportunity back in the day.

    Obviously, not for everyone, especially those that need direct supervision. And I can see where training new employees is a problem.

    Fascinating article. Get’s the mind wondering how this will play out. No one knows. Images of empty office buildings brings a song to mind:
    “Big old boxes, in the downtowns, big old boxes made of ticky tacky; big old boxes, in the downtowns, big old boxes all the same…” and empty.

  15. Edward says:

    As a business owner, I have worked from the golf course for years. When at cog hill every Thursday I would be on conference calls, and take/make calls from the cart and the green all the time. My golfing buddy would just laugh and ask how I could get away with being on the course and doing business. Once in a while I would put the speakerphone on and he would listen to the conference calls and then would comment, what a waste of time….that’s why I was Golfing at the same time, as at least I could work on my golf game while listening to some jackass go on and on about some stupid issue. Anyway, since the zekascam, my Golding buddy now is on the course 3 times a week, while working. He now comments that I was ahead of my time with WWG (working while golfing). It’s a brave new world…enjoy!

    • Swamp Creature says:

      What did the other people in your foursome have to say about your this?

      • Swamp Creature says:

        You notice no response from Edward. Because there is no adequate response.

  16. TonTon says:

    “82% of the employees who now work at home want to continue working at home at least some of the time.” While “18%” of employees who usually claim other people’s work as their own “don’t want to work at home at all.”

  17. Rosebud says:

    My theory on this thread, is that the Office space is a pyramid. The WF(anywhere) space is an inverted pyramid. Once working from anywhere became possible, the race to the bottom of the Inverted pyramid took off.

    So you’re a sweeper of the net? Perhaps a been counter, or security type? A little puzzled at 5 Trillion exploding on your laptop? This is because we hit the bottom of the Inverted pyramid recently with a rather large thump. Pressure down here being what it is, spewed belongings everywhere.

    Now fold your clothes, organize, and take out the garbage.

    • Rosebud says:

      Every country has a sweet, unique way of signalling the acceptance of the Artwork. For the daily double, What is…

    • Micheal Engel says:

      Inverted pyramids are unstable.

  18. breamrod says:

    no worries! private equity will buy them all and just let them sit empty. They’ll mark them to “model” and not to “market” and then borrow against them and buy more stuff. With an open window to the fed what could go wrong? Capitalism at it’s best! lol

  19. Micheal Engel says:

    1) JPM told their employees to come back to the office, because they
    own the office.
    2) JPM possessed many buildings in the last recession. 47 street & Madison Ave was the biggest prize.
    3) JPM cannot afford that their “campus” between Park Ave & Madison
    Ave will do nothing all day.
    4) JPM own many buildings in NYC, in which their branches filled vacant
    spaces, because there were no other takers.
    5) Empty space is a curse.

    • JPM, the number two Financial Squid on Wall Street, Goldman being number one, probably has paid off enough NYC politicians, including the Mayor, to get a special exception to counter any Covid flare-up and semi-lockdown mentalities still in power. Maybe when JPM gets back into the office, they will realize the gross miscalculation of their massive Silver Short Position. Much more than a mere hedge of their equally huge Silver Long position via physical silver. Must still be accumulating, so retail investors should take a cue from Squid Two.

  20. Rosebud says:

    The last two comments, after morning coffee, getting down to business. The posts last night: warming up in the bullpen, or hitting a few on the practise range…

    We don’t just talk about WFH, we’re doers, and show our work so our kids get it, and maybe teach Us something one day.

    Today’s work isn’t done, it moves over to a website that has the appropriate tools.

  21. Robert says:

    Since we have a desperate need for low cost housing in this country I think the obvious solution would be to convert many of these office complexes into single family housing.

    Or is this even possible?

  22. Micheal Engel says:

    6) Empty space is virus. It’s a pendulum with a positive feedback loop.
    7) Today empty office buildings, shopping centers, malls and apartment buildings, tomorrow what is left (not much), because when u buy today, in the next two three years u will spend almost half of it on a down payment, monthly FIRE department, transaction cost and home improvements that will never stop, but ==> WFH might suddenly stop with a click : your service is no longer needed.

  23. Micheal Engel says:

    Teach your kids : the worst husband is better than the best kid
    and the gov.

  24. “The work-from-home year 2020 generated record profits for banks, proving that work-from-home can be managed, and many employees question the need to commute every day.”

    The banks are basically taking income from last year that hey had put aside for covid for possible losses and are reporting it for income now. That’s good, numbers are great and under GAAP accounting this is right. But the thing is if you take JP Morgan and you take the reserve release out, their revenues were down year over year.

    • Natty, great observation. We will have another banking system collapse in the months ahead, unpaid mortgages in the $100 Billions more than dwarf Bank Equity. Forbearance allowed too long and WFH empty office towers guarantee this prediction, not to mention the compression of bank operating margins from the misguided ZIRP interest rate policies of the pikers at the Fed. Not to mention the lack of economy growing lending within our grossly distorted banking system.

      No small group of humans have done more harm to a country and its people than the U.S. Federal Reserve. Retirees can’t live on Bitcoin and Tesla speculative trading. The true cost of their elimination of price discovery in the financial markets is just around the corner.

  25. RedRaider says:

    One key question for employers regarding office space seems to be do you own or lease? I can understand if you own you’ll want to order your employees back to the office. But if you’re employees don’t want to go back then as employer you’re between a rock and a hard place. Your employee base could end up being bottom of the barrel as your good employees migrate to employers that do offer WFH .

    We seem to be experiencing out migration from states like California, Illinois and New York and in migration to states like Texas and Florida. An employer that leases instead of owns seems to have an advantage in both in and out states. But if all employers want to lease who then will own office space? Does office space become a utility regulated by local government?

    The situation becomes so complex it’s next to impossible to predict the outcome. Doesn’t adaptability become the key to success? Adaptability of both companies and states. Those companies moving to other states are proving themselves to be more adaptable. Those states leaving lockdown are proving themselves to be more adaptable. If their decisions prove to be wrong… well they will adapt to that too.

  26. Rosebud says:


  27. Lisa_Hooker says:

    WFH is an enabler. It enables:
    WWW – “working while working” a second job.
    WWWWW – “working while working while working” a third job.

    All from the comfort of your den, kitchen, patio, golf cart, &c.
    Will everyone eventually bill their time like attorneys?

    • Swamp Creature says:


      School teachers here are tutoring rich kids for southern income (Southern income is a NY term for unreported income). They are drawing full pay and benefits for their teacher’s job while working on that job approximately 1 to 2 hour per day. They have turned double dipping into triple dipping when you include unreported income. The children who they are suppose to be teaching get zero education except for those of rich families who can afford the tutoring fees, and the taxpayers get hosed and pay huge property taxes for closed schools.

  28. Mira says:

    My daughter has gone back into the office .. she said ..
    Her work time bled into her home time/private life & she felt exhausted like she was working the whole time .. she looks forward to coming home after work.

    • Swamp Creature says:

      A neighbor of mine who works for DoD DARPA says WFH sucks. He can’t stand it. Take 2 to 3 times longer to get his work, which requires a lot of collaberation, done.

  29. rick m says:

    Landlords with empty commercial property might consider converting to small individual occupancies for short leases , farming out the booking/billing to AirB&B-Work from Our Place,inc. , to corporations who need less-than-a-office, initially for overflow as the preceding office space is downsized. Later on as the preceding personnel start getting downsized too, management can more easily contain the dissenters if they aren’t physically working around each other. Much unpleasantness can be avoided. And cutbacks are coming. Corporate Regional representation will shrink from stocking locations to a small sales operation near the larger customers with scheduled purchasing, small fry will wait longer and pay dearly. In high rise offices, Punching down the new phone and data connections in the rack room is quick, steel stud framing can be altered quicker than wood and the studs themselves and even whole wall sections can be reused if you’re careful. Relatively fast to move in and work, and there’s no other use that lends itself so readily to highrise commercial RE. Entertainment venues are possible, residential tougher. Anytime you build something people sleep in these days the bureaucrats make it more expensive to sell. Especially if big and liability-prone. Being large and litigious with pull is the only defense against them. I always studied at the libraries at UT and Texas A&M, something about the setting worked for applying your attention to the course material. But I’ve known plenty of more self-disciplined people than myself who were able to work from anywhere they had to. Electricians can’t WFH, just as well, i hate office work. Some people need more supervision than others to get what they’re getting paid for out of them. Different reasons but the effect is the same. There’s valid reasons for not working from home even if it’s available without surcharge from opportunistic taxing authorities, as is the case in Germany. Or the employer expecting a return on the employee’s savings as they see them. Lots of imputed value issues coming for taxpayers, and worse for crypto players. Kinesis looks very interesting, Indonesia is part of a group of countries in a cooperative economic agreement of some kind which includes China, i think.

  30. Auldyin says:

    UK generally ditto. on all this.
    HSBC to introduce ‘Zoom-free Fridays’ to reduce stress levels for WFH staff!
    Weird exception:- British Telecom is to build a brand new 1000 staff call-centre office in central Dundee city.
    No empty alternatives, don’t think so??

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