Facebook, Mastercard rethink office footprint

The Fortune 500 firms are latest major employers to reassess their real estate as work from home grows in appeal

National /
May.May 21, 2020 04:55 PM
Mastercard CEO Ajaypal Singh with 150 Fifth Avenue and Facebook CEO Mark Zuckerberg with Moynihan Station in New York (Getty; Google Maps)

Mastercard CEO Ajaypal Singh with 150 Fifth Avenue and Facebook CEO Mark Zuckerberg with Moynihan Station in New York (Getty; Google Maps)

Facebook and Mastercard are the latest major employers to rethink their office needs as remote work grows in appeal.

Mark Zuckerberg informed Facebook’s 45,000 workers on Thursday that the tech giant would shift toward more working from home, the Wall Street Journal reported. Over the next decade, the Facebook chief expects that nearly half of the company’s employees will no longer be working in offices.

Mastercard, too, is reassessing its physical footprint and mulling a consolidation of its operations, according to Reuters. Once social distancing measures are relaxed, some companies may see office occupancy reach only 30 percent, Mastercard’s Chief People Officer Michael Fraccaro told the outlet.

Since the coronavirus pandemic forced businesses across the U.S. to shutter, both companies’ employees have been working from home. But as employers become accustomed to remote work — and realize the potential cost savings in shrinking their office holdings — more companies have decided to do so permanently.

This month, Twitter CEO Jack Dorsey said most of its employees could work from home once the spread of the pandemic subsides. Should that trend continue, office landlords in major U.S. cities would face a reckoning.

VIDEO: Office landlords: Don’t eat before watching this

Though Mastercard owns its headquarters in Westchester, New York, it has offices across the globe — including L&L Holding’s entire 200,000-square-foot, 11-story office building at 150 Fifth Avenue in the Flatiron District.

Facebook, meanwhile, leases millions of square feet of office space across the country. Though the tech company owns much of its sprawling campus in Menlo Park, it has recently gobbled up big spaces in newly built offices on Manhattan’s West Side. Last year, it signed a lease for 1.5 million square feet across three towers at Related Companies and Oxford Properties’ Hudson Yards. At 50 and 55 Hudson Yards, the company is paying a base rent of $130 and $116 per square foot, respectively.

Plus, it’s still nearing a deal to sign a lease for 700,000 square feet at Vornado Realty Trust’s redevelopment of the Farley Post Office.

Manhattan Borough President Gale Brewer said on a recent TRD Talks Live web discussion that anxiety was growing among the city’s commercial real estate community.

“People have not only learned to work at home and enjoyed it, but guess what,” she said, “it’s going to save money for the company that is renting at a vast cost per square foot.” [WSJ, Reuters] — Danielle Balbi


Related Articles

arrow_forward_ios
Facebook CEO Mark Zuckerberg and Hudson Yards (Credit: Getty Images and Wikipedia)
Facebook close to finalizing Hudson Yards office deal: report
Facebook close to finalizing Hudson Yards office deal: report
The Centre at Purchase at 1, 2, 3, 4 Manhattanville Road with George Comfort & Sons CEO Peter Duncan (George Comfort & Sons)
Westchester office park owned by George Comfort & Sons slated for auction
Westchester office park owned by George Comfort & Sons slated for auction
250 Park Avenue and IWG CEO Mark Dixon (Google Maps, IWG)
IWG to open 58K sf co-working site on Park Ave
IWG to open 58K sf co-working site on Park Ave
Flight to quality in office real estate leaves trophy buildings the only winners
Flight to quality in office real estate leaves trophy buildings the only winners
Flight to quality in office real estate leaves trophy buildings the only winners
The hotel on Rockaway Beach sold for $25 million (Google Maps)
Pandemic pricing arrives to middle of i-sales market
Pandemic pricing arrives to middle of i-sales market
US office investment market remains well below 2019 levels
US office investment market remains well below 2019 levels
US office investment market remains well below 2019 levels
Microsoft CEO Satya Nadella and American Express CEO Stephen Squeri (Getty, American Express)
Microsoft, AmEx push back office returns
Microsoft, AmEx push back office returns
Facebook CEO Mark Zuckerberg and 770 Broadway (Getty, VNO)
Facebook still looking for space in NYC
Facebook still looking for space in NYC
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...