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

TRD NATIONAL /
May.May 22, 2020 08:00 AM
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
Groupon space at 600 W. Chicago, Groupon interim CEO Aaron Cooper (Credit: Sterling Bay and Groupon)

Groupon looks to sublet huge office space at Sterling Bay-owned building

Groupon looks to sublet huge office space at Sterling Bay-owned building
Scott Goldman and the former WMS Industries campus in Avondale

Baum Revision pays $26M for Avondale office complex

Baum Revision pays $26M for Avondale office complex
The Chicago office leasing market was strong in the first quarter of 2020, but the good times appear to be over. (Credit: Unsplash)

In the age of Coronavirus, Chicago real estate’s biggest bright spot fades

In the age of Coronavirus, Chicago real estate’s biggest bright spot fades
555 West Monroe Street (Credit: Google Maps and iStock)

PepsiCo temporarily shut down Loop office over coronavirus concerns

PepsiCo temporarily shut down Loop office over coronavirus concerns
BMO Tower at 320 S. Canal St. & Riverside’s John O’Donnell

Another law firm inks big deal at BMO Tower

Another law firm inks big deal at BMO Tower
Peter E. Ricker, Chairman and CEO of MBRE, and 800-810 West Madison Street (Credit: MBRE and Google Maps)

MB Real Estate pays $19M for office building near Fulton Market

MB Real Estate pays $19M for office building near Fulton Market
Former Takeda Campus in Deerfield, Horizon CEO and president Timothy Walbert

Irish biotech firm in contract to buy entire 70-acre Takeda campus

Irish biotech firm in contract to buy entire 70-acre Takeda campus
(Credit: iStock)

Chicago is the nation’s hottest medical office market

Chicago is the nation’s hottest medical office market
arrow_forward_ios

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

Loading...