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.
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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