Office landlords, beware: More of corporate America is looking to reduce space

An analysis of earnings calls found that 25 big companies are planning to shed offices

TRD New York /
Jul.July 23, 2020 02:30 PM
An analysis found that more than 25 large companies across different sectors are planning to downsize their office footprint (iStock)

An analysis found that more than 25 large companies across different sectors are planning to downsize their office footprint (iStock)

It’s not just tech firms. Corporate America is looking to trim office space as companies shift to remote work and look to reduce costs.

An analysis of quarterly earnings calls by Reuters found that more than 25 large companies across different sectors are planning to downsize their office footprint, posing a threat to office landlords’ bottom lines.

Ronald Philip O’Hanley, CEO of financial services company State Street, said on his company’s earnings call last week that observers “should expect and hold us to a much lower footprint really starting quite soon.”

Regions Financial Corp. said it was “confident overall office square footage will continue to decline.”

After the pandemic triggered state shutdowns in March, workers across the country transitioned to working from home, which many companies have reported to be a largely positive experience.

Though some in the real estate industry have questioned how longlasting the shift will be, in recent months, Twitter, Facebook and Mastercard have all announced permanent moves toward remote work.

A recent survey showed that 40 percent of bank executives planned to cut back on real estate holdings.

In June, Morgan Stanley forecasted that remote work will increase vacancy rates in office buildings going forward. Vacancy rates are expected to reach 10 to 12 percent in New York in the next two to five years — up from 8.7 percent now. [Reuters] — Sylvia Varnham O’Regan


Related Articles

arrow_forward_ios
John Bardis, Carlos Lopez-Cantera, and the office (Credit: Google Maps)

Medical co-working space operator buys Miami medical campus

Medical co-working space operator buys Miami medical campus
The Palm Beach Gardens office towers

DiVosta family sells Palm Beach Gardens office towers for $80M

DiVosta family sells Palm Beach Gardens office towers for $80M
From left: Steve Bisciotti, Jim Davis with  Jim and John Arrigo, with 5901 Madison Avenue, Tamarac and 2250 North State Road 7, Margate (Getty, Arrigo Auto Group, Google Maps)

Investment firm tied to Baltimore Ravens owner buys South Florida car dealerships for $61M

Investment firm tied to Baltimore Ravens owner buys South Florida car dealerships for $61M
Florida Gov. Ron DeSantis (Credit: Joe Raedle/Getty Images)

DeSantis says restaurants in Florida can operate at up to 100% capacity

DeSantis says restaurants in Florida can operate at up to 100% capacity
Peter Vauthy and Red South Beach (Getty)

The Weekly Dish: Red South Beach signs $5M lease for new space & more

The Weekly Dish: Red South Beach signs $5M lease for new space & more
Miami-Dade County Mayor Carlos A. Gimenez (Credit: Jason Koerner/Getty Images)

Miami-Dade police said pre-Covid evictions could resume. Then came mayor’s stop order

Miami-Dade police said pre-Covid evictions could resume. Then came mayor’s stop order
119 Washington Avenue Miami Beach

South Beach office building inks lease for record $92 psf

South Beach office building inks lease for record $92 psf
Miami-Dade County Mayor Carlos A. Gimenez (Credit: Jason Koerner/Getty Images)

Miami-Dade begins phase 2 reopening: movie theaters, bowling alleys and more

Miami-Dade begins phase 2 reopening: movie theaters, bowling alleys and more
arrow_forward_ios

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

Loading...