Address not applicable: What happens to the HQ in the remote-work age?
Coinbase files for IPO as a placeless company. Will others follow?
When a company prepares to go public, it submits to the SEC a document known as the S1, which details its business, financials, risks and opportunities. On the first page is a field for the location of its headquarters. Some of these addresses have become legendary: 1600 Amphitheatre Parkway (Google); 1601 Willow Road (Facebook); 345 Park Avenue (Blackstone).
Last week, Coinbase, the biggest U.S. cryptocurrency exchange, filed its S1. In that noteworthy field, the company wrote “Address not Applicable.”
“In May 2020, we became a remote-first company,” Coinbase wrote in a footnote. “Accordingly, we do not maintain a headquarters.”
One could dismiss the move as a marketing stunt. But even so, it’s telling. One sign of a company’s status has historically been an address — Park Avenue, West 57th Street, Wall Street — that signified that a company was going places. Here, however, a company that traffics in digital assets is betting that being HQ-free is good branding. Listing no address, Coinbase thinks, is a power move.
The debate about permanent remote work is bound to be long, ugly and ultimately unsatisfying. Each week, we hear more about the benefits of remote work; Robert J. Gordon, author of the seminal “The Rise and Fall of American Growth,” told UCLA that remote work “has got to improve productivity because we’re getting the same amount of output without commuting, without office buildings.” But we also hear about the downsides, such as Zoom fatigue, loneliness, lack of connection, zero separation between work and life.
Those arguments will go on, and they will evolve. But it is clear that there are no neat lines to be drawn. It’s not as if all the tech companies are rah-rah on remote work and all the suited-and-booted financial firms are begging for a return to the office.
Salesforce declared last month that it would let employees work remotely indefinitely, while Google still maintains that employees will need to start coming in after the virus is dealt with. In banking, an interesting contrast popped up last week, with HSBC saying that 85 percent of its workers would be eligible for long-term remote work and that the bank would reduce its footprint by 40 percent, while Goldman Sachs CEO David Solomon described remote work as “an aberration” and promised to “correct it as quickly as possible.”
But even with the jury out on remote work, it’s worth questioning the viability of a central business district headquarters — the giant, show-stopping office in Grand Central, Hudson Yards, South of Market or Avenue of the Stars. While many companies remain committed to the HQ, and some, like Blackstone, are even doubling down on the concept, many companies might opt for a network of smaller offices closer to where their talent pool wants to live.
Purely residential neighborhoods in alpha cities, if zoning officials see reason, might see offices bloom, and smaller cities — no, not everyone is moving to Miami — will also benefit as knowledge workers exercise their ability to live where they wish. Real estate markets will adjust; tenants’ demand for greater flexibility has already shortened lease terms, JLL data show. And one fascinating trend within commercial brokerage hints at bigger changes ahead.
CBRE, the world’s largest commercial real estate services firm, paid $200 million last month for a 35 percent stake in co-working startup Industrious, following in the footsteps of a key rival, Newmark, which gobbled up the bankrupt Knotel.
The brokerages, whose bread-and-butter has long been securing dedicated office space for large tenants, have the pulse of the office market, and their bets say a lot about where they see things going. Companies such as Quora are already experimenting with keeping an office but reducing its prestige: CEO Adam D’Angelo pledged to be in the office no more than once a month, to ensure that it no longer serves as the company’s power base.
So maybe we should stop asking if the office is dead. A workspace distinct from where you live will remain essential, at least for quite a while. The better question might be: “Will ‘address not applicable’ become a movement?” If it does, commercial landlords will have to adapt.