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There's no precedent for a massive, long-term, region-wide decrease in office demand. Not on this scale.
I don't think it's that big of a deal. I can't say that my company is representative of all companies, but of our 250+ employees, I can think of only a handful (myself included) that work from home full-time.
If there's less demand for office space, the price per square foot will go down. If there just isn't enough demand for office space, the space will likely be adaptively reused for something else. Yes, there may be hardship for some during the transition. (bankruptcies, foreclosures, etc.) But, as the poster you're replying to has said, an equilibrium will eventually be reached. And I don't believe that will involve abandoned buildings, generally.
In many cities, where there isn't enough demand for office space, office buildings (at least the older ones) are turned into residential buildings. If the price per square foot adjusts enough, it might make sense for an adjacent college/university to utilize that space for dormitories, administrative space, or teaching space.
Your company isn't indicative of the market. There's good data on this, based on phones. It's also clear to the commercial real estate people. A massive percentage is not coming in on the average day, or even the peak day (Tues-Weds-Thurs).
The media loves the conversion idea, but they're much harder in reality due to cost as well as the unsuitability of many buildings. Commercial real estate people tend to scoff at the idea being more than a niche in most cities. If the floorplates are too wide they just don't work, because nobody is paying top dollar for residential space 40 feet from the nearest window. Basically they work mostly in old buildings with less hall-to-window distance and only if the building is dirt cheap. Buildings only get that cheap when the office market is horrible or the building is completely obsolete. Owners need to be desperate. Worse, local codes often mean little can be saved other than the structure and some of the cladding.
Colleges and universities (and museums, hotels, data centers, whatever) can use the space, but it's generally cheaper to build new than do a full gut and renovation, even if the old building is cheap.
This is why conversions are usually in rust belt cities (Cleveland, Tacoma), or cities with extreme demand to support high prices (New York), or cities where demand is cratering especially hard and buildings often have single tenants (DC), but are difficult and limited in others...particularly with 2023 prices.
There's no precedent for a massive, long-term, region-wide decrease in office demand. Not on this scale.
During the Great Depression, unemployment (which I suppose you could call "unworking from home") went as high as 25%, and in some places even into the 30's. This would have a much larger effect since it would have impacted ALL workers and also would have taken away the income they would have used to patronize businesses.
What we have now is a nothingburger by comparison. Chill out.
Your company isn't indicative of the market. There's good data on this, based on phones. It's also clear to the commercial real estate people. A massive percentage is not coming in on the average day, or even the peak day (Tues-Weds-Thurs).
The media loves the conversion idea, but they're much harder in reality due to cost as well as the unsuitability of many buildings. Commercial real estate people tend to scoff at the idea being more than a niche in most cities. If the floorplates are too wide they just don't work, because nobody is paying top dollar for residential space 40 feet from the nearest window. Basically they work mostly in old buildings with less hall-to-window distance and only if the building is dirt cheap. Buildings only get that cheap when the office market is horrible or the building is completely obsolete. Owners need to be desperate. Worse, local codes often mean little can be saved other than the structure and some of the cladding.
Colleges and universities (and museums, hotels, data centers, whatever) can use the space, but it's generally cheaper to build new than do a full gut and renovation, even if the old building is cheap.
This is why conversions are usually in rust belt cities (Cleveland, Tacoma), or cities with extreme demand to support high prices (New York), or cities where demand is cratering especially hard and buildings often have single tenants (DC), but are difficult and limited in others...particularly with 2023 prices.
Here's my report on both back-to-office trends and the prospects for office building conversions in Center City Philadelphia, which appeared in the November print issue:
During the Great Depression, unemployment (which I suppose you could call "unworking from home") went as high as 25%, and in some places even into the 30's. This would have a much larger effect since it would have impacted ALL workers and also would have taken away the income they would have used to patronize businesses.
What we have now is a nothingburger by comparison. Chill out.
In the grand scheme of things, you're right.
But this discussion focuses on a particular part of the American cityscape and the segment of the labor market that defines it. The effect on those sectors is a good bit more significant. Review the thread topic, please.
I was surprised when I read about Cleveland office buildings being converted to residential space: https://clevelandmagazine.com/in-the...tch-of-housing
That was not a thing when I worked in Cleveland in 1980. Hard to believe that 1980 is nearly 44 years ago.
During the Great Depression, unemployment (which I suppose you could call "unworking from home") went as high as 25%, and in some places even into the 30's. This would have a much larger effect since it would have impacted ALL workers and also would have taken away the income they would have used to patronize businesses.
What we have now is a nothingburger by comparison. Chill out.
And vacancies were enormous, we built very few office buildings for many years, many buildings were allowed to deteriorate and were torn down after the war or didn't return to glory until 70 years later....what's your point?
You seem fixated on office vacancy rates, as if (1) much of the discussion is about actual people, which are down vastly more than leases, and (2) the real problems with leases will come as leased space starts to really reflect how many people are in the office now that WFH is increasingly baked in.
Our WFH is now around 70% and we have tons of vacant office space and have not decided what to do with it.
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