As more organizations encourage workers to work remotely on a long-term or permanent basis, their office needs are changing.
This could significantly impact the CRE sector, especially if companies begin to reduce their real estate footprints and office requirements. And it seems that this could be the path many companies take moving forward.
A recent KPMG report found that 68% of CEOs have plans to lower their workplace footprint. As a result, the CRE sector could face some strains on occupancy and rents over the next few years. Experts believe this will most likely impact CBD markets like New York City, San Francisco, and Boston.
While discouraging, this does not mean that lease activity will dry up entirely. Various lease deals have been reported over the past couple of months, and many have stated that the office is far from dead.