Office landlords are bracing themselves for a recession that appears all but inevitable.
Building owners have struggled to bounce back from the grips of the pandemic that sent billions of workers to operate from their homes — and now many are not interested in returning.
As more companies embrace remote and hybrid work, office owners are left scrambling to identify new strategies that could entice a return. However, eye-catching amenities are not enough, leaving many landlords plagued with high vacancy rates.
According to the Wall Street Journal, an index that follows the shares of publicly traded office owners fell by 29% during the first two quarters of 2022.
Not only are businesses more willing to adopt hybrid work policies, but many are doing their own recession doomsday prep by conducting mass layoffs. Less workers means an even smaller need for office space, indicating a grim future of office owners.
Rising interest rates have also become a problem, as increased interest can force property values to fall. In fact, analysis from a team at New York University has forecasted that the city’s office stock will fall 28% ($49 billion) by 2029.