There’s a lot of talk about how big companies (more than small ones) insisted on returning to the offices after years of telecommuting. Managers talk about many causes to justify these decisions, especially they talk about productivity, that people have a lot of distractions at home (as if the office is a bunch of peace, silence and inspiration).
But there may be other causes. Or at least a lot is said: what if the interest of this massive recovery, especially on the part of large companies, had to do with the mega business surrounding the real estate sector?
In a very interesting article published in okdoomer, the writer Jessica Wildfire recalls a Major-of-the-month report that found that in the U.S. alone, business owners currently have $1.2 trillion in loans in office towers across the country.
“In some cases, it’s the same people who bought homes and drove up residential real estate prices,” he says.
Zombie office towers
Keep in mind that when the pandemic arrived, which paralyzed some markets, these owners, as the Financial Times puts it, took advantage of the Federal Reserve’s “almost free money.”To buy “trophy office buildings”“. Now that everyone is embracing remote work, they can’t rent that office space to anyone. They have a bunch of zombie office towers.
If we go further, there is the fact that between 12 and 20% of office space remains vacant. According to information shared by okdoomer, “this is worse than the recession of 2008.” If these owners can’t find a way to make money on their real estate Soon, corporate governments will start defaulting on their loans and banks will be left with gigantic office towers that they cannot sell.
According to the NPR study, “if office owners can’t repay their loans, banks will have to find new buyers, a difficult task when interest rates are high and credit tightens.”
Not just buildings, says the same report as for public transportation systems (in the US), fewer travelers and the end of pandemic-related aid are Contributing to budget deficits and massive deficits Projected.
Millionaire losses for millionaires
Last month, a report by the McKinsey Global Institute analyzed how remote and hybrid work is changing the real estate sector in the world’s largest urban centers. Your estimate: In nine global cities, remote work “is poised to eliminate up to 800,000 million of the value of the office by 2030. And that’s just the moderate projection. »
The cities he refers to are: Beijing, Houston, London, New York, Paris, Munich, San Francisco, Shanghai and Tokyo-San Francisco, which surrounds Silicon Valley would be the one that would lose the most.
As Forbes also published a few weeks ago: “The commercial real estate market could be in serious trouble.” According to a report by Morgan Stanley analysts, the commercial real estate market is expected to experience something “worse than during the Great Financial Crisis.” The “It’s a well of money for homeowners and businesses. who have invested millions of dollars in the purchase, lease and renovation of office buildings to house and attract workers.
He added: “If workers Don’t go back to the office, it could have a significant impact in companies in large cities.
The author of okdoomer is very critical and says: “Once again, the elite had a lot of gros problems. They want the rest of us to bail them out. If they don’t want our tax money, They want us to give up our freedom and autonomy“.
In Genbeta | Hybrid work prevails in the back-to-office conflict, but it’s not as flexible as its advocates say.