Covid-19 is changing the office forever
Covid-19 has dealt office space its biggest blow in decades. We have seen nine years change in as many months.
In San Francisco, office space has gone from its lowest vacancy rate ever to its highest – in the same year.
Twitter, Facebook, Slack and Coinbase have all announced a move to near 100% remote working – providing cover for other companies to do this same.
Earlier this year Pinterest paid $90m to terminate their San Francisco lease. Pinterest has 88 million US users, meaning they effectively paid $1 per user to shutter their San Francisco office.
A real estate storm is brewing
Meanwhile in New York 7700 retail outlets are set to close this year at the same time as 173m square feet of office space is expected to come online. Only 59% of that has been leased.
Source: Deloitte
A storm is brewing in commercial real estate. One life-raft could be flexible office space. Google Trends show search volumes for “co-working” have held firm throughout the pandemdic.
Source: Google Trends
Real estate is the third largest source of wealth for the ultra rich. I would expect to see them move out of commercial real estate and into domestic.
Airbnb could be winners
One player could be poised to grab a large slice of the co-working pie.
Airbnb could repurpose commercial real estate. They have a demand base that is global and opportunities and supply in every work space in the world. And almost every young exec already has an Airbnb account.
They could offer flexible office space to enterprise clients that will could them from a $50bn valuation to a $100bn valuation.
Posted in: Infographic of the day