A View of the Challenges Facing the Office Market from a Different Perspective

Although remote work has been frequently publicized as the primary driver fueling stalled office leasing, at least one landlord has taken on a different perspective and blaming the economy instead. Despite news of “the U.S. economy shattering growth expectations with record-low unemployment and surging gross domestic product,” Boston Properties, one of the nation’s largest office landlords, contends that “the rosy economic picture is misleading as it does not accurately reflect the market tone and operating environment” for many of the company’s clients, further pointing out that “strengthened GDP growth, for example has been consumption related, and a majority of the recent job growth has been in the leisure, hospitality, healthcare and government sectors, ‘not in the office-using sectors such as information and financial services.’” Boston Properties CEO Owen Thomas believes that although remote work isn’t helping, it’s “difficult for users to reduce space if all employees are expected in the office on specific days of the week;” but “in the face of inflation, rising capital costs and increased priority for profitability, large employers across the country are putting their real estate expansions on the back burner until the economic uncertainty begins to clear.”

Source:    https://product.costar.com/home/news/995427419