After Pandemic, Shrinking Need for Office Space Could Crush Landlords

“Our prospects are doing effectively — most of them aren’t experiencing a recession,” Mr. Thomas mentioned.

Colin Connolly, the chief govt of Cousins Properties, a landlord primarily based in Atlanta, mentioned tech corporations would largely preserve their workplace area and increase in locations like Atlanta and Austin, Texas. Cousins’s 4 largest tenants are expertise corporations.

“Our view is that they aren’t making these relocation selections to make money working from home,” Mr. Connolly mentioned.

However expertise corporations’ urge for food may not be fairly as large because it was earlier. Fb and Cousins had been negotiating a lease for 353,000 sq. ft in downtown Austin, however the Austin Business Journal reported in March that Fb had backed away. The businesses declined to debate their negotiations.

“We’re dedicated to Austin, as evidenced by our over 1,200 staff who name Austin residence,” mentioned Tracy Clayton, a Fb spokesman.

Predictions of a return to workplaces have typically come up empty. A 12 months in the past, many actual property executives mentioned lockdowns can be relaxed by the summer season. A 12 months later, states have eased restrictions, and lots of People are getting vaccinated. But, on common, only a quarter of employees within the 10 largest city areas have returned to workplaces, a fee that has stayed largely the identical for months, in response to Kastle Methods, a safety firm.

The cities with the bottom return charges are on the coasts, together with New York, San Francisco and Washington, Kastle mentioned, the place lengthy commutes, typically on dysfunctional transit methods, are widespread.

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