Because of work-from-home trends, global investment in office space fell by 42% in 2022. Offices in New York are estimated to lose ~40% of their value by 2029 -- a drop of $453B.
But the picture at the top of the commercial property market is very different -- in 2022, companies signed for double the amount of high-end office space in Manhattan, compared to 2021.
The luxury trend was under way before the pandemic, but accelerated afterwards -- if a company needs space for fewer employees showing up each day, it can pay more per square foot.
Some examples: One Vanderbilt, a 93-story skyscraper with a "hall of light” observatory at its top (pictured). Or, tenants at 50 Hudson Yards, home to BlackRock and Meta, have access to a helipad that offers 5-minute rides to JFK airport "for the price of an Uber SUV."
One more cool data point from The Economist's excellent report on commercial real estate markets: "Before the pandemic, desks accounted for around 60% of office space.... Things have changed considerably. New and refurbished offices are using half that space for workstations, and raising the share dedicated to amenities from 5% to 20%."
These macro-trends are sure keeping me busy, as we help transition Splunk's real estate portfolio into the new era.
Super excited to see what the future holds for "the office"!
