Speaking of “Post Post Corona”, one sector hit especially hard during the pandemic was the office real estate market. Prior to the pandemic, real estate has usually been seen as a safe investment and offered the advantages of being an inflation hedge, providing rental income and capital appreciation.
To many owners of office properties, it may not feel very “safe” now. The technology for millions to work at home had been available long before Covid struck, but the pandemic turned a possibility into a necessity and millions of workers don’t want to come back and consequently many employers and building owners are sitting on top of a lot of empty real estate.
A series of posts on LinkedIn, “Office landlords are giving up,” captures what’s happening in office real estate due to work from home and other factors. One article warns: “The likelihood is that hundreds, perhaps thousands of these properties will wind up in the hands of creditors who, frankly, will be equally clueless as to what to do with them…There is one hope for legacy CBD (central business district) office space, namely the adaptive reuse of these properties for other individual or multiple uses. This kind of redevelopment requires special skills and experience that is hard to find. It also requires owners of these properties to get real about values so that new projects can begin.”
