Due to COVID-19 pandemic-led lockdowns and stay-at-home orders, fewer people have been going into the office. This isn’t breaking news.
But the mass adoption of remote work has prompted many companies across the country to reassess the need for real estate. When you don’t need to fill office space with employees, it’s bad business to keep paying for it. Just look to Silicon Valley, where tech companies like Facebook (FB), Twitter (TWTR), Okta (OKTA) and Box (BOX) have announced a more permanent shift to a hybrid approach, while SoundCommerce has decided to forgo renewing its current lease altogether.
Over on the east coast, the picture is becoming bleaker for the commercial real estate business. Data from the commercial real estate firm, Costar Group, shows there are 12.2 million square feet of vacant sublet space in New York City as of late January 2021, up 91% from nearly two years ago. In fact, of the total available sublease space in the city, 43% remain unoccupied altogether.
And it looks like JPMorgan Chase & Co might soon be adding to that number. According to a Bloomberg News report on Tuesday, the bank is looking to sublet big blocks of office space in Manhattan.
The bank is looking to sublet just under 700,000 square feet at 4 New York Plaza in the Financial District and more than 100,000 square feet at 5 Manhattan West in the Hudson Yards area, the report said.
“It is too early to comment on specifics as we continue to learn and adapt to this current situation and how it impacts our commercial real estate needs. We are committed to New York and are planning for the next 50 years with our new headquarters here.”
This news comes after JPMorgan CEO Jamie Dimon said the company would press ahead with its plans to build a large headquarter in New York that is scheduled to open in 2024.
But that doesn’t mean the bank needs all the space it currently occupies, which begs the question If so many major companies across the country have empty offices and remote workforces, how much more critical will companies like Zoom (ZM), Microsoft (MSFT) and more become?