The typical employee takes up 125 and 225 usable square feet of space in an office. If we assume that 30 million people work in offices today in the United States, (roughly 20% of total employees) that translates into about 4 billion square feet. Just imagine the impact on the economy if 20 percent of those workers started working from home and their companies shed their office space. 800 million square feet of space would become vacant. Office costs vary greatly across the United States, but if we assume that the highest cost offices would be the first to be downsized, it would be reasonable to use a rental cost of $30 per year. That translates into $24 billion in lower office rents in the U.S. on an annual basis. If half the office workers went virtual, it would come to $60 billion in lost rents per year.
According to IBIS World, the total U.S. commercial real estate market (including retail space) is $1.2 trillion per year. Therefore, the remote work trend could deliver a blow of between 2% and 5% to total industry revenues. Compare this to an industry that has been growing over the past decade, and it does not constitute good news for landlords or investors. Add in an equally dismal outlook for retail commercial space and a residential sector hit by virus-induced poverty and it does not look positive for real estate as an asset class.
Random stuff I find interesting and you may not.
