2y ago

Hybrid-work trend may wipe out $800 billion from office property values by 2030, McKinsey study says

www.reuters.com

A shift to remote working is likely to wipe off $800 billion from the value of office buildings in major global cities by 2030, according to a study published by consulting firm McKinsey on Thursday.

15 comments

Oh NO!! Anyway, I hope we can save several landmark venues where amazing bands play instead of tearing them down for a new mega structure.

But they totes need us to show back up because communication or performance or something.

And nothing of actual value will be lost.
- Do you have a pension, as a lot of pension funds are tied up in this kind of stuff. Not that I personally would ever go back to full time office work, but things have knock on effects.
  
  If their asset managers are clued in they will divest before it becomes a problem.
  
  Who the hell still has pensions? I'd fucking love a pension fund. Everyone's tied to much worse stock portfolio individual retirement plans

Good. Property values are a necessary evil in our economic system to allocate finite amounts of land. Unlike say the value of a company that makes things, which reflects the utility gained from it's products, property values mostly represent scarcity, falling property values therefore indicates that we have partially mitigated that scarcity.

Good. Convert 'em into cheap housing instead.

I'm used to there being a "but..." at the end of headlines like these. Where's the bad news?

Turn all that space into something useful instead of concrete.
- Using existing buildings for apartments would be great for the housing markets. For example, a building that used to be used for a TV broadcasting company in SF was turned into pretty nice apartments at relatively reasonable prices. Much better use for the buildings than empty offices.
  
  Don't know about the US, but in the UK the loopholes for conversations result in some pretty naff flats with tiny windows and little ventilation. Still, for temp housing for the homeless or refugees awaiting asylum or the like it could work.
  
  It's not as easy as it first seems. You have to think about what is usually included in an apartment (toilets, sinks, showers, ovens, stovetops, windows, garbage chutes etc) and realise that many of those items will need significant building renovations. Most office suites don't have bathrooms (there will be one large bathroom in the middle of the building), so separate bathrooms will need to be built for each apartment. No one wants to live in an apartment without windows, so the only parts of the building used for residential will be on the edges of the floor.
  It's not impossible - but it would require an upfront investment that would then demand a higher price for the property.

Good.

15 comments