the death of the urban office building

[DTEJD1997]

They didn’t have Zoom back then though.

 

A lot of knowledge work (marketing, accounting, finance, law, programming) can be done remotely.

 

Today's brief can easily be written remotely.  But how does a law firm develop tomorrow's partners, i.e., business generators?

 

I've seen this and been involved with it first hand...

 

Some of the more nimble & "forward thinking" law firms are "in shoring" from Boston, NYC, LA & SF to say Detroit.  Specifically, they are moving low-end, low value work to a Detroit location.  In Detroit, you've got mail, power, interweb, and most other modern amenities.  You've also got VERY cheap office space, and most importantly of all, you've got hordes of desperate attorneys who are willing to work for $20 to $25 an hour reviewing & sorting & doing basic prep work on large cases.  You've got plenty of people fresh out of law skool, desperate to bring in some money, but you've also got seasoned attorneys from firms that disbanded after GFC.  You've also got attorneys downsized from government, all types.

 

Some of these cases that get farmed out will literally have MILLIONS of documents that need to be sorted & analyzed and have grunt work done.  Perfect for the Detroit attorney!

 

Detroit is not the only place, Chicago, Charlotte, Houston, Atlanta are other hot spots.

 

The high end work still gets done in NYC, along with client meetings (most of the time), and the partners and people on partner track.  So shrink down NYC 75%, keep the high end there, but move out most everything that can be done elsewhere.

 

This has been going on for the better part of a decade though.  I think it will continue to accelerate and why not spread to other sectors of the economy?

 

what you say is accurate, but this takes it one step forward.  contract work for doc review and discovery searches are being "offshored" at cheap rates to contract attorneys hired on a deal/case basis, but this new twist would have the important work done by all attorneys be done remotely...until there is a need to meet in person over something...this is happening now due to covid and there is no reason that wont continue imo

 

yes, I forgot to mention that most work is now being done remotely.

 

I'm not sure how long that will last?  There are some clients that are NOTORIOUS about security.  Of course, it depends on the client and the firm.

 

In the past, remote work was rather rare...now it is rather common.

 

With the remote work, I would imagine you've got all sorts of potential problems, security & confidentiality being near the top of the list....then you've got technical problems....then you've got group dynamics and cohesiveness.  When I was working projects, the first few days were critical, as attorneys would discuss different theories, different things that they were seeing, and would try to act in a synchronized fashion.  Then you would have the group interfacing with the partner on conference calls.  I guess some of this could be done with dispersed work groups, but I would think that quality and efficiency would take a hit to some degree.

 

Pre-covid, there were some attorneys who were REAL germophobes.  There would always be Lysol wipes & dis-infectant.  Some of the women were really particular about this as we had shared workstations.  If those people were antsy about germs before all this happened, I can't imagine what they are like now.

 

I think we will know a lot more in a few months, if this is permanent, or if people start going back to offices.

 

with encryption, I dont see security being an issue.  management will have to be more alert though. it cant look at card reader reports anymore for associates etc leaving the office at 11pm...

 

High level encryption is certainly a must for remote legal work...but there are a myriad of OTHER security problems besides just the encryption issue.

 

One of the primary problems is potential waiver of attorney-client privilege if other people see/overhear legal matters being discussed.  For example, does the Amazon echo (other devices) waive attorney-client privilege?  What about spouse/children/significant other?

 

In a strict office setting, this can be controlled to a great degree.  With a remote worker gang, that becomes more problematic.

 

 

[Foreign Tuffett]

In my opinion this work from home thing is actually proving to me why we NEED offices.

 

You can't form relationships over Zoom. You might be able to maintain them, but you can't form them. You can't truly build trust. You can't learn by watching how someone manages their day. You can't have spontaneous discussions by the coffee machine.

 

Let me take something like Shopify as an example, and many tech firms are in this position. They are saying that in the future they will have more employees working from home. Now I've been to their office. Free food and drink, including alcohol, for everyone, all day long. Once you've given this benefit to people, it's hard to take it away. This is a "get out of jail free" card for them. A way to take away this costly benefit without the blowback from employees.

 

If you have a job you can do remotely, and choose to spend most of your time at home, you are just a step or two away from having your job outsourced to India. Get in the office. Form and strengthen relationships. Learn. Mentor. Lead.  You can't do this shit from your kitchen table on Zoom. Sorry, you just can't. Unless you have no aspiration other than to be a cog in the machine.

 

Good post.

 

Too add to what he said: Yes, obviously a great deal (most? almost all?) of white collar type work CAN be done remotely, but there are very good reasons nearly all companies have offices:

 

Hard to build and maintain a healthy company culture and camaraderie when employees rarely (or never) meet in person.

 

Tough to track what people are actually doing (or not doing) all day. The unfortunate reality is that some people will try to "skate" along doing minimal work because they feel like they are completely unsupervised. It is time consuming and costly to fire these people as they will use a myriad of excuses (like internet outages) to extend the gravy train as long as possible.

 

People working from home tend to have big problems compartmentalizing the different parts of their life since they are spending so much time at the house. This leads to a lack of structure, which leads to weird shit like younger employees sending emails late at night, middle age employees working regular office hours, older employees sending emails at 5AM. This becomes even worse when everyone is in different timezones. The end result is that people feel like they need to check email 24/7, which makes them miserable

 

You will lose extroverted employees to jobs with more traditional office environments. Some people just can't stand sitting at home day-after-day

 

Difficult to hire effectively without meeting people in person

 

Hard to build a client's trust when you haven't met them in person. This is why outside sales tends to be more effective than inside sales. I have a friend whose sales job could 100% be done over the phone/internet, but prior to COVID he was on the road all the time. Why? Because relationships matter, and are best built in person.

 

There are a myriad of other reasons as well

 

[jschembs]

In my opinion this work from home thing is actually proving to me why we NEED offices.

 

You can't form relationships over Zoom. You might be able to maintain them, but you can't form them. You can't truly build trust. You can't learn by watching how someone manages their day. You can't have spontaneous discussions by the coffee machine.

 

Let me take something like Shopify as an example, and many tech firms are in this position. They are saying that in the future they will have more employees working from home. Now I've been to their office. Free food and drink, including alcohol, for everyone, all day long. Once you've given this benefit to people, it's hard to take it away. This is a "get out of jail free" card for them. A way to take away this costly benefit without the blowback from employees.

 

If you have a job you can do remotely, and choose to spend most of your time at home, you are just a step or two away from having your job outsourced to India. Get in the office. Form and strengthen relationships. Learn. Mentor. Lead.  You can't do this shit from your kitchen table on Zoom. Sorry, you just can't. Unless you have no aspiration other than to be a cog in the machine.

 

this is a great post, but it addresses what associates and junior executives have to do...senior execs may not feel as strongly about the social/management aspects, and care more about the bottom line cost savings effect on their bonuses...

 

It's been interesting to see how COVID has adjusted my perspective on the value of face-to-face meetings.

 

For some perspective, I'm a partner at a regional M&A firm. Networking historically meant breakfasts, lunches, coffees, happy hours, larger events. I always felt a phone call didn't present nearly the same impact of a face-to-face meeting. While I agree that remains true for initial meetings and "relationship building," I've found phone calls to my existing network to be very productive and engaging - if anything, calling someone while we're both out of the office has far more intimacy.

 

Further to that point, think about the relative inefficiencies of a face-to-face meeting. Even for a quick 30-min coffee a few blocks from your office, you're likely nearly doubling that time with walk to/from, wait time for your drink, etc.

 

The takeaway for me is twofold. First, I can easily maintain networking with my existing contacts working remotely. While I'll certainly start going downtown during the summer, it's likely it'll split between in the office for more essential internal meetings, and more catch up calls at home. Second, many service firms are reevaluating their office composition, networking / marketing strategies, and as a byproduct, square footage needs.

 

I'm sure some of this is overreaction to the current environment, but I am convinced this will alter service work schedules and environments, with negative impacts on CRE. Further, the byproduct (which we're seeing in Seattle) is that retail / foodservice serving these markets will also be impacted, with resulting impact on CRE. As an example, Specialty's, a fairly entrenched breakfast/lunch/coffee chain with ~50 stores on the West Coast, closed shop last week.

 

https://www.sfgate.com/news/editorspicks/article/all-locations-of-Specialtys-close-15276064.php 

[Jurgis]

Hard to build and maintain a healthy company culture and camaraderie when employees rarely (or never) meet in person.

 

Works just fine.

 

Tough to track what people are actually doing (or not doing) all day. The unfortunate reality is that some people will try to "skate" along doing minimal work because they feel like they are completely unsupervised. It is time consuming and costly to fire these people as they will use a myriad of excuses (like internet outages) to extend the gravy train as long as possible.

 

Not sure why you are so negative about other people. I haven't seen this happen through X number of distributed teams.

 

People working from home tend to have big problems compartmentalizing the different parts of their life since they are spending so much time at the house. This leads to a lack of structure, which leads to weird shit like younger employees sending emails late at night, middle age employees working regular office hours, older employees sending emails at 5AM. This becomes even worse when everyone is in different timezones. The end result is that people feel like they need to check email 24/7, which makes them miserable

 

None of this is an issue. Yeah, sure people send emails and messages at weird times. And other people answer them when they can. It's not an issue unless you make it one. In good distributed team nobody makes it into an issue.

 

Difficult to hire effectively without meeting people in person

 

Not an issue. Actually possibly positive since hiring then is done on merits and not based on (unconscious) biases.

[rkbabang]

Hard to build and maintain a healthy company culture and camaraderie when employees rarely (or never) meet in person.

 

Works just fine. 

 

I agree.  I think I spend more time chatting and talking with my co-workers now than I did in the office.  I tended to stay at my desk for long stretches when I was working on something and not look up or talk to anyone.  Now everyone is a keyboard stroke away.

 

 

Tough to track what people are actually doing (or not doing) all day. The unfortunate reality is that some people will try to "skate" along doing minimal work because they feel like they are completely unsupervised. It is time consuming and costly to fire these people as they will use a myriad of excuses (like internet outages) to extend the gravy train as long as possible.

 

Not sure why you are so negative about other people. I haven't seen this happen through X number of distributed teams.

 

People like that will not last in the organization.  If an employee needs a babysitter, do you even want them back at the office?  You can goof off at your desk in the office as well.  People do their jobs or they don't.  No different.

 

People working from home tend to have big problems compartmentalizing the different parts of their life since they are spending so much time at the house. This leads to a lack of structure, which leads to weird shit like younger employees sending emails late at night, middle age employees working regular office hours, older employees sending emails at 5AM. This becomes even worse when everyone is in different timezones. The end result is that people feel like they need to check email 24/7, which makes them miserable

 

None of this is an issue. Yeah, sure people send emails and messages at weird times. And other people answer them when they can. It's not an issue unless you make it one. In good distributed team nobody makes it into an issue.

 

This is personal preference.  I've always had the ability to email my co-workers at 3AM from my phone and sometimes did.  I also never found it weird to come in in the morning and find that someone emailed me at 3AM and I'm checking it when I check it.  I've spent the last 2 years with 4 people on my team in China, so this is just normal for me.  I've never felt the need to check my email 24 hours a day.  You need to discipline yourself to work when your working and forget about it when your not.  The emails will be there in the morning when you start your day.

 

Difficult to hire effectively without meeting people in person

 

Not an issue. Actually possibly positive since hiring then is done on merits and not based on (unconscious) biases.

 

This definitely isn't an issue.  I've interviewed by phone/skype and it is just as effective even with hours long technical interviews.

 

I wonder if age has something to do with this.  Many are just set in their ways and eventually enough people in that age group will retire and the world will change.  Sometimes changes are like that.

 

[Guest cherzeca]

In my opinion this work from home thing is actually proving to me why we NEED offices.

 

You can't form relationships over Zoom. You might be able to maintain them, but you can't form them. You can't truly build trust. You can't learn by watching how someone manages their day. You can't have spontaneous discussions by the coffee machine.

 

Let me take something like Shopify as an example, and many tech firms are in this position. They are saying that in the future they will have more employees working from home. Now I've been to their office. Free food and drink, including alcohol, for everyone, all day long. Once you've given this benefit to people, it's hard to take it away. This is a "get out of jail free" card for them. A way to take away this costly benefit without the blowback from employees.

 

If you have a job you can do remotely, and choose to spend most of your time at home, you are just a step or two away from having your job outsourced to India. Get in the office. Form and strengthen relationships. Learn. Mentor. Lead.  You can't do this shit from your kitchen table on Zoom. Sorry, you just can't. Unless you have no aspiration other than to be a cog in the machine.

 

Good post.

 

Too add to what he said: Yes, obviously a great deal (most? almost all?) of white collar type work CAN be done remotely, but there are very good reasons nearly all companies have offices:

 

Hard to build and maintain a healthy company culture and camaraderie when employees rarely (or never) meet in person.

 

Tough to track what people are actually doing (or not doing) all day. The unfortunate reality is that some people will try to "skate" along doing minimal work because they feel like they are completely unsupervised. It is time consuming and costly to fire these people as they will use a myriad of excuses (like internet outages) to extend the gravy train as long as possible.

 

People working from home tend to have big problems compartmentalizing the different parts of their life since they are spending so much time at the house. This leads to a lack of structure, which leads to weird shit like younger employees sending emails late at night, middle age employees working regular office hours, older employees sending emails at 5AM. This becomes even worse when everyone is in different timezones. The end result is that people feel like they need to check email 24/7, which makes them miserable

 

You will lose extroverted employees to jobs with more traditional office environments. Some people just can't stand sitting at home day-after-day

 

Difficult to hire effectively without meeting people in person

 

Hard to build a client's trust when you haven't met them in person. This is why outside sales tends to be more effective than inside sales. I have a friend whose sales job could 100% be done over the phone/internet, but prior to COVID he was on the road all the time. Why? Because relationships matter, and are best built in person.

 

There are a myriad of other reasons as well

 

most "town hall" meetings of the enterprise are done remotely over video.  I dont disagree that smaller teams need to develop chemistry, but the notion that you need everyone to commute to office to build chemistry is far fetched.

 

management can track employee engagement when employees work remotely...just not a savory thing to admit though.

 

most firms hiring process was already mostly remote engagement.  yes before covid, there was usually a final face to face meeting, but that is not being done with covid, and I expect many firms wont want to go back to pre-covid days if they liked fully remote hiring during covid

 

yes you need to face to face meet clients...hence the need for conference rooms, but not huge office space

 

most employees would rather forgo a commute than forgo the warm sociability of their coworkers imo.  millennials seems to prefer virtual sociability...

[SharperDingaan]

The conversation just highlights that different functions, at different levels, are impacted differently.

It really comes down to an across-the-board 're-set' of expectations, throughout the company. Some will be able to handle the change, some will not.

 

White collar 'core hours' (CST, PST, GMT, EST, etc) are pretty meaningless, when there are no borders. The 'standard' becomes 'next working day' - and that is NOT between 9-5 'next working day'. You pay for quality task completion by day X, time Y - how it's done is to the employee. Hence the communication at weird times of day; but same outcome, productivity, etc. Just different execution.

 

Lean manufacturing has long impacted blue collar employment. WFH is just the early stages of lean manufacturing being applied to white collar employment. Good or bad, depending upon how individuals position themselves.

 

Our block-chain partnership recently let our office space 'go' - as it just wasn't worth it.

It is far more effective/efficient, for us to rent space as we need - and meet up at extended lunches within the GTA. Builds the collective EQ, does the social thing, keeps conversation focused; but requires discipline. When we need to pitch a client, rent a room close by and have them walk over. Underlines the cultural difference, and acceptable because this is 2020 - not last century, and we're tech.

 

SD

 

 

 

 

[K2SO]

...senior execs may not feel as strongly about the social/management aspects, and care more about the bottom line cost savings effect on their bonuses...

 

As a senior exec, I'm not sure I agree with that. I'm still missing the interaction with others at and above my level, and even more importantly I'm losing the ability to build a strong connection with those who report to me. Especially newer employees. And as those ties become looser, I think their ties to the organization as a whole will also fray, meaning that they will be more easily poached by competitors.

 

Other great points here about the way work from home eliminates boundaries, etc. For any arguments that it's more efficient in some ways, it is damaging in other ways. I think every business is really a number of relationships, and relationships are best built and maintained in person. And this isn't a generational thing. My kids know this... no amount of video calls, phone calls, or texts with their friends is replacing seeing them face to face.

 

[Guest cherzeca]

...senior execs may not feel as strongly about the social/management aspects, and care more about the bottom line cost savings effect on their bonuses...

 

As a senior exec, I'm not sure I agree with that. I'm still missing the interaction with others at and above my level, and even more importantly I'm losing the ability to build a strong connection with those who report to me. Especially newer employees. And as those ties become looser, I think their ties to the organization as a whole will also fray, meaning that they will be more easily poached by competitors.

 

Other great points here about the way work from home eliminates boundaries, etc. For any arguments that it's more efficient in some ways, it is damaging in other ways. I think every business is really a number of relationships, and relationships are best built and maintained in person. And this isn't a generational thing. My kids know this... no amount of video calls, phone calls, or texts with their friends is replacing seeing them face to face.

 

good post and fair enough. onboarding employees sure isn't easy if done only virtually. 

[rkbabang]

Yes, you have the break room and the watercooler.  In my office we had free coffee!  But does anyone else think it is a bit dehumanizing to spend all day everyday in a small box inside another box?  After driving through traffic to get there and then you get to drive through traffic afterwards to home when you're done? Maybe city dwellers who live inside small boxes inside of bigger boxes anyway don't see the difference, but it isn't just about work, it is a quality of life issue as well.  I guess I'm just not a city-person.  Why anyone would want to spend their lives inside a giant human anthill has never been something I've understood.

 

[Castanza]

...senior execs may not feel as strongly about the social/management aspects, and care more about the bottom line cost savings effect on their bonuses...

 

As a senior exec, I'm not sure I agree with that. I'm still missing the interaction with others at and above my level, and even more importantly I'm losing the ability to build a strong connection with those who report to me. Especially newer employees. And as those ties become looser, I think their ties to the organization as a whole will also fray, meaning that they will be more easily poached by competitors.

 

Other great points here about the way work from home eliminates boundaries, etc. For any arguments that it's more efficient in some ways, it is damaging in other ways. I think every business is really a number of relationships, and relationships are best built and maintained in person. And this isn't a generational thing. My kids know this... no amount of video calls, phone calls, or texts with their friends is replacing seeing them face to face.

 

good post and fair enough. onboarding employees sure isn't easy if done only virtually.

 

I've helped to onboard probably over 200 individuals at a high level and maybe 20 deep dive technical onboarding over Skype with a bit of a language barrier (South American countries). Sure, it took a bit more time and there were some bumps in the road. But ultimately, it was successful.

 

I don't think this argument is about whether or not remote work can be done effectively. It's about whether or not people will want to do it long term. I think short term there may be some effect. But historically speaking cities and urban centers have always been desired.

[Guest cherzeca]

"But historically speaking cities and urban centers have always been desired."

 

I guess my thought is that cities will always be desired, but perhaps more so now as a cultural and societal privilege and luxury, and less so as a locus of commerce.

[rkbabang]

"But historically speaking cities and urban centers have always been desired."

 

I guess my thought is that cities will always be desired, but perhaps more so now as a cultural and societal privilege and luxury, and less so as a locus of commerce.

 

Why have cities always been desired?  When travel and communication was more difficult and time consuming cities brought people and ideas together in one spot.  Population density was a necessity for ideas to spread and serendipitous meetings to take place.  Also it allowed an economy of scale for businesses.  All of that still happens in cities, but, I don't know if that is still entirely necessary.  People now meet and talk online just as easily as off, and with modern shipping the whole country is your marketplace.

 

[jschembs]

"But historically speaking cities and urban centers have always been desired."

 

I guess my thought is that cities will always be desired, but perhaps more so now as a cultural and societal privilege and luxury, and less so as a locus of commerce.

 

Why have cities always been desired?  When travel and communication was more difficult and time consuming cities brought people and ideas together in one spot.  Population density was a necessity for ideas to spread and serendipitous meetings to take place.  Also it allowed an economy of scale for businesses.  All of that still happens in cities, but, I don't know if that is still entirely necessary.  People now meet and talk online just as easily as off, and with modern shipping the whole country is your marketplace.

 

Very well said. Still impossible to replicate human interaction, but virtual is good enough for much of day-to-day life, and when compared against cost and livability of cities, will be very interesting to see future trends.

[Gregmal]

"But historically speaking cities and urban centers have always been desired."

 

I guess my thought is that cities will always be desired, but perhaps more so now as a cultural and societal privilege and luxury, and less so as a locus of commerce.

 

Why have cities always been desired?  When travel and communication was more difficult and time consuming cities brought people and ideas together in one spot.  Population density was a necessity for ideas to spread and serendipitous meetings to take place.  Also it allowed an economy of scale for businesses.  All of that still happens in cities, but, I don't know if that is still entirely necessary.  People now meet and talk online just as easily as off, and with modern shipping the whole country is your marketplace.

 

Cities offer lifestyles. For young, single people, having tons of other young, single people, and no shortage of things to do is quite a draw. You cant really match that anywhere else. City nightlife every night vs what? American Pie style house parties once a week? The big city offices are major draws for companies to recruit top talent.

 

Its almost a suburban right of passage in the neighborhood I grew up in to move to Hoboken or NYC for a few years after graduating college. Typically then, once that is out of the system, its back to the suburbs to start a family.

[DooDiligence]

Yes, you have the break room and the watercooler.  In my office we had free coffee!  But does anyone else think it is a bit dehumanizing to spend all day everyday in a small box inside another box?  After driving through traffic to get there and then you get to drive through traffic afterwards to home when you're done? Maybe city dwellers who live inside small boxes inside of bigger boxes anyway don't see the difference, but it isn't just about work, it is a quality of life issue as well.  I guess I'm just not a city-person.  Why anyone would want to spend their lives inside a giant human anthill has never been something I've understood.

 

www.forbes.com/sites/brendarichardson/2020/05/13/rise-in-remote-work-could-spark-a-new-suburban-boom/#337538b454a5

 

If you put a goat in a box, it'll eat it's way out.

[Castanza]

"But historically speaking cities and urban centers have always been desired."

 

I guess my thought is that cities will always be desired, but perhaps more so now as a cultural and societal privilege and luxury, and less so as a locus of commerce.

 

Why have cities always been desired?  When travel and communication was more difficult and time consuming cities brought people and ideas together in one spot.  Population density was a necessity for ideas to spread and serendipitous meetings to take place.  Also it allowed an economy of scale for businesses.  All of that still happens in cities, but, I don't know if that is still entirely necessary.  People now meet and talk online just as easily as off, and with modern shipping the whole country is your marketplace.

 

Sure, but there is also the other aspect of city living. Entertainment options. Cities are very much white collar work hard play hard. People who live in cities tend to “love the bustle”.

 

A bit off topic, but I mentioned in some thread before that all these big tech companies never build their new branches in rural or mid sized cities. Event though in my opinion that’s a step in the right direction for “revitalizing areas” it shows that there is more to big city living than big firm jobs. People (talent) for the most part want a mix of a good job in a fun area.

 

As I said before, for every 1 person looking to work full time remote in a lower cost of living area you will still have 10 wanting to claim their stake in the big city.

[Spekulatius]

"But historically speaking cities and urban centers have always been desired."

 

I guess my thought is that cities will always be desired, but perhaps more so now as a cultural and societal privilege and luxury, and less so as a locus of commerce.

 

Why have cities always been desired?  When travel and communication was more difficult and time consuming cities brought people and ideas together in one spot.  Population density was a necessity for ideas to spread and serendipitous meetings to take place.  Also it allowed an economy of scale for businesses.  All of that still happens in cities, but, I don't know if that is still entirely necessary.  People now meet and talk online just as easily as off, and with modern shipping the whole country is your marketplace.

 

Very well said. Still impossible to replicate human interaction, but virtual is good enough for much of day-to-day life, and when compared against cost and livability of cities, will be very interesting to see future trends.

 

Cities may become virtual cities. We know have online community where members can have strong bonds . That wasn’t possible historically.

[shhughes1116]

"But historically speaking cities and urban centers have always been desired."

 

I guess my thought is that cities will always be desired, but perhaps more so now as a cultural and societal privilege and luxury, and less so as a locus of commerce.

 

Why have cities always been desired?  When travel and communication was more difficult and time consuming cities brought people and ideas together in one spot.  Population density was a necessity for ideas to spread and serendipitous meetings to take place.  Also it allowed an economy of scale for businesses.  All of that still happens in cities, but, I don't know if that is still entirely necessary.  People now meet and talk online just as easily as off, and with modern shipping the whole country is your marketplace.

 

Very well said. Still impossible to replicate human interaction, but virtual is good enough for much of day-to-day life, and when compared against cost and livability of cities, will be very interesting to see future trends.

 

Cities may become virtual cities. We know have online community where members can have strong bonds . That wasn’t possible historically.

 

Am I going to go to the virtual theater?  the virtual music arena?  the virtual ballpark?  the virtual museum?  the virtual skateboard park? the virtual hospital to have virtual surgery from a top-rated cardiothoracic surgeon?  Pardon the hyperbole, but you get my point. 

 

People are drawn to cities by the availability decent-paying jobs AND amenities/attractions that are not available in rural parts of the country.  The population density of [insert ruraltown USA) does not support a good theater, decent skateboard park, large music arena that attracts big-name artists, decent museum (history, art, sports, or something else), MLB/NFL ballpark, and/or NHL/NBA arena.  it certainly doesn't support a high-end hospital with top-rated physicians either - you are lucky to have a good general surgeon and a good general practitioner in ruraltown USA's local hospital.  So the idea that people are going to leave urban office buildings, and scatter to the four corners of the earth where they can work remotely from their house is far-fetched to me. 

 

I work 1/3 of the time at home, 1/3 of the time in the office, and 1/3 of the time on the road.  I have an entire team of folks around the country, similarly situated.  If I wanted, I could work 100% from home, and could do so wherever I want in the United States.  The same goes for my team.    But over the last 10 years, I have found that it is mind-numbing to work from home every single day, and it blurs the boundaries between work life and family life.  I have also found that locating myself in rural places, even for short periods of time, is boring.  This is not unique to me.  I see this same mentality across an organization with 10,000+ people.  People are hyper focused on working remote, on getting the hell out of the office, so they can enjoy sunshine and rainbows every day from the comfort of their own house.  Yet 90-95% of the people who go off to work 100% remote end up returning to the city and our office buildings.  They either went nuts working 100% remote in their small apartment in the city, or they went nuts (in a larger apartment or house) living in a rural area without the amenities they were accustomed to enjoying. 

 

I think we are going to see a huge cohort of folks jump on the 100% work-from-home bandwagon.  I think we are going to subsequently see, in maybe a year or two, that many of these folks want to return to the office building and the city for the reasons mentioned above. 

 

I think the endgame is that most white collar workers will do 50% of their time in the office building, and 50% of their time at home.  And most of these folks won't leave the city (or will return) because they will miss the action, the amenities, and the proximity of their friends/peers.

 

 

[thepupil]

Hope everyone is well.

 

Here's an example of a fast growing, young hip, tech company with little prior NYC footprint signing a 10 year, 232,000 sq feet, replacing Skadden (super high paying) tenant who is moving to Hudson Yards.

 

TikTok wants to be in NYC.

 

TikTok has about 400 US employees, most in Culver City, Calif. Its expansion into Manhattan, where it had only a small office, is a big step forward for the company.  ByteDance is in the process of gradually moving its “center of power” away from China, Reuters reported this week.

 

#confirmationbias #potcommitted #belowPMV #youngpeoplewantogetpaidandlaidinNYC

 

Times Square has no tourists right now, but it will soon have TikTok.

 

SEE ALSO: Microsoft Expanding to 400K SF in Reston

The insanely popular video-sharing app’s parent company has signed a 10-year lease for 232,000 square feet at the Durst Organization’s One Five One, the 48-story tower formerly known as Four Times Square, Commercial Observer has learned.

 

The deal is a surprise blockbuster amidst the pandemic real estate freeze and represents a remarkable vote of confidence in the city. No sizable leases, reaching into the six digits, have been completed in Manhattan since the onset of the crisis in February, although a 740,000 square-footer is pending for Facebook at the Farley Post Office complex.

 

Although TikTok and Durst signed the lease last week, according to sources, the transaction isn’t complete until a sign-off by lenders – a technicality that’s expected to be done in a week or two. Credit won’t likely be an issue as TikTok’s parent, Beijing-based  digital conglomerate Byte Dance, has an estimated market value of $78 billion.

 

TikTok will  have seven floors – five at the tower’s top that were previously leased to Skadden Arps and two in the base that were previously for Conde Nast. The new lease leaves about 326,000 square feet of the tower’s 1.8 million square feet available.

 

Terms were not available. Asking rents for the Skadden floors ranged from $105 to $135 per square foot. The negotiations were kept under tight wraps.

 

“TikTok started looking last year,” a source said. “Their requirement grew from 50,000 square feet to a lot more. They checked out several other locations including at the World Trade Center.” 

 

TikTok was represented by CBRE’s vice chairman Sacha Zarba, executive vice president Jeffrey Fischer and vice president Alice Fair. Durst was repped in-house by executive vice president Tom Bow, senior managing director Rocco Romeo and senior leasing associate Tanya Grimaldo. The dealmakers either could not be reached or declined to comment.

 

TikTok has been downloaded more than 1.5 billion times globally and is estimated to have 60 million monthly users in the U.S. The 60-second video sharing platform has been called the “defining social media app of Generation Z” and is growing exponentially in popularity in the US despite concerns by some legislators about possible Chinese government censorship and data-sharing.  Tom Brady and Gisele Bundchen used it last week to post a funny video of themselves discussing the secrets of their marriage.

 

Appropriately for today’s “Disneyfied” Times Square, TikTok’s new CEO is former Walt Disney Company top streaming executive Kevin Mayer, who was also named ByteDance’s COO.

 

 

TikTok has about 400 US employees, most in Culver City, Calif. Its expansion into Manhattan, where it had only a small office, is a big step forward for the company.  ByteDance is in the process of gradually moving its “center of power” away from China, Reuters reported this week.

 

Durst’s game-changing tower opened in 1999 as the first of four new commercial skyscrapers at “The Crossroads of the World.” Original anchor tenant Conde Nast moved to the World Trade Center and the second-largest tenant, law firm Skadden Arps, is moving to One Manhattan West.

 

A $150 million capital improvements program – including a 46,000 amenity floor with a Charlie Palmer-curated food hall – helped lure new tenants including ICAP, BMO Capital Markets, RSM, Next, and Ampersand. Also, Nasdaq, which has its famous Market Site showroom at the corner of Seventh Avenue and West 43d Street, expanded its office space.

 

UPDATE: This story has been updated since publication to include the length of TikTok’s new lease.

[fareastwarriors]

Hope everyone is well.

 

Here's an example of a fast growing, young hip, tech company with little prior NYC footprint signing a 10 year, 232,000 sq feet, replacing Skadden (super high paying) tenant who is moving to Hudson Yards.

 

TikTok wants to be in NYC.

 

TikTok has about 400 US employees, most in Culver City, Calif. Its expansion into Manhattan, where it had only a small office, is a big step forward for the company.  ByteDance is in the process of gradually moving its “center of power” away from China, Reuters reported this week.

 

#confirmationbias #potcommitted #belowPMV #youngpeoplewantogetpaidandlaidinNYC

 

Times Square has no tourists right now, but it will soon have TikTok.

 

SEE ALSO: Microsoft Expanding to 400K SF in Reston

The insanely popular video-sharing app’s parent company has signed a 10-year lease for 232,000 square feet at the Durst Organization’s One Five One, the 48-story tower formerly known as Four Times Square, Commercial Observer has learned.

 

The deal is a surprise blockbuster amidst the pandemic real estate freeze and represents a remarkable vote of confidence in the city. No sizable leases, reaching into the six digits, have been completed in Manhattan since the onset of the crisis in February, although a 740,000 square-footer is pending for Facebook at the Farley Post Office complex.

 

Although TikTok and Durst signed the lease last week, according to sources, the transaction isn’t complete until a sign-off by lenders – a technicality that’s expected to be done in a week or two. Credit won’t likely be an issue as TikTok’s parent, Beijing-based  digital conglomerate Byte Dance, has an estimated market value of $78 billion.

 

TikTok will  have seven floors – five at the tower’s top that were previously leased to Skadden Arps and two in the base that were previously for Conde Nast. The new lease leaves about 326,000 square feet of the tower’s 1.8 million square feet available.

 

Terms were not available. Asking rents for the Skadden floors ranged from $105 to $135 per square foot. The negotiations were kept under tight wraps.

 

“TikTok started looking last year,” a source said. “Their requirement grew from 50,000 square feet to a lot more. They checked out several other locations including at the World Trade Center.” 

 

TikTok was represented by CBRE’s vice chairman Sacha Zarba, executive vice president Jeffrey Fischer and vice president Alice Fair. Durst was repped in-house by executive vice president Tom Bow, senior managing director Rocco Romeo and senior leasing associate Tanya Grimaldo. The dealmakers either could not be reached or declined to comment.

 

TikTok has been downloaded more than 1.5 billion times globally and is estimated to have 60 million monthly users in the U.S. The 60-second video sharing platform has been called the “defining social media app of Generation Z” and is growing exponentially in popularity in the US despite concerns by some legislators about possible Chinese government censorship and data-sharing.  Tom Brady and Gisele Bundchen used it last week to post a funny video of themselves discussing the secrets of their marriage.

 

Appropriately for today’s “Disneyfied” Times Square, TikTok’s new CEO is former Walt Disney Company top streaming executive Kevin Mayer, who was also named ByteDance’s COO.

 

 

TikTok has about 400 US employees, most in Culver City, Calif. Its expansion into Manhattan, where it had only a small office, is a big step forward for the company.  ByteDance is in the process of gradually moving its “center of power” away from China, Reuters reported this week.

 

Durst’s game-changing tower opened in 1999 as the first of four new commercial skyscrapers at “The Crossroads of the World.” Original anchor tenant Conde Nast moved to the World Trade Center and the second-largest tenant, law firm Skadden Arps, is moving to One Manhattan West.

 

A $150 million capital improvements program – including a 46,000 amenity floor with a Charlie Palmer-curated food hall – helped lure new tenants including ICAP, BMO Capital Markets, RSM, Next, and Ampersand. Also, Nasdaq, which has its famous Market Site showroom at the corner of Seventh Avenue and West 43d Street, expanded its office space.

 

UPDATE: This story has been updated since publication to include the length of TikTok’s new lease.

 

thepupil to the rescue of all the urban commercial real estate!

:)

[rkbabang]

Am I going to go to the virtual theater?  the virtual music arena?  the virtual ballpark?  the virtual museum?  the virtual skateboard park? the virtual hospital to have virtual surgery from a top-rated cardiothoracic surgeon?  Pardon the hyperbole, but you get my point. 

 

Sure I like to live within an hour drive of a city (I'm about an hour drive from Boston), but do you go to the theater or the hospital everyday?  Cities are nice places to visit, but I wouldn't want to live (or work) there.

 

[mcliu]

What's the impact on CRE if even 20% of people WFM (either permanent, or just taking 1 day off a week to WFH)?

 

[Guest cherzeca]

whither NYC?  I have talked to a bunch of my millennial friends/offspring of friends, and for 50% or so of them, working from home means not having to live in NYC when apt lease is up.  people thinking Atlanta, Boston...NYC has gotten something of a covid rep

 

NYC will survive, but I dont know if it will prosper

[SHDL]

I’m in DC and I did a quick search to see how the high end apartment market is doing in my area. Vacancies seem elevated ... to say the least. Nice buildings that I think used to have around 5 vacancies this time of the year now have like 20. Hard to say if this is permanent but if it is the economic impact will be huge.