A tech company with a staff of 500 workers will need 20 percent less office space now than in the past, due to layoffs and the adoption of remote work, brokerage firm CBRE projected in a new study of North America’s top 50 job markets.

Instead of its benchmark 75,000 square feet for such a company, CBRE now says 60,000 should be enough.

The reduction is the first in CBRE’s 11 years of conducting the study.

The new figure is “more closely aligned with reality” and reflects “how much space these companies are looking for” when office-hunting, Colin YasuKochi, executive director of CBRE’s Tech Insights Center, told CoStar, a real estate data service.

Amazon, Meta, and other tech giants have laid off tens of thousands of workers in the past year and virtually all now permit remote or hybrid working arrangements.

Also, the number of open jobs tech companies are posting has plunged from 900,000 in mid-2022 to just 45,000 in early 2023, CBRE said. 

The most expensive place to operate that 500-person company would be San Francisco, with an annual tab of $79 million, CBRE’s report found.

TRENDPOST: Tech companies are not alone in needing less office space.

As we have often noted, only about half of employees are in a central office on weekdays, according to security firm Kastle Systems, which monitors swipe card use in more than 2,000 office buildings in 10 major metro areas.

Attendance on Mondays is “dead” and Fridays are not much better, one executive has said.

Central offices will still be needed for crucial meetings and unusual events but “going to the office” will become more of a rare and special experience rather than a daily grind.

Our coverage of the ongoing Office Building Bust includes:


The U.S. Federal Reserve, Federal Deposit Insurance Corp., and other federal agencies involved in bank oversight have issued a 90-page guide to banks about how to restructure troubled loans for short-term workouts rather than calling them or forcing companies to default.

Regulators are urging “financial institutions to work prudently with borrowers who are, or may be, unable to meet their contractual obligations during periods of financial stress.”

Much of the guide stresses flexibility. For example, it says banks can adjust loans without booking a loss even if the loan becomes worth less than is owed, as long as the borrower has the means and is willing to repay the debt in full.

The new guidance reprises similar policies promoted in 2009 during the Great Recession when commercial real estate loans turned sour.

“It’s what the real estate industry was asking for,” John Fish, chair of the Real Estate Roundtable industry group, said to The Wall Street Journal. “This is a bridge to the other side” of the industry’s crisis.

However, there’s a fist in the velvet glove.

Since the March collapse of Signature and Silicon Valley banks, “regulators have come on very hard” with banks, pushing them to reduce their portfolios of commercial real estate loans, New York developer Scott Rechler said to The Wall Street Journal.

Before 2025, about $1 trillion worth of loans in that sector are coming due, the WSJ noted. That tees up the commercial property sector for a possible wave of delinquent and defaulting loans.

Many of those loans were made when interest rates were at their lowest and carry variable interest rates, which have been ratcheting up steadily over the past 16 months.

“There’s a ton of commercial real estate that was not priced for the rate outlook we have going forward,” Jade Rahmani, analyst at investment banking firm Keefe, Bruyette & Woods, told the WSJ.

That’s especially true for office buildings. Demand for their space has been steadily shrinking since the COVID War began and remote work became the norm, with market values of office towers now falling by double digits in many cities.

Investors bought $130.5 billion worth of commercial property this year through May, 61 percent less than a year previous, according to MSCI Real Assets data.

Not everyone is a fan of regulators’ looser policy.

Some critics have warned that if banks let doomed loans sink gradually rather than closing them sooner, the practice could bog down the larger economy, the WSJ noted.

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