After Pandemic, Shrinking Need for Office Space Could Crush Landlords

“Our customers are doing well — most of them are not experiencing a recession,” Mr. Thomas said.

Colin Connolly, the chief executive of Cousins Properties, a landlord based in Atlanta, said tech companies would largely keep their office space and expand in places like Atlanta and Austin, Texas. Cousins’s four largest tenants are technology companies.

“Our view is that they aren’t making those relocation decisions to work from home,” Mr. Connolly said.

But technology companies’ appetite might not be quite as big as it was earlier. Facebook and Cousins had been negotiating a lease for 353,000 square feet in downtown Austin, but the Austin Business Journal reported in March that Facebook had backed away. The companies declined to discuss their negotiations.

“We are committed to Austin, as evidenced by our over 1,200 employees who call Austin home,” said Tracy Clayton, a Facebook spokesman.

Predictions of a return to offices have often come up empty. A year ago, many real estate executives said lockdowns would be relaxed by the summer. A year later, states have eased restrictions, and many Americans are getting vaccinated. Yet, on average, just a quarter of workers in the 10 biggest urban areas have returned to offices, a rate that has stayed mostly the same for months, according to Kastle Systems, a security company.

The cities with the lowest return rates are on the coasts, including New York, San Francisco and Washington, Kastle said, where long commutes, often on dysfunctional transit systems, are common.




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