Business landlords have decided their tenants are not coming back. Some have started to leave the buildings where they rent to these tenants completely. These renters have given up on the idea that companies renting from them will never return. Companies that own these tenantless buildings have started to hand them over to mortgage holders, which have no use for them at all. (Click here to see why small education businesses are struggling the most to pay rent.)
Cities have a growing number of commercial buildings that could be called ghost buildings. Like blighted areas in residential sections of cities, no one shows up, ever. There was some idea that empty office buildings could be turned into residential buildings. In most cases, this is expensive, and there is no guarantee that people who want apartments will come.
The bad situation is permanent. Parts of America’s downtowns and business centers cannot rebound.
There is nothing like the current state of empty buildings. This problem did not exist at this scale during the Great Recession.
Work-from-home lifestyles have become so popular that companies have had to fight to get people back. The most recent example of this is Amazon. Management said it expected workers to return. The decision caused a revolt. Amazon has to decide if it wants to lose some of these people, likely including some valuable employees, or stick to its new rules and let these people go. Hundreds of companies face the same dilemma.
The American office building has changed forever. So have the financials of people who have owned them.
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