A Return To A Different Kind of Office
In Bisnow February 25, 2024, ”Paul Darrah, who is the chief workplace office for Citadel which has $92.46 billion under management, said he believes that the rest of the corporate world will eventually succeed in getting employees to show up. Citadel is leaning into in-office work as the hedge fund posts double-digit returns. It is planning billion-dollar office towers in Miami and Manhattan for both its own space and to lease to other companies. “We can be more productive at home, but innovation happens in the office and I think that’s the difference,” Darrah said from the stage at the University of Miami’s Real Estate Impact Conference. “You’ll start to see more and more companies bringing people back with more policy that dictates attendance. “As an office tenant, do I need an amusement park on top of my office building?” Darrah said. “No, but it creates a sense of vibrancy and place. And that’s what people want to experience, whether it’s before work or after work. ”The 2018 purchase of Chelsea Market, which houses a large food hall, mall and office building, looks prescient today, as companies respond to the work-from-home era by leasing spaces in mixed-use neighborhoods that are meant to draw workers back to the office. That shift in office demand has left aging, commodity office towers struggling to attract tenants, pushing down building values and sending office debt delinquencies higher. “ My opinion, yes, office occupancy will go up to perhaps 70% of pre-pandemic levels, but there are employees out there who are now permanent work-from-home who will take a pay cut, change jobs, or otherwise sacrifice not to have a 2-3 hour daily commute.
