Remote Work Causing Office Market 'Great Reset,' Putting Buildings and City Budgets at Risk
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About 30% of office buildings are nearly worthless and will likely need to be demolished due to remote work reducing office demand. This could create an "urban doom loop" of falling property values and tax revenue.
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Converting offices into residential spaces is a potential solution, but can be very expensive without government subsidies.
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The federal government has earmarked billions in low-interest loans to help fund office-to-residential conversions. Local governments are also starting to provide incentives.
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Even with subsidies, conversions can still be more expensive than just demolishing and rebuilding. Construction costs have skyrocketed.
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The commercial real estate market is undergoing a "great reset" due to remote work. The most adaptable buildings and spaces will survive, while others will fail.