Reducing Corporate America's real-estate footprint
A Reuters analysis of quarterly earnings calls over the past week revealed more than 25 large U.S. companies planned to downsize their office space in the year ahead, moves designed to reduce the second-largest expense after payrolls at corporations.
Reductions in office spending could likely be followed by layoffs and investments in technology that should help improve productivity, said Bill McMahon, chief investment officer of active equity strategies at Charles Schwab.
While companies tend to cut back on their real estate needs during typical recessions, the last four months of economic lockdown have shown many workers can remain productive at home, said Danny Ismail, an analyst at independent research firm Green Street Advisors. As a result, the cutbacks that companies are making are more likely to be permanent, he added.
