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<ul class="summary-list"><li>Major office tenants have begun to rethink big leasing decisions costing tens of million of dollars as the coronavirus crisis has threatened to bring on a recession and casts uncertainty over the future of the office space. </li><li>Brown Brothers Harriman, Raymond James Financial, Freshly and other major tenants have put big leasing decisions on hold.</li><li>The pause shows how tenants could back away from prevailing trends in the office market in a post-Covid world, including the popular practice of cramming workers into open layout spaces that encourage collaboration and efficiency. </li><li>Manhattan's once-booming office leasing market has already begun to dip amid the crisis and as tenants increasingly grow hesitant to sign deals. </li><li>Some deals, such as Facebook's plans to lease 700,000 square feet at the Farley Post Office, are expected to still get done. </li><li><a href="https://www.businessinsider.com/prime" target="_blank" rel="noopener">Click here for more BI Prime stories</a>.</li></ul>Large Manhattan office tenants are starting to shelve their plans to commit to sizable blocks of space as the coronavirus pandemic has darkened the country's economic outlook and clouded the future of the workplace.Investment advisory firm Raymond James Financial put a decision to consolidate three separate locations into a new 160,000 square foot office at 320 Park Avenue on hold, two sources with direct knowledge of the deal said. A spokesman for Raymond James Financial declined to comment.Another tenant, the online grocery delivery service Freshly, cancelled plans to take as much as 100,000 square feet at 2 Park Avenue, according to two sources with direct knowledge of the deal. Freshly did not respond to a request for comment.The people familiar with the tenants said they could reconsider their decisions, reboot their searches and still initiate transactions."Just about every leasing deal that hasn't been signed yet has been unwound or put off to the side to see how things play out," said Robert Ivanhoe, who co-chairs Greenburg Traurig's real estate investment trust practice.Ivanhoe said he recently was working on a 300,000 square foot office lease for a tenant that was planning to relocate from Manhattan to Long Island City. The deal was scuttled by the crisis, he said.Read more: <a href="https://www.businessinsider.com/aby-rosen-drops-deals-totaling-600-million-amid-coronavirus-2020-4">Real-estate tycoon Aby Rosen is abandoning $600 million worth of acquisitions as the coronavirus puts New York City's multibillion-dollar sales market on ice</a>"It has been put on hold, but I'm not sure it can or will be resurrected," Ivanhoe said.The pause on dealmaking shows how businesses across the city have grown wary of making major space commitments that can cost tens of millions of dollars over the life of a lease amid the coronavirus crisis and its aftermath.<a href="https://www.businessinsider.com/coronavirus-cases-maps-us-world-spread-symptoms-death-rate-2020-1">The pandemic, which has cost over 23,500 lives</a> in the US so far and millions of jobs, could cast the economy into a recession, economists say and has spread fear about the safety of the workplace.The prospect of slower growth and further layoffs has left companies uncertain of their footprint in the near future and wary to take space now only to realize they need less of it later.The question of how much space to take has only been complicated by uncertainties over how the city's office workplace could be altered by the crisis. In recent years, tenants packed more workers into less square footage to save on real estate costs and embraced open layouts to encourage collaboration. Those practices may fall out of favor as social distancing has become the norm and workers demand more elbow room and barriers to prevent the spread of contagion.Read more: <a href="https://www.businessinsider.com/knotel-leaked-financials-2019-show-missed-targets-2020-4">Leaked Knotel financials show the WeWork competitor struggled to hit sales targets well before the coronavirus hit</a>"Tenants are focused on de-densifying their spaces," said Scott Rechler, chairman and CEO of the large commercial landlord RXR Realty. "We went to extreme densification and there's a realization now that for health and wellness we need to change that in a post-Covid world."To deal with the changes, tenants may opt to allow some portion of their workforce to continue to work remotely or split time between the office and home to reduce density. Such a policy, if adopted widely, could reduce tenant demand for space by reducing their footprint.The headwinds have not upended all deals. Facebook, for instance, is expected to complete a roughly 700,000 square foot lease for office space being developed inside the Farley Post Office west of Penn Station, according to people familiar with the deal. The effects of the crisis have, nonetheless, begun to buffet a booming office leasing market, according to recent data from the real estate services firm CBRE. About 6.1 million square feet of space was leased in Manhattan in the first quarter of the year, 35% down from the fourth quarter of 2019 and 12% below the first quarter of 2019.Do you have a personal experience with the coronavirus you'd like to share? Or a tip on how your town or community is handling the pandemic? Please email <a href="mailto:covidtips@businessinsider.com">covidtips@businessinsider.com</a> and tell us your story.Get the latest <a href="/coronavirus-business-impact">coronavirus business &amp; economic impact analysis</a> from Business Insider Intelligence on how COVID-19 is affecting industries.

Major tenants are delaying big leases in NYC as they re-think their office space needs for the post-coronavirus world

New Delhi, Office space absorption across six major cities in India fell over 50% to 27.4 million square feet in 2020, according to a <keyword id="10518151" type="UNKNOWN" weightage="20" keywordseo="savills-india-report">Savills India report</keyword>. In 2019, office space spread over 55.7 million square feet was leased. Out of the total office leases in 2020, around 57% comprised large deals of more than 1,00,000 square feet each. The report said that <keyword id="6354321" type="COMPANY" weightage="20" keywordseo="Bengaluru">Bengaluru</keyword> led the leasing activity among the major cities despite a drop of 56% compared with last year, posting maximum office absorption of 6.8 million square feet space. <keyword id="6354552" type="LOCATION" weightage="20" keywordseo="hyderabad">Hyderabad</keyword> followed closely with leasing of 5.4 million square feet in 2020. Leasing of office space in the <keyword id="6371638" type="COMPANY" weightage="20" keywordseo="national-capital-region">National Capital Region</keyword> (NCR) stood at 4.4 million square feet. Like previous year, Bengaluru, Hyderabad and NCR constituted around 61% of the total leasing activity in 2020 as well, showed the report. Savills India also pointed out that <keyword id="6358070" type="LOCATION" weightage="20" keywordseo="mumbai">Mumbai</keyword>, India's financial capital, recorded around 2.9 million square feet of leasing through the year, the least absorption witnessed among the six cities. "The overall story of 2020 is the one of survival, and most markets did exactly that. While the story of Indian office market in 2020 may not be as glorious as in 2019 and 2018, it still continues to strive and display resilience, in the face of COVID-induced slowdown," said Anurag <keyword id="108548" type="COMPANY" weightage="20" keywordseo="Mathur">Mathur</keyword>, CEO, Savills India. He noted that the fundamentals of Indian economy remain intact and strong leasing traction continues in sectors like warehousing and industrial. "Now with the coronavirus vaccine in sight and businesses poised to gain momentum, we can expect to reach pre-COVID levels soon," Mathur said. SEE ALSO: <a href="https://www.businessinsider.in/india/news/these-are-some-important-changes-in-india-from-january-1-2021-new-year/articleshow/80021085.cms">From mandatory FAStag to quarterly GST returns — these are some important changes in India from January 1</a> <a href="https://www.businessinsider.in/business/auto/news/heres-what-to-expect-from-maruti-mm-hero-bajaj-auto-and-other-automakers-in-december-month-2020-auto-sale/articleshow/80021695.cms">December auto sales estimates — Here’s what to expect from Maruti, M&amp;M, Hero, Bajaj Auto, and other automakers</a> <a href="https://www.businessinsider.in/tech/apps/news/google-is-testing-a-shortcut-feature-for-tiktok-and-instagram-videos/articleshow/80021865.cms">Google is testing a shortcut feature for TikTok and Instagram videos</a>

India office leasing in top six cities falls over 50% in 2020: Savills India

San Francisco's hot housing market could be showing signs of trouble.In a note to clients on Friday, analysts at Morgan Stanley led by Vance Edelson wrote: "The tech IPO slowdown has stoked concern that San Fran, one of the hottest real estate markets, could be ready for a pause."Specifically, Edelson and his team look at the commercial real-estate market, in which rents have risen about 70% since 2009 and demand has been robust - just 6.5% of the city's office space is vacant, a 10-year low - as the economy has bounced back and the tech sector has seen a fresh round of highly valued newcomers.Edelson and his team write:Robust demand since the Great Recession is being called into question, with a pick up in sub-leasing earlier this year, weakness in our AlphaWise survey earlier this week, and a tech IPO slowdown now in the spotlight. Office absorption indeed tracks the IPO market over time, although we see mitigating factors such as strong pre-leasing of new space, constraints on future development, and vacancy still close to historic lows.The firm includes this chart, charting the number of tech IPOs against the commercial net absorption rate, which measures the difference between office space that is newly vacated and office space that is newly occupied. <div class="KonaFilter image-container display-table"><div><div class="image">Morgan Stanley</div></div></div>And so as the pace of new tech IPOs has slowed down, so has the uptake of companies moving into offices in San Francisco. Overall, it's been a tough year for tech IPOs, particularly in the tech space, where <a href="http://www.businessinsider.com/ipo-market-material-weaknesses-2015-10">over half the companies filing documents</a> with the SEC to go public have disclosed a "material weakness."And while disclosing a material weakness merely means its possible there could be problems with a company's financials - and could be seen not as a sign that companies are in worse financial shape but are merely being more realistic about their condition - this is certainly not an out-and-out positive sign for the market. Additionally, Morgan Stanley notes in its report that this year, sub-leasing spiked to 1.4 million square feet of office space, or about 1.5% of the available stock, indicating that companies occupying huge amounts of office space were looking to supplement their leases by taking in smaller tenants. The firm notes that around 330,000 square feet of this space was due to one financial services firm leaving for another states, but the remaining 1.1 or so million square feet of sub-leases included firms like Salesforce.com, Zillow, Zynga, and Jack Dorsey's mobile payments company Square, <a href="http://www.businessinsider.com/square-files-for-ipo-2015-10">which just filed documents to go public</a>. As for the market facing problems with finding enough tenants to occupy future buildings, about 61% of the office space being built in San Francisco is pre-leased. But at around 7% of the current available office space, the amount of new space being built is considerable. And so the firm expects the market to remain "fairly balanced," but the latest survey of brokers in city is pretty clear: the market is slowing down.<div class="KonaFilter image-container display-table"><div><div class="image">Morgan Stanley</div></div></div> <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/california-researchers-predict-wildfires-san-diego-state-university-sdsu-2015-7">This technological breakthrough may change everything about how we fight wildfires</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="x3cWNndjqbGONMFlJbVgryToW2NcaWLF" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

We're seeing the first signs of trouble in San Francisco's red-hot real-estate market

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div></div></div>Snapchat has signed a 10-year lease at a 47,000-square foot office complex in Venice. The lease includes the option to extend by an additional five years. <a href="http://www.latimes.com/business/technology/la-fi-tn-snapchat-venice-20150501-story.html"> </a>"Today is Snapchat's first official day leasing the space," Jim Abbott of Realty Advisor Group, who brokered the deal for the complex's owner, told Business Insider. Snapchat <a href="http://www.businessinsider.com/snapchat-taking-over-office-space-in-venice-2015-4">had been rumored</a> to be negotiating a takeover of a <a href="http://www.loopnet.com/Listing/18781473/606-654-Venice-Blvd-1800-Abbot-Kinney-Blvd-Venice-CA/">55-unit office complex</a> at the corner of Abbot Kinney and Venice Boulevards, one of the busiest intersections in the neighborhood.Snapchat will be renovating the office buildings at the complex, called the Venice Connection and Studio Village."They're paying for some significant improvements that will raise the value of the property," Abbott said.The property owners have leased the space as a multitenant complex since 1973.According to Abbott, Snapchat had been negotiating the lease with the owners for nearly 10 months. Several other tech companies, including Uber, had also shown interest in the office space."There was some concern, since the property owners weren't familiar with Snapchat," he said. "But we really worked through the lease with them. Snapchat has been growing so much over the last 10 months that it helped to solidify them as a tenant, as a company that is keeping business in Venice."More than 30 <a href="http://la.curbed.com/archives/2015/03/snapchat_venice_leases.php">smaller businesses</a> already make their home there - including mobile advertising startup <a href="http://www.briabemobile.com/">Briabe Mobile</a>, drone and robotics company <a href="http://ctrl.me/">Ctrl.Me</a>, design agency <a href="http://clevercreative.net/">Clever Creative</a>, and several law and insurance offices.Most tenants were on a month-to-month lease, all of which will likely be terminated by the end of the summer, Abbott said."We're looking on the west side of L.A., maybe Marina del Rey. It's going to be a struggle," Briabe Mobile CEO James Briggs, whose company leases about 2,600 square feet in the complex, <a href="http://www.businessinsider.com/snapchat-taking-over-office-space-in-venice-2015-4">told Business Insider</a> earlier this month. "There are not a lot of business complexes like this in Venice, and we're completely priced out of what's left. Venice is out of the question now." Snapchat declined to comment on its real estate negotiations. A spokesperson told Business Insider, "We love being in Venice and we strive to be great neighbors within the community where we live and work."Snapchat also leases several buildings on Market Street and at the Thornton Lofts on Ocean Front Walk. It's unclear if the new office space will become Snapchat's main headquarters, or if the company views the collection of Venice offices as a broader headquarters. <div class="KonaFilter image-container display-table"><div><div class="image on-image"></div></div></div> <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/record-snapchats-without-sender-knowing-screen-shot-2015-3">It's dangerously easy to record Snapchats without the other person knowing</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="UzdDQ2dDpXqPQ1PVQbWkBa1cXz3Nz58E" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

Snapchat gobbles up big office complex near Venice Beach with 10-year lease

<ul><li>WeWork is attempting to renegotiate all of its leases for commercial office space, according to the company.</li><li>The move is designed to help the company rightsize its cost structure after years of unsustainable growth.</li><li>It's also worrying sign of deep trouble in commercial real estate as debts near maturity amid sagging property values. </li></ul>In a bid to lower costs and rightsize its business, WeWork said it is embarking on a plan to renegotiate nearly all of its leases with the owners of the buildings in which it rents space. The move is a sign of the company's ongoing distress, as it navigates the aftermath of a period of unsustainable growth, but it is also a warning sign for the broader commercial real estate industry.WeWork CEO <a href="https://www.wework.com/newsroom/a-letter-from-weworks-ceo-on-the-next-phase-of-wework" target="_blank" rel="noopener">David Tolley said in a letter on Wednesday</a> that its current lease liabilities "still remain too high and are dramatically out of step with current market conditions."Those "current market conditions" refer to a commercial real estate market that is under increasing pressure <a href="https://www.businessinsider.com/mortgage-rates-loan-interest-rates-why-fed-matters-2023-8">from higher interest rates,</a> lingering work-from-home trends, and declining commercial real estate values.As fewer employees work in offices compared to the pandemic, demand for office space has been in decline, leading to falling revenues for landlords. And as demand for office space falls, so to does the underlying value of the building itself.Dwindling demand creates an especially difficult situation for landlords that are on the verge of refinancing the debt behind their commercial real estate, given that interest rates have soared over the past year and are at multi-year highs.Refinancing debt from pre-pandemic interest rate levels of near 0% to today's rates in the mid-to-high single digits could put increasing financial pressure on commercial real estate owners and lead to further defaults.WeWork senses this widespread weakness in the commercial real estate market as an opportunity to renegotiate its leases on more favorable terms, and they could have some leverage if they threaten to walk away from the lease entirely."As part of these negotiations, we expect to exit unfit and underperforming locations and to reinvest in our strongest assets as we continuously improve our product," Tolley said in his letter.Vacancy rates in commercial office buildings has consistently ticked higher since the pandemic began in March 2020, <a href="https://www.axios.com/2023/04/13/office-vacancy-rate-remote-work-hybrid-work" target="_blank" rel="noopener">with US office vacancy rates at about 13%,</a> well above their pre-pandemic levels of about 9.5%. The hybrid work movement is also taking its toll on the commercial office real estate market, as companies consolidate their footprint or lean on co-working spaces like WeWork to facilitate in-person office meetings a few times each month. The percentage of workers who are still remote has stabilized at about 20%-25%, lower than pandemic levels but much higher than before COVID-19. <a href="https://markets.businessinsider.com/news/commodities/office-vacancy-commercial-real-estate-crash-remote-work-from-home-2023-8?_gl=1*1yzrahd*_ga*ODkwODI1NzUwLjE2MzU3Nzg0NDE.*_ga_E21CV80ZCZ*MTY5NDAyMjc1NC4xMi4xLjE2OTQwMjQ1MzMuNjAuMC4w">According to Goldman Sachs</a>, the amount of vacant office space will jump by 267 million square feet over the next decade and beyond.All of this is driving a weakening market that is leading to rising defaults and delinquency rates for commercial mortgages. The <a href="https://www.businessinsider.com/office-loan-delinquencies-commercial-real-estate-woes-interest-rates-2023-8">delinquency rate for commercial office loans hit 5% last month,</a> representing a near two-year high.A recent <a href="https://www.latimes.com/business/story/2023-08-26/commercial-real-estate-debt-default-risk" target="_blank" rel="noopener">report from Newmark Group</a> suggests about $1.2 trillion in commercial real estate debt is "potentially troubled" and at risk of defaulting. Newmark estimated that there are $303 billion of troubled loans that mature through 2025, leading to a potential wave of painful refinancings."There's going to be a reckoning, and everyone that waited to deal with the problem is going to regret they did," head of research at Newmark David Bitner said in an interview with the Los Angeles Times last month. That reckoning could ultimately play to WeWork's favor if they can secure more favorable leases, especially if workers eventually head back to the office.

WeWork says it will renegotiate nearly all of its leases - and it's another sign that commercial real estate is in trouble

New Delhi, Jan 16 () Office space leasing across India's six major cities rose by 22 per cent to record 57.7 million sq ft (gross) during 2019 on strong demand for worskspace from corporates, especially Americans, but pace of growth is likely to moderate to 7-8 per cent this year, according to global property consultant Savills.
 UK-based Savills, which is listed on London Stock Exchange and has 600 offices across 70 countries in the world with over 39,000 employees, has pegged the gross office leasing at 61-62 million sq ft in 2020 across six cities -- Bengaluru, Chennai, Hyderabad, Mumbai, National Capital Region (NCR) and Pune.
 "The commercial segment, especially, the office space market is going from strength to strength, beating its own record of 47.3 million sq ft in 2018 to set a new one at 57.7 million sq ft in 2019," Savills India CEO Anurag Mathur told reporters here.
 This growth symbolises that office space across key markets is on a strong footing, driven by India's technology sector, rise in flexible spaces, formalisation of the Indian economy and the growing offshoring by western corporations, he added.
 Of the total leasing, 40 per cent absorption was from US corporations, 30 per cent from European companies and 30 per cent from domestic entities.
 Asked about 2020 outlook, Mathur said the gross office space leasing is estimated at around 61-62 million sq ft.
 "Growth will happen. It may not happen at the same rate as 2019," he said, adding that the demand was exceptional last year.
 Shweta Sawhney, MD (Delhi-NCR), said Hyderabad saw an increase of 53 per cent in office space leasing at 9.5 million sq ft in 2019. Chennai reported 60 per cent rise in absorption of office space at 8 million sq ft.
 Office space leasing rose by 15 per cent in Bengaluru at 15.6 million sq ft, while Delhi-NCR witnessed 14 per cent growth at 10.89 million sq ft.
 In Mumbai, the gross leasing of office space grew by 11 per cent to 6.9 million sq ft. The absorption was stable in Pune at 6.8 million sq ft.
 On rentals, Sawhney said office space rent grew maximum by 18-20 per cent in Chennai. Bengaluru saw a rise of 7-10 per cent in rental, Hyderabad 8-10 per cent, Mumbai 4-5 per cent, Pune 2-4 per cent, Gurugram 3-4 per cent and Noida 0-2 per cent. In Delhi, rentals were stable.
 Major demand generators for Grade-A office spaces on pan-India scale were technology sector companies at 46.3 per cent. Banking, financial services and insurance (BFSI) leased about 10.6 per cent of the overall space and co-working segment has 14 per cent share. MJH PSK MR

Growth in office space leasing may moderate in 2020 after hitting record 58mn sq ft last yr: Savills

<ul class="summary-list"><li>As remote work remains popular, office buildings will become increasingly empty.</li><li>Goldman Sachs estimated vacant office space will jump by 267 million square feet over the next decade and beyond.</li></ul>As remote work becomes more entrenched, property markets should gear up for plummeting office demand as leases expire over the next decade. That's according to a Goldman Sachs note, which found that the share of US workers who are at home has stabilized in the 20%-25% range, below pandemic peak of 47% but well above the pre-pandemic average of 2.6%. As a result, the office space that's actually being used is about half of pre-pandemic levels. So far, that has yet to translate to big declines in office space that's rented out under a lease agreement. In the past three years, the occupancy rate has only dipped to 86% from 90%.But that is about to change as the duration of commercial leases averages 4-7 years.Goldman estimated that 17% of the office space under lease is due to expire by the end of 2024, with 11% expiring in 2025, and more than 35% after 2030.Even after assuming that further rebalancing in the labor market will reduce companies' incentives to offer work-from-home options, Goldman projected a big spike in office vacancy.<div type="image" title="Office vacancy rates amid work-from-home" height="1074" width="1850" msid="103185418" hostid="261"></div>The analysis estimated that lease expirations will pressure office vacancies up by 0.8 percentage points in 2024, 2.3 percentage points in 2025-2029, and 1.8 percentage points in 2030 and the years that follow.That means vacant office space will jump by 267 million square feet over the next decade and beyond, according to Goldman. By comparison, 49 million square feet of new office construction was completed last year.All that available space will reduce future investment in office structures by $6.4 billion in 2024 and $6 billion in the year after, the note said. The forecast comes as some high-profile companies start <a href="https://www.businessinsider.com/remote-work-rto-billionaire-ceo-threaten-fire-workers-wfh-2023-8">taking a harder line on remote work</a>. Through August, firms such as <a href="https://www.businessinsider.com/meta-rto-policy-updates-stricter-mandate-2023-8" target="_blank" rel="noopener">Meta</a> and <a href="https://www.businessinsider.com/goldman-sachs-remote-work-office-work-from-home-employment-jobs-2023-8" target="_blank" rel="noopener">Goldman Sachs</a> have issued strict return-to-office mandates with threats to track performance or even terminate employees who don't turn up in the office often enough.Even video-conferencing company Zoom, which is a key enabler of remote work, has <a href="https://www.businessinsider.com/zoom-tells-employees-return-to-office-remote-work-video-conferencing-2023-8">asked some employees to come back to the office</a> regularly.

One jarring chart shows just how empty remote work will leave office buildings

Domestic firms will <keyword id="6356112" type="General" weightage="100" keywordseo="lease" source="Orion">lease</keyword> an estimated 60-65 million square feet of <keyword id="181150" type="General" weightage="20" keywordseo="office-space" source="Orion">office space</keyword> between 2024 and 2025, according to <keyword id="20060150" type="General" weightage="20" keywordseo="cbre" source="keywords">CBRE</keyword> South Asia's report, '<keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword> Inc's Ascension - The Rise of Domestic Firms as an Office Demand Driver'. Domestic companies have been responsible for nearly 47 per cent of office leasing activity from 2022 to H1 2024, marking a departure from the traditional dominance of global corporations, particularly American firms. During 2022-2023, domestic firms experienced a 60 per cent surge in office space absorption compared to the pre-pandemic period of 2018-2019. Key occupier groups have secured significant spaces in prime locations across major cities, with <keyword id="19913115" type="General" weightage="20" keywordseo="delhi-ncr" source="keywords">Delhi-NCR</keyword> leading, followed by <keyword id="6354321" type="General" weightage="20" keywordseo="bengaluru" source="Orion">Bengaluru</keyword> and Mumbai. E-commerce and life sciences companies have driven occupancy in Bengaluru and Hyderabad, respectively, while Mumbai has captured a substantial 43 per cent share of domestic <keyword id="19910880" type="General" weightage="20" keywordseo="bfsi" source="keywords">BFSI</keyword> leasing, with strong contributions from Delhi-NCR and Chennai. The report attributes the robust growth of India's office market to several factors, including government initiatives like Make in India and the <keyword id="19952889" type="General" weightage="20" keywordseo="production-linked-incentive" source="keywords">Production Linked Incentive</keyword> (PLI) Scheme. These programs, along with increased domestic manufacturing, employment generation, and a well-capitalized banking sector, have created a supportive environment for business expansion. Other contributing factors include low corporate leverage ratios and improved access to capital, which have enhanced the investment capacity of Indian companies. India's talent pool, with approximately 2.5 million STEM graduates and a thriving start-up ecosystem featuring over 100 unicorns, has also been a major driver of growth. With over 38 sector skill councils, the government's focus on bridging the skill gap is preparing domestic firms for future demands, further bolstering the office leasing sector. Flexible space operators, technology, and BFSI sectors have emerged as the primary drivers of office leasing, collectively accounting for two-thirds of all domestic activity. The RCA sector, which includes legal, taxation, HR, and media services, is also playing a significant role in boosting domestic leasing. Additionally, Indian engineering and manufacturing firms, which currently represent 7-8 per cent of domestic office leasing, are expected to expand into <keyword id="20270212" type="General" weightage="20" keywordseo="tier-ii" source="keywords">Tier-II</keyword> and Tier-III cities, which are emerging as manufacturing hubs. Anshuman Magazine, Chairman and CEO, India, Southeast Asia, Middle East &amp; Africa, CBRE, said, "India's rapidly expanding start-up ecosystem and talent abundance are major drivers of this demand. As India's major urban centers continue to grow and diversify, the demand for premium office spaces will shape the future of the commercial real estate market, setting new standards for innovation and excellence. He added, "India's top nine cities are poised to see an impressive addition of ~185 million sq. ft. of premium office space by 2026. This dramatic increase in office space is a testament to several key factors driving the transformation of the commercial real estate landscape". Ram Chandnani, Managing Director, Advisory and Transaction Services, CBRE India, said, "Advances in technology, especially artificial intelligence (AI), are poised to further transform the office sector. While AI may cause job displacement in some areas, it will also create new opportunities and necessitate comprehensive workforce reskilling. The surge in workforce needs, driven by digitalization, evolving workplace strategies, and enhanced business confidence, has substantially boosted leasing activity."

Domestic firms to lease 60-65 million sq ft office space by 2025: CBRE report

As office rentals drop significantly in the city of San Francisco amid remote work and massive <keyword id="6357067" type="General" weightage="20" keywordseo="layoffs" source="Orion">layoffs</keyword>, <keyword id="399907" type="General" weightage="100" keywordseo="meta" source="Orion">Meta</keyword> (formerly Facebook) and <keyword id="10387" type="General" weightage="80" keywordseo="microsoft" source="Orion">Microsoft</keyword> are now vacating office buildings in <keyword id="64863" type="General" weightage="80" keywordseo="seattle" source="Orion">Seattle</keyword> and Bellevue in Washington State. The Seattle Times reported that Meta is reviewing "leases for Seattle-area office buildings." Facebook has confirmed plans to sublease its offices in downtown Seattle and in the Spring District in Bellevue. Microsoft also confirmed that it won't renew its lease at the 26-story City Center Plaza in Bellevue when that lease ends in June 2024, the report mentioned. The ongoing work-from-home and layoffs have cut into demand for office space in Seattle and other tech cities in the US. In November, Meta announced layoffs of 726 Seattle-area workers. A Meta spokesperson said that given the economic climate, it is trying to be financially prudent." The Seattle office market is now struggling "where total office vacancy now stands at around 25 per cent," according to a report by commercial real estate agency Colliers. Even non-vacant offices are often half empty, owing to remote work.A "Given the macroeconomic conditions and the hybrid work trend, we believe we'll see an uptick in office vacancy over the next couple of quarters," Connor McClain, senior vice president and leasing expert at Colliers," was quoted as saying in the report. Twitter CEO <keyword id="6355315" type="General" weightage="50" keywordseo="elon-musk" source="Orion">Elon Musk</keyword> said last week that office rentals in San Francisco will drop further. David Sacks, Co-founder and partner at Craft Ventures, tweeted that he got offered office space in San Francisco for the same price as 2009. Musk replied: "It will go lower". Twitter has also been sued for failing to pay $136,250 as rent for one of its office spaces in San Francisco, and is vacating office spaces in Singapore and India. The company's headquarters are located at 1355 Market St, where Twitter has also reportedly fallen behind on rent. Amid global recession fears, San Francisco stands to lose the most as work-from-home in the last three years of the pandemic at tech companies and expensive real estate has stalled the city's growth.

Meta, Microsoft vacating offices in Seattle amid remote work, layoffs

The demand for office spaces during the first quarter of 2024 has been strong, registering total leasing of 13.6 million square feet across the top six cities. It is a remarkable 35 per cent increase compared to the same period last year, according to professional services and investment management company Colliers. Although this is a significant drop from the record office space take-up in the last quarter of 2023, the remarkable annual increase is indicative of upbeat occupier sentiment, given the fact that the first quarter is typically slower, Colliers said in a report. Bengaluru and <keyword id="19900176" type="General" weightage="20" keywordseo="hyderabad" source="keywords">Hyderabad</keyword> emerged as frontrunners for demand of Grade A office space in the first quarter of 2024, cumulatively accounting for more than half of the <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword> leasing activity. The office market of Hyderabad saw 2.2x space uptake in Q1 2024 as compared to the corresponding quarter last year. This demand was driven by healthcare and pharma and technology sectors. Amongst other major office markets, Mumbai too experienced a notable surge in leasing activity, an impressive 90 per cent yearly rise in Q1 2024. "Hyderabad continues to strengthen its role as a prominent commercial office market in the country. The city offers occupiers including <keyword id="20942407" type="General" weightage="20" keywordseo="global-capability-centers" source="keywords">Global Capability Centers</keyword> considerable price arbitrage compared to other markets. Furthermore, proactive government policies, continuous infrastructure upgrades and a favorable business ecosystem makes Hyderabad a compelling destination for investors, occupiers, and leading developers of commercial real estate in India," said Arpit Mehrotra, Managing Director, <keyword id="21062240" type="General" weightage="20" keywordseo="office-services" source="keywords">Office services</keyword>, India, Colliers. "Within Hyderabad, the trifecta of Hi-Tec City, Gachibowli and <keyword id="19948349" type="General" weightage="20" keywordseo="madhapur" source="keywords">Madhapur</keyword> continued to drive leasing activity in Q1 2024. Of the 2.9 million square feet of Grade A space uptake in the first quarter, over 80 per cent of the demand was concentrated in these three localities," said Mehrotra. During Q1 2024, new supply across top six cities remained steady, at 9.8 million square feet, almost at par with the level seen in Q1 2023. According to Colliers, Bengaluru witnessed significant new project completions, contributing to 45 per cent of the total new supply, followed by Hyderabad at 27 per cent share. With demand outpacing supply, average rentals saw up to 8 per cent uptick on a yearly basis across most of the major markets. "As business sentiments and economic outlook remains positive, domestic occupiers, especially will continue to drive the office market of the country," said Vimal Nadar, Senior Director and Head of Research, Colliers India. SEE ALSO:<a href="https://www.businessinsider.in/tech/mobile/news/oneplus-12-review/articleshow/108723955.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/oneplus-12-review/articleshow/108723955.cms" target="_blank">OnePlus 12 review: A feature-packed device with promising battery back-up</a><a href="https://www.businessinsider.in/business/auto/news/jsw-group-and-saic-motors-jv-jsw-mg-motor-india-set-to-up-production-to-3-lakh-vehicles-a-year-with-a-new-car-every-3-6-months/articleshow/108647799.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/auto/news/jsw-group-and-saic-motors-jv-jsw-mg-motor-india-set-to-up-production-to-3-lakh-vehicles-a-year-with-a-new-car-every-3-6-months/articleshow/108647799.cms" target="_blank">JSW Group and SAIC Motor’s JV ‘JSW MG Motor India’ set to up production to 3 lakh vehicles a year with a new car every 3-6 months</a><a href="https://www.businessinsider.in/tech/news/asus-rog-strix-scar-16-review/articleshow/108514221.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/news/asus-rog-strix-scar-16-review/articleshow/108514221.cms" target="_blank">Asus ROG Strix Scar 16 review – powerful gaming laptop with a cool design</a>

Office space leasing in India off to a strong start in Q1-2024

Hollis Johnson/Business Insider<ul class="summary-list"><li>Boston Properties turned in a record performance on a key metric for the fourth quarter. But while business was good generally, one big, flashy building that has ties to WeWork has been slow to fill. </li><li>Boston Properties' Dock 72, a 675,000-square-foot WeWork-anchored Brooklyn Navy Yard office property co-owned with Rudin Management is 33% leased, flat from the third quarter of 2019. All of that is WeWork. </li><li>Business Insider spoke with analysts about their take on potential leasing challenges at the location before the fourth-quarter earnings. </li><li>In a conversation with Business Insider after the earnings call, Bill Rudin, chief executive and co-chairman of Rudin Management, said that he believes that the food hall and other amenities will draw more tenants in. </li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories</a>.</li></ul>Boston Properties turned in a record performance on a key metric for the fourth quarter. But while business was good generally, one big, flashy building that has ties to WeWork has been slow to fill. WeWork-anchored <a href="https://www.businessinsider.com/tour-of-weworks-dock-72-two-weeks-before-its-valuation-2019-9">Dock 72</a>, a 675,000-square-foot office building that's a 20 minute walk from the nearest subway entrance but with a ferry stop right at its entrance, continues to lease up more slowly than Boston Property execs expected. Earnings releases showed that Dock 72, Boston Properties' collaboration with Rudin Management in the Brooklyn Navy Yard, is only a third leased up, flat from where it was in the third quarter of 2019. Building ownership is split 50/50 between Rudin and Boston Properties. John Powers, the executive vice president of Boston Properties New York Region, said that WeWork has two thirds of its space built out and is paying rent on all of it. The more than 30,000 square feet of amenities space, originally slated to open this month, hasn't yet opened. Powers said on a call with analysts on Wednesday to discuss earnings that the amenities space will open this quarter, and could attract more potential tenants once it does so. When the <a href="https://www.businessinsider.com/tour-of-weworks-dock-72-two-weeks-before-its-valuation-2019-9">building opened last October</a>, a Rudin spokesperson told Business Insider that amenities would open later in 2019.Powers said that the rest of the leasing is "very slow," but that Boston Properties is "optimistic" about a proposal for one full-floor lease that's in process now.In a conversation with Business Insider after the earnings call, Bill Rudin, chief executive and co-chairman of Rudin Management, said that he believes that the food hall and other amenities will draw more tenants in. "We're optimistic that leasing activity will pick up in the next two quarters," Rudin said. He cited the property's high-tech amenities and its "grit" - it's stationed next to still-functioning dry docks - as assets that will attract tenants. A <a href="https://www.wsj.com/articles/brooklyn-isnt-just-for-startups-11580312319">Wall Street Journal report on Wednesday about fashion company Lafayette 148 moving to Building 77 in the Navy Yard</a> made the case that Brooklyn is attracting a wide range of companies with tax credits, accessibility to Brooklyn-based talent, and cheaper rent.Boston Properties overall had a quarterly record-high funds from operations (FFO) - a key cash-flow measure - of $1.87 a share, with FFO increasing by 11% in 2019 versus 2018.Brooklyn's ability to attract young professionals indicates that it could be a strong office market, but Dock 72 is the first ground-up office development in Brooklyn since Metrotech in the 1980s. <a href="https://www.crainsnewyork.com/real-estate/wework-leasing-stalled-navy-yard">Crain's</a> reported in early December that WeWork's coworking space was 40% leased, up only 10% from the October opening. Back on the third-quarter earnings call, Michael LaBelle, CFO of Boston Properties, said that "clearly the lease-up of this property has been slower than we expected," though he touted the amenities of the "emerging office location." "I think it's kind of a trial balloon for that market," said Jeffrey Langbaum, Senior REIT analyst at Bloomberg Intelligence in a conversation with Business Insider earlier this month. "So, setting the WeWork piece of it aside. It was going to take some convincing to get some office tenants to get there." Langbaum said that Boston Properties factored this risk into its calculations, which is likely why it worked with WeWork and Rudin on the project, but it may have underestimated the challenges of getting tenants to an unproven Brooklyn market. Langbaum said that a slow lease-up would have minimal impact on Boston Properties' financial situation, but it could be a "blip" on its reputation of success in new and challenging markets. Thomas Catherwood, director and REIT analyst at BTIG Research, said that Brooklyn is a "very early-stage office market."Boston Properties was also an early adopter of WeWork. Cofounder and former executive chairman Mort Zuckerman invested in WeWork in 2014, and Dock 72 was announced in 2015. "In my conversations with management, they (Boston Properties) really viewed them (WeWork) as a positive addition to the New York city market because they could aggregate small demand," Catherwood said.On the call to discuss fourth-quarter earnings, multiple executives also said that there is a slowdown in new leases from flex-office firms after WeWork's plans for an IPO imploded, but they continue to think that flex-office is an important addition to the portfolio.Catherwood said that the WeWork brand should help attract smaller companies that are more amenable to moving to the Brooklyn Navy Yard. Neither analyst thought that WeWork's recent challenges were much of a reputational hit for the Dock 72 property.Dock 72 houses some WeWork employees, as well as multiple floors of coworking space. Kenford Peli, CEO at entrepreneurial accounting firm the Peli Firm, brought his small company to WeWork's Dock 72 location when it opened. It was his first time working in a WeWork. Dock 72 wasn't the first WeWork location he saw, but once he saw the location, he was sold. He said the office has been filling up, and he said he sees two to three tours WeWork tours a day. "At this point, I can't see us at any other location," Peli said. Read more: <a href="https://www.businessinsider.com/we-got-a-look-at-tishman-speyers-nyc-coworking-space-2019-11">Tishman Speyer is opening its own flex offices without go-betweens like WeWork. We got a look at the landlord's new space in New York.</a>Read more:<a href="https://www.businessinsider.com/tour-of-weworks-dock-72-two-weeks-before-its-valuation-2019-9">WeWork is preparing to move into this massive, flashy Brooklyn building as its IPO plans crumble. We took a look inside.</a> <h3>NOW WATCH: <a href="https://www.businessinsider.com/ian-bremmer-shares-the-most-important-takeaways-from-davos-2020-1">Ian Bremmer reveals what business and political leaders are discussing behind closed doors in Davos</a></h3>

Leasing at Boston Properties' massive WeWork-anchored Dock 72 building in Brooklyn has stalled

<ul class="summary-list"><li>San Francisco should be a cautionary tale for cities that rely on tech firms to fill office space.</li><li>The city had an office-vacancy rate of about 19% in November, according to Commercial Edge.</li></ul>The tech exodus from San Francisco should be a warning to other cities that rely on tech companies to fill downtown office space.San Francisco's once bustling downtown has become a ghost town as companies have left their offices. The city's office-vacancy rate grew by more than 4 percentage points from November 2021 to November 2022, to about 19%, <a href="https://www.commercialedge.com/blog/national-office-report/">according to Commercial Observer</a>.The exodus also is a double-edged sword that threatens San Francisco's financial health. A <a href="https://www.nytimes.com/2022/12/17/business/economy/california-san-francisco-empty-downtown.html">New York Times report</a> published this month highlighted that local businesses like Mixt, a health-food restaurant, have struggled to maintain their business because high-income workers are no longer flocking downtown for their morning coffee or lunch salad.Mayor London Breed <a href="https://www.bloomberg.com/news/articles/2022-12-16/remote-work-hits-san-francisco-economy-as-mayor-london-breed-warns-of-deficit">has estimated</a> that falling commercial property values could contribute to a $728 million budget gap over the next two fiscal years, <a href="https://www.bloomberg.com/news/articles/2022-12-19/san-francisco-s-feeling-the-pain-of-big-tech-s-troubles-remote-work">Bloomberg reported</a>.Salesforce CEO Marc Benioff told Bloomberg that San Francisco needed "more diversity" in its economic and tax base, as well as more residential homes and cultural attractions downtown.Meanwhile, layoffs have piled up at companies like Adobe, which <a href="https://www.bloomberg.com/news/articles/2022-12-06/adobe-cuts-100-jobs-concentrated-in-sales-as-tech-tightens-belt">reportedly laid off 100 employees from its marketing department</a> in early December, and Airtable, which <a href="https://techcrunch.com/2022/12/08/airtable-layoffs/?guccounter=1">told TechCrunch on December 8</a> that it had cut 20% of its workforce. This suggests San Francisco's struggles with office vacancies may be far from over."The challenge in all of this is that we're kind of rebuilding to something that doesn't necessarily exist," Jeff Bellisario, the executive director of the Bay Area Council Economic Institute, told Bloomberg. "What does the new San Francisco look like? And I'm not sure we've totally figured that out yet."Here's a roundup of major office moves in San Francisco from 2022 that indicate how dire the situation is:<div type="image" title="Snapchat is changing its methods to track down drug dealers on its app." height="3840" width="5119" msid="96579336" hostid="261" sizebytes="1424992"></div>Snap: Snap Inc., the company that owns Snapchat, <a href="https://www.businessinsider.com/snapchat-leaves-san-francisco-office-lease-closed-during-snap-restructuring-2022-10">terminated the lease on its 33,000-square-foot office</a> in October. The company is going through a restructuring, which has included laying off more than 1,200 employees.Twitter: People close to Twitter <a href="https://www.nytimes.com/2022/12/13/technology/elon-musk-twitter-shakeup.html">told The Times this month</a> that Twitter had stopped paying rent at its headquarters at 1355 Market St. as the company, now run by Elon Musk, seeks to cut costs to improve its profitability<a href="https://www.sfchronicle.com/sf/article/Twitter-reportedly-stopped-paying-office-rent-17652373.php"></a>. <a href="https://www.nytimes.com/2022/11/18/technology/elon-musk-twitter-workers-quit.html" target="_blank" rel="noopener">The paper also reported in late November</a> that Twitter's staff dwindled from around 7,500 full-time employees to less than 3,700 since Musk took over in late October. <div type="image" title="Illustration of Meta logo seen on a phone" height="3330" width="4441" msid="96579338" hostid="261" sizebytes="465276"></div>Meta: <a href="https://www.bizjournals.com/sanjose/news/2022/12/07/meta-sublease-east-bay.html">The Silicon Valley Business Journal reported in early December</a> that Meta, the parent company of Facebook, was planning to part with its more than 430,000-square-foot office space at 181 Fremont St. despite having eight years left on its lease. Meta leases more than 1.2 million square feet of office space in the San Francisco Bay Area, and <a href="https://investor.fb.com/investor-events/event-details/2022/Q3-2022-Earnings/default.aspx">CEO Mark Zuckerberg told investors during its third-quarter earnings call</a> that it planned to spend up to $3 billion over the next two years to reduce its total office footprint by buying out leases.Block: <a href="https://www.sfchronicle.com/tech/article/Jack-Dorsey-s-Block-formerly-Square-to-leave-17242200.php">The San Francisco Chronicle reported in June</a> that Block, the payment-processing company owned by Jack Dorsey, the former CEO of Twitter, did not plan to renew its lease at the end of the year for a 470,000-square-foot office in the Mid-Market neighborhood as the company embraced working from home.Salesforce: <a href="https://www.bizjournals.com/sanfrancisco/news/2022/07/12/salesforce-sublease-san-francsico.html">The San Francisco Business Times reported in July</a> that the software behemoth Salesforce was making more than 412,000 square feet of office space in its headquarters available to sublease as the company embraced a strategy it called "<a href="https://www.salesforce.com/eu/blog/2022/09/salesforce-employee-great-place-to-work.html">Success from anywhere. Careers everywhere.</a>"Airbnb: In September, the short-term-rental giant offered to sublease more than 150,000 square feet of office space in its three-story building in San Francisco's SoMa District, <a href="https://www.bizjournals.com/sanfrancisco/news/2022/09/28/airbnb-subleases-s-f-office.html">the San Francisco Business Times reported</a>. The company also <a href="https://therealdeal.com/sanfrancisco/2022/09/28/airbnb-lists-santa-clara-campus-for-sublease/">put more than 300,000 square feet of office space up for sublease</a> in nearby Santa Clara, another Bay Area office hub.Lyft: <a href="https://www.bizjournals.com/sanfrancisco/news/2022/08/24/lyft-to-list-s-f-headquarters.html">The San Francisco Business Times reported in August</a> that the ride-hailing firm Lyft planned to let go of 250,000 square feet of office space at its Berry Street headquarters over the next year, reducing the company's total space leased in the city by more than half.<div type="image" title="Paypal logo" height="2599" width="3466" msid="96579340" hostid="261" sizebytes="148802"></div>PayPal: <a href="https://abc7news.com/paypal-closes-san-francisco-office-sf-hq-stock/11794550/">The local news outlet ABC7 reported in April</a> that the digital payments processor PayPal planned to close its Market Street office on June 3, leaving PayPal with no footprint in the city.Slack: Slack, a corporate-communications company, subleased more than 200,000 square feet of office space at 45 Fremont St. in February as it moved toward a digital-first working environment, <a href="https://www.bizjournals.com/sanfrancisco/news/2022/02/02/slack-lists-sf-office-for-sublease.html">the San Francisco Business Times reported</a>. The report said the company still held a lease at 500 Howard St., near Salesforce's headquarters.

You Searched For "office leasing market" and got 12 results

Major tenants are delaying big leases in NYC as they re-think their office space needs for the post-coronavirus world

Daniel Geiger

India office leasing in top six cities falls over 50% in 2020: Savills India

IANS

We're seeing the first signs of trouble in San Francisco's red-hot real-estate market

Myles Udland

Snapchat gobbles up big office complex near Venice Beach with 10-year lease

Madeline Stone

WeWork says it will renegotiate nearly all of its leases - and it's another sign that commercial real estate is in trouble

Matthew Fox

Growth in office space leasing may moderate in 2020 after hitting record 58mn sq ft last yr: Savills

PTI

One jarring chart shows just how empty remote work will leave office buildings

Filip De Mott

Domestic firms to lease 60-65 million sq ft office space by 2025: CBRE report

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Meta, Microsoft vacating offices in Seattle amid remote work, layoffs

IANS

Office space leasing in India off to a strong start in Q1-2024

ANI

Leasing at Boston Properties' massive WeWork-anchored Dock 72 building in Brooklyn has stalled

Alex Nicoll

9 tech companies that have ditched San Francisco offices in 2022 are a warning sign for cities to rethink their reliance on big firms

Robert Davis

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