The pandemic spurred work-from-home era is decimating the office sector, with rising vacancy rates and declining property values. And a set of researchers that previously estimated the effect of remote work on office property values, have revised their assessment, seemingly suggesting things are worse off than they thought.
In a paper published last year, researchers from New York University and Columbia University estimated a 28% decline in New York City office values by 2029, totaling to a $49 billion loss. And in their model, that equates to a $500 billion “value destruction,” nationwide. The researchers—Arpit Gupta, Vrinda Mittal, and Stijn Van Nieuwerburgh—revised their estimate this month in the latest version of their paper, titled: “Work From Home and the Office Real Estate Apocalypse.” They now see a 44% decline in New York City office values by 2029, and a nationwide value destruction, as they put it, of $506 billion in just a three-year period from 2019 to 2022.
