CRE - Massive Px. Correction ?
With major global Tech giants across countries like US / UK/ India have decided to continue about 70% of its employees working from home going forward -Big price correction is expected to hit CRE due to this disruption. Other service industries may follow tech. going forward..

Anyone having any thoughts..?
[{"id": "ftqz9n4", "text": "Asking the big questions.  I gotta assume that you're talking Office when you say CRE because you're citing WFH, which will affect all property types to various degrees, but obviously Office most.\n\nOffice guys are talking a big game right now.  Their take, and I don't directly disagree with it, is that even though work from home will become more prevalent, social distancing in the office will spread everyone out and occupancy won't take a hit.\n\nObviously it will.  We're in a recession, NBER has declared it, and it is so.  Office jobs have been pretty protected from employment losses thus far, but there will be some hits.  Macy's has office people.  Markets have slowed, people are saving more; the less money there is moving around, the less chance there is for a company or person to grab a piece of it.  That will inevitably hurt office jobs and shrink footprints.\n\nNow what I think the office guys have right is that office isn't going away.  There is a point to it, offices will return in one way or another, and if there's some cure in two years, they could even densify further, which would totally destroy that theory where social distancing bails them out.\n\nWhat I think they've got wrong is the relative productivity of buildings.  If you've got less workers in the same amount of space, the productivity that you, as a company, are assigning to office space just declined, and so you're probably less willing to pay the rents they currently have.  One of the big drivers of office space demand is having nice office space that can be used to recruit the best employees.  That includes lots of amenities like food or games, that are replicable anywhere, but others like views or ease of transportation are not.\n\nThe problem is that we just had a massive WFH experiment and a lot of workers who were not comfortable with it probably just got comfortable, and bosses too.  What I expect is that the new big amenity is not going to be a ping pong table or nap pods, or sitting on top of a metro line, but how much WFH home is allowed.  The tech companies lead the way on a lot of other amenities.  They're leading the way on this one too.\n\nAll this is to say that office is definitely going to take a hit beyond the cyclical one.  There is a secular shift coming.  Look to the equity markets for guidance.  Pure play REITs are mostly down, but some are down more than others.  Hotel and Retail are hit big, but office is pretty hard hit as well.  Less so MF, even less so Industrial.  The markets get it wrong enough that you can't take this as definite, but it is telling.\n\nThe one saving grace for office is the length of leases.  In five years you still probably won't be through the end of most leases.  If this turns out not to kneecap the office market, the values won't decline immediately.  So the market will move slowly, but forward guidance looks weak.", "replies": [{"id": "ftqzrj0", "text": "well put - totally echo yours. And yes, I meant office space the most..", "replies": [], "depth": 2}, {"id": "ful4zvx", "text": "Agree with most of this. One aspect of this I haven't heard talked about is types of office uses and how well they transfer to WFH.   People writing code seems much easier to WFH than ad agency brainstorming for new campaign, etc.   Not sure how all this shakes out but certainly lots of change coming to this market segment.", "replies": [], "depth": 2}], "depth": 1}]