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Tech giants expand their commercial real estate holdings

With many people working from home due to the COVID-19 pandemic, commercial real estate has fallen into decline as companies shy away from acquiring more office space.

But that’s not so in the case of big technology firms, which have emerged as major tenants and acquirers of offices, data centers, warehouses and retail stores during the pandemic.

“This is maybe the best opportunity that ever existed in the real estate industry,” Roy March, CEO of Eastdil Secured LLC, a real estate investment bank, told the Wall Street Journal. “I don’t think we’ve ever had this kind of demand that’s being driven out of a sector since the invention of the internal combustion engine.”

Numerous big tech firms, including Amazon, Facebook, Apple, Google parent company Alphabet Inc., and Microsoft Corp., have been prompted by discounts in the commercial real estate market to expand their holdings, the Journal said. Combined, those companies now occupy around 589 million square foot of U.S. real estate, according to data from CoStar Group.

Those five firms have expanded their real estate holdings by more than a quarter this year, the fastest rate in over a decade. The expansion comes at a time when most other industries have retreated from property transactions as there are big question marks over how offices will be used post-pandemic.

But U.S. tech firms are apparently bullish about the prospects of people returning to the office once the pandemic ends.

“We believe that post-pandemic, we will ultimately return to doing a majority of our work in the office,” John Schoettler, Amazon’s vice president of global real estate and facilities, told the Journal. “We believe that much of the best work that we do is done in the office, where employees can come together, work together to solve problems, and be collaborative.”

Mike Wheatley

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at mike@realtybiznews.com.

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