And the reason it's just the beginning is because there's a lot of office tenants that have not had to make an active space decision yet. Stijn Van Nieuwerburgh: And this is just the beginning. Uptown at Columbia Business School, Stijn Van Nieuwerburgh, a professor of real estate, has modeled out the impact of hybrid work on pricing…and calls it a train wreck in slow motion. The reality is the price of office buildings is tanking, as much as 40% since the pandemic. Scott Rechler: This building had a lot of law firms, had some government tenants… Where IS everyone? More than 95 million square feet of New York office space currently unoccupied - the equivalent of 30 Empire State Buildings. But peek inside all this vertical real estate and there's a fundamental question. More office space than any city in the world. What is New York City without its skyline? Monuments to commerce, standing proudly shoulder-to-shoulder. We criss-crossed Manhattan, talking to players big and small, about a sector rocked to its foundations. It's enough to make you rethink the future of cities. Meanwhile interest rates have spiked to historic highs… and now the mortgage comes due: $1.5 trillion in commercial real estate loans expire in the next two years. As hybrid work hardens from trend to new normal, office occupancy rates have hit all-time lows. Two, money flowing freely in the form of loans to borrow, buy, and build. One, workers filling the buildings all week. For a century, the towers have been propped up by two pillars. economy can continue to stave off a recession? Avert your gaze from commercial real estate. Hybrid work leaves offices empty and building owners reeling | 60 Minutes 13:31
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