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NYU Professor Arpit Gupta On The $49B ‘Office Real Estate Apocalypse’

Bisnow’s audio series, Bisnow Reports, examines every facet of the international commercial real estate industry – from the murky future of retail and office to real estate’s reckoning with diversity to the effects of climate change on the built world, and so much more. You can subscribe to iTunes, Spotify and Amazon Music, or scroll down to listen in your browser.

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Bisnow/Miriam Hall

The view of Midtown from Brookfield’s One Manhattan West

On this episode of Bisnow Reportswe hear from Arpit Gupta, an associate professor of finance at New York University’s Stern School of Business and one of the co-authors of a research paper called “Work From Home and the Office Real Estate Apocalypse.”

The report, released over the summer and updated in the last two weeks, makes several predictions about the future of the workplace and what it could do to the value of office buildings.

“We consider two cases, one in which remote work is here to stay,” Gupta said on the podcast. “In that world, we predict that the value of office buildings in New York City could drop by as much as 60% by 2029. In our baseline scenario, we factor in the possibility that we could see that dire outcome or we could actually see people return to the office.”

Taking both a negative and positive forecast into account, the report estimates that offices will see a 39% drop in value by 2029. In all, the authors of the report estimate about $49 billion will be wiped out.

On the show, Gupta discusses how the report and its predictions have been received in the real estate and investment communities.

“It’s certainly a matter of debate what’s going to happen, there are a lot of people on the investment side who seem to agree with our conclusions,” he said. “But there are others who take the other side of that trade and hope that there is a brighter future ahead for the office.”

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