Top Office Owners Don’t Want to Own Only Office Buildings Anymore
Many prominent office developers in the U.S. are shifting gears, looking to buy or build real estate that isn’t office.
The following article by Wall Street Journal editor Peter Grant appeared in the Jan. 11, 2023, print edition as ‘Top Office Owners Pivot to Housing, Other Real Estate’.
Boston Properties Inc. is planning to develop 2,000 residential units up and down the East Coast. The firm, which owns more U.S. office space than any other publicly traded company, also is developing millions of square feet of lab and life-science space.
New York office owner SL Green Realty Corp. is teaming up with Caesars Entertainment Inc. in a bid to convert a Times Square office tower into a casino.
Even the companies behind some of the world’s most glamorous skyscrapers are seeking out other types of real estate. Empire State Realty Trust, owner of the Empire State Building and other office towers, late in 2021 started adding multifamily properties to its portfolio for the first time. Silverstein Properties, best known for developing the World Trade Center in lower Manhattan, is raising a $1.5 billion fund for converting obsolete office buildings into apartments.
The efforts come as the Covid-19 pandemic and rise of remote work have reordered American habits around the workplace, dimming the importance of office towers that populate city business districts. Shares of publicly traded office owners have broadly declined as investors and analysts worry that the companies’ growth prospects have been hurt by the likelihood of a long-term decline in office demand.
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