Remote work destroyed even more office value than researchers thought

Last fall, researchers from New York University’s Stern School of Business and from Columbia Business School looked at the effect of remote work on the office sector. “We document large shifts in lease revenues, office occupancy, lease renewal rates, lease durations, and market rents as firms shifted to remote work in the wake of the Covid-19 pandemic,” they wrote at the time.

“We find a 32% decline in office values in 2020 and 28% in the longer-run, the latter representing a $500 billion value destruction,” they wrote.

But that was a working paper published at the National Bureau of Economic Research, which means the paper was “circulated for discussion and comment purposes” and not peer-reviewed. That is, usually these papers change over time with criticisms and suggestions from other researchers. This one certainly did. The results they found were actually worse than they originally thought, at least in percentage, though nominally in value destruction.