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Salesforce embraces remote work – office space no longer essential

One World Trade Center (Credit: Durst Organization)

Software giant Salesforce plans to consolidate and sublease certain office locations as more employees work from home –– it’s headquarters in San Francisco will not be affected. The company is analyzing global lease commitments, with the move expected to result in a write-down of between $80 – $100 million, BusinessInsider first reported.

  • Colliers International’s monthly office report: The overall Manhattan availability rate in November was 13.5 percent, slightly higher than the previous month’s rate and the highest number recorded since 2003. In total, 790,000 SF of office space was leased in November, down by nearly 80 percent compared to a year ago and down by 55 percent from October.
  • Concerning levels: Manhattan’s available sublease space rose to 17.28 million SF, or 24.3 percent of total availability. During the Great Recession, the sublet inventory share peaked at 27 percent, and during the 2001 recession, it hit a high of 42 percent, TRD noted.
  • Be Smart: PWC’s Byron Carlock told BI about a recent change to accounting rules that prohibits a company from amortizing the loss from a sublease annually over the life of the lease. Now tenants have to take the full write-down of the loss they expect to incur from the subleased space up front. [BusinessInsider+TRD]

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