The Office Real Estate Apocalypse is Just Beginning

A conversation with NYU professor Arpit Gupta

Welcome back to Home Economics, a data-driven newsletter about the housing market. This week’s edition is a short conversation with an academic expert who believes work from home is here to stay, that demand for office real estate will remain depressed for years to come, and that all of this risks setting off an “urban doom loop”. If you like this post, let us know on Twitter, leave a comment, hit the heart button, or ‘reply’ to this email.

SPEED READ

Arpit Gupta is an associate professor of finance at the Stern School of Business at New York University. He also writes the excellent newsletter Arpitrage. We sat down with him last week to discuss his controversial paper, “Work From Home and the Office Real Estate Apocalypse”.

Bank stocks—from the US to Japan—are plummeting after revelations of substantial exposure to declining US commercial real estate. Our conversation about the future of this sector therefore feels especially timely.

After the break, paying subscribers can read our conversation with professor Gupta, where he explains his key views:

• Work-from-home will be one of the more durable aspects of the pandemic

• Demand for office space will continue to decline well into the future

• This decline in demand for office space risks setting off an “urban doom loop”