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JUNE 20, 2022
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REAL ESTATE
Tech turmoil spills into commercial real estate BY AARON ELSTEIN
W
hen tech-friendly real estate brokerage Compass last Tuesday said it would lay off 450 employees and wind down a software subsidiary, the company also disclosed a review of rent expenses “with a view to consolidating offices and reducing related costs.”
NEWSPAPER
VOL. 38, NO. 24
The news sent shivers up the spines of commercial landlords who have come to rely heavily on tech tenants to fill their buildings. Tech represented 22% of all office leasing last year, up from 17% in 2020, according to CBRE. In New York, high-tech jobs grew by 18% during 2019 and 2020, the highest rate in the country after Seattle, CBRE found. Now that the tide has reversed, tech leasing
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Expansion on hold That could leave Manhattan office landlords high and dry. The sector accounts for 20% of tenants at Boston Properties and 17% at Empire State
Realty Trust, SL Green Realty and Vornado Realty Trust, respectively, according to BMO. That exposure explains the techlike losses in the landlords’ share prices. Boston Properties’ stock, down 32% from itshigh heading into last Wednesday, has See TECH on page 50
SPOTLIGHT
BUILDING A FASHION HOUSE PIECE BY PIECE PAGE 51
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is “headed for a significant slowdown,” John Kim of BMO Capital Markets said in a recent report.
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