FAANG companies — Facebook, Apple, Amazon, Netflix, Google, i.e. a generic reference to “apex tech” — are bullish on buying up office real estate, especially in NYC. To wit:
- Google dropped $2.1 billion on office real estate. NYC is now their second-largest employee area behind CA.
- Facebook leased up a ton of office space by Penn Station.
- Amazon’s playing da game, too.
1.6 million square feet: That’s how much Big Tech’s real estate footprint in New York City has expanded since the beginning of 2020. Amazon, Apple, and Facebook have all bought or leased large swathes of office space in the city this year, much of it during the pandemic, per the New York Times. That’s not even counting the 1.7 million square feet that Google announced it would be adding to its office space in the city last December.
And that article is from October 2020 — almost a full year ago. The land grab has only gotten bigger since.
Now, it’s semi-obvious why tech companies would do this. There’s a few notable reasons:
- Good talent base
- Close to Wall Street and financial firms
- Some execs want to live there or justify having homes there
- It’s cool to say you own Penn Station
- NYC still has panache, even if people flee it in droves
But what matters here, narrative-wise, is that a lot of companies look to Big Tech to figure out what they are supposed to do. Big Tech commands a ton of our attention, from daily phone usage to business journalism to management theory to heated hot take debates. If it looks like FAANG companies are doubling down on commercial real estate and in-person work — and it sure does seem that way, since only 13.4% of office workers worked remotely last month — then other companies will follow suit.
In other words, if FAANG is about the office, your company might end up about the office. And then all these breathless narratives about hybrid and remote will go up in relative smoke by Q2 2022.
Keep an eye on it.
Ted, great insights, as always. Clearly Big Tech knows something the rest of us don’t. Or they simply see a great opportunity to BUY when everyone else says SELL.
Companies are run by executives, and executives are motivated by wielding and expanding their power. Commanding labor flatters that objective. Commanding workers via a Teams session does not.
This is why the “remote worker revolution” is a marketing farce, instead of an “evolution” of working. So long as executives derive personal meaning from having power, workers will be going to offices. /end dialogue.