In light of the surge of Omicron, a large number of companies, across all sectors, have pushed back their return-to-office plans. After enduring a nearly two-year pandemic, it would seem that business executives would give up on telling people to return to an office setting.

Goldman Sachs, the top-tier investment bank and one of the biggest proponents of ordering its well-paid, white-collar professionals to return to work, just announced that it is pushing back its plans once again—this time to Feb. 1.

Going counter to the remote and hybrid-workplace trend, Google announced Friday that it would purchase a London office building for $1 billion. At first, it seems surprising to spend so much money when there is an overhang of real estate, as businesses are scaling down their holdings. A significant percentage of people want to work remotely and say that they’ll quit if they are forced to stop working from home. It’s not an idle threat, as around 4 million workers have been quitting their jobs almost each month lately.

Its purchase is in addition to another $1 billion that Google is estimated to have spent on the construction of an “11-story, one-million-square-foot building less…that looks like a horizontal skyscraper and will have a rooftop garden and running track.” Back in September 2021, Forbes reported that the search giant bought the St. John’s Terminal building in Manhattan’s Hudson Square for $2.1 billion.

In a Google company blog post at the time, Ruth Porat, Alphabet and Google CFO, wrote, “Google has been fortunate to call New York City home for more than 20 years, during which time we have grown to 12,000 employees. New York’s vitality, creativity and world-class talent are what keep us rooted here. It is why we’re announcing today that we are deepening our commitment to New York and intend to purchase the St. John’s Terminal in Manhattan for $2.1 billion, which will serve as the anchor of our new Hudson Square campus.”

Porat pointed to the purchase as an enhancement to a “more flexible hybrid approach to work,” which will facilitate employees “coming together in person to collaborate and build community.” The CFO added, “Our decision to exercise our option to purchase St. John’s Terminal further builds upon our existing plans to invest more than $250 million this year in our New York campus presence. It is also an important part of meeting our previously announced racial equity commitments, which include continuing to grow our workforce in diverse communities, like New York.”

Previously, Alphabet proposed constructing a large company-town project in Mountain View, California. The tech behemoth will build a combination of houses, retail stores, parks and recreations and a corporate campus spanning 40 acres. Google’s vision, called the “Middlefield Park Master Plan,” is an updated version of the company town and offers roughly 1.33 million square feet of office space, along with residential housing, open-air recreational space, commercial buildings, retail shopping and a host of other amenities. The search-engine company will hold ownership of the campus.

It’s not just Google that’s buying or building real estate, while others are shedding their holdings. Amazon embarked on a massive $2.5 billion mixed-use office and retail complex in Northern Virginia, which could house about 25,000 employees. The second headquarters, after Seattle, will include three 22-story office and retail buildings. An outdoors theme will include woodlands, an amphitheater, walking paths, extensive bike parking and a dog run.

To hedge its bets, Amazon is anticipating that there will be people who want to come into the office on an occasional basis. Designs are being made to accommodate space where workers can collaborate with each other. Inside the office, there will be greenery and amenities, such as an artist residency program.

In another move that challenged the current trend of companies embracing employees working from home, social-media giant Meta, formerly known as Facebook, purchased the beautiful, new and unused 400,000 square foot corporate campus headquarters from outdoor lifestyle retailer Recreational Equipment Inc (REI) near Seattle.

The spectacular complex offers a design and functionality incorporating the environment and nature with an office space consistent with its outdoor lifestyle brand. It has outdoor staircases, a bridge, courtyard and skylights for workers to see the wide-open sky. The REI campus was never occupied, as the company pivoted to a remote-work setup. The company planned to sell the building in its entirety or keep some office space and rent out the rest.

The tech giants are clearly keeping all options open. It makes sense. If there is a backlash against remote work two or three years down the line, the tech companies would then have to scramble to acquire properties. Presumably, the Silicon Valley-based companies are getting good deals on the real estate, as other organizations are selling, breaking leases, subletting or going fully remote.

Source: Forbes, January 14, 2022

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