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PODCAST: NYU Professor Arpit Gupta On The $450B 'Office Real Estate Apocalypse'

Bisnow's audio series, Bisnow Reports, examines every facet of the international commercial real estate industry — from the murky future of retail and office to real estate’s reckoning with diversity to the effects of climate change on the built world, and so much more. You can subscribe on iTunes, Spotify and Amazon Music, or scroll down to listen in your browser.

The view of Midtown from Brookfield's One Manhattan West

On this episode of Bisnow Reports, we hear from Arpit Gupta, an associate professor of finance at New York University's Stern School of Business and one of the co-authors of a research paper called "Work From Home and the Office Real Estate Apocalypse."

The report, released over the summer and updated in the last two weeks, makes several predictions about the future of the workplace and what it may do to the value of office buildings.

“We consider two cases, one in which remote work is here to stay,” Gupta said on the podcast. “In that world, we project that the value of New York City office buildings might decline by as much as 60% by 2029. In our base-case scenario, we account for the possibility that we might see that dire outcome or we might actually see people return back to the office.”

Considering both a negative and positive forecast, the report estimates offices will see a 39% decline in value by 2029. In all, the report's authors estimate about $49B will get wiped out in New York City alone, and roughly $450B of value could be lost nationwide.

On the show, Gupta discusses how the report and its predictions have been received in the real estate and investing communities.

“It's certainly a matter of debate what's going to happen, there are many people on the investing side who seem to agree with our conclusions,” he said. “But there are others who are taking the other side of that trade and are hoping that there is going to be a brighter future ahead for the office.”