LATEST NEWS

Why Companies Are Paying Big Money To Have An Office In These Six Cities

It costs a fortune to rent office space in one of these 6 cities. Are they advantages really worth the money?

By Jeff Vasishta January 23, 2017

“Watch out!” landlords of commercial office spaces have been warned, “The millennials with all their remote working, co-working, and gig economy ideas will kill your business.” Well, perhaps at some point. But based on a new Bisnow report, the millennials, Generation X-ers, baby-boomers and just about anyone else who needs a job are showing up for work in some of the world’s most bustling cities. Their employees, meanwhile, are paying a premium for office space to stay in the mix with the business community around them.

According to the report, which reflects the last quarter of 2016, businesses are shelling out upwards of $130 per square foot annually to keep a competitive edge in six of the world’s most dynamic cities. Using its Premium Office Rent Tracker to compare top office costs, JLL found these six international markets drained corporate rent coffers the fastest.

RelatedFive Awesome Offices You Wished You Worked In

Hong Kong

Rent: $302 per square foot, vacancy rate (grade-A space): 1.5 percent

London (West End)

Rent: $197 per square foot, vacancy rate (all space): 4 percent

New York (Midtown)

Rent: $194 per square foot, vacancy rate (all space): 8.7 percent

Beijing

Rent: $179 per square foot, vacancy rate (grade-A space): 1.4 percent

Tokyo

Rent: $153 per square foot, vacancy rate (grade-A space): 1.9 percent

Shanghai

Rent: $135 per square foot, vacancy rate (grade-A space): 6.5 percent

RelatedManhattan Office Leasing Hits Seven-Year Low

The table above, though, doesn’t mean that all major companies are eschewing the work from home philosophy, touted so heavily in recent years. Working from home saves office space and, thus, saves money. However, just don’t expect to Google Hang Out the CEO or upper management and see them on their couch in their PJ’s with a bowl of chips and Premier League soccer playing in the background. General rule of thumb—the higher up the corporate ladder you go, the more you are expected to show up to work in an office, not on a laptop. It doesn’t mean that you can’t secure a decent job by working remotely. These 23 Fortune 500 companies, probably, pay top dollar for office space in one of the six primo markets named above—but they are also a friend to remote workers.

Unless a start-up company has a surplus of cash they need to burn through to justify their place in the world, it’s doubtful they will be paying $302 per square foot to be in a glossy Hong Kong office tower. Remote working has proven highly effective in getting smaller companies off the ground while keeping costs down. These 39 companies show that success isn’t always predicated on being in the mix in one of the world’s most expensive cities. Sometime an internet connection is all you need.

One of the biggest arguments against working from home is that it’s hard to build a collaborative team spirit. That only comes from in-person contact, bouncing ideas off one other and occasionally a joke or two. It’s why former Yahoo! CEO Marissa Mayer ordered her remote workers back to the company HQ in 2013 when she took over. Showing up for work helps if work is a fun place to go. That means being around inspiring, interesting people.

Although it’s hard to interview a prospective employee based on their fun and interesting quotient, established corporations like G.E., Merck and homebuilder Lennar are realizing that attracting top, younger talent means competing with hipper youth driven companies. Many of them are now embracing the the concept of “if you can’t beat ‘em, join ‘em” and are renting space from co-working companies like WeWork, allowing employees to be in a more liberating environment than they would have otherwise been in. If those spaces happen to be some of the most vibrant, inspiring cities in the world, then all the money they are paying to be there might just be worth it.

 

 

Jeff Vasishta

ABOUT THE AUTHOR Jeff Vasishta

ABOUT THE AUTHOR Jeff Vasishta

Jeff is a writer, husband and father but not necessarily in that order. As a music journalist he counts Prince, Beyonce and Quincy Jones amongst those he’s interviewed. He's also owned and flipped homes in Brooklyn, NJ, CT and PA.

  • AGORAFY
    Avocado toasts are the reason why millennials can’t afford a home, says one Australian real estate developer. #AvocadoToast #Millennials https://goo.gl/TBCPnv
  • AGORAFY
    Five years on since Superstorm Sandy, Queens’ coastal peninsula is in the midst of a development boom. #Development #Rockaways https://goo.gl/BRKRrD
  • AGORAFY
    It turns out, renters can’t get enough of good ol’ no-doorman-no-frills apartments. Too bad developers aren’t building any. #Doorman #LuxuryRentals https://goo.gl/pdnbo6
Developers Jump Aboard The Trend To Revamp Transit Hubs And Remake Cities
Never has the often used marketing term, “close to transportation” been more important when attracting home buyers. These days it’s not just homes that are…
Millennials Are Fueling The Current Sizzling Real Estate Market
Ever wondered why the hosts of home improvement shows seem to be getting progressively younger, along with the fresh-faced couples getting their new properties made…
The Best Cities For Recent Grads To Rent – Without Blowing Their Entire Paycheck
What’s next post graduation? For most, the logical answer is to find a job. After the excitement of finishing your studies and the big celebration,…
Luxury Knows No Limit In Malaysia As A Deluge Of New Developments Hit The Market
The amount of newly constructed high-end real estate in Malaysia is almost as abundant as the lush vegetation which covers the tropical landscape. Despite vacant…
Don’t Call It A Commune – Upscale Co-Living Is Attracting Major Development
What may have once been referred to as a commune is today termed a co-living space. The big news that it’s not hippies with hemp…
It’s Official—New York Is Now The Most Expensive City In The World To Build
As if you didn’t already know, it’s expensive to build in New York City. Not just expensive but now officially the most expensive place in…
An Ultimate Destination For The Most Comprehensive Real Estate Data, Agorafy Prepares To Launch Nationwide
In the coming days, Agorafy will be entering a new chapter. It is the beginning of a new growth cycle in real estate technology with…
A New Beach Front Condo Building Slated For the Rockaways Amid A Slew Of New Development
Proving that New Yorkers are the masters of reinvention, particularly when it comes to real estate, a new millennial-friendly condo tower is due to rise…

TOP 10