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Working from home and corporate real estate

Author

Listed:
  • Bergeaud, Antonin
  • Eyméoud, Jean Benoît
  • Garcia, Thomas
  • Henricot, Dorian

Abstract

We examine how corporate real estate market participants adjust to the take-off of teleworking. We develop an index for the exposure of counties to teleworking in France by combining teleworking capacity with incentives and frictions to its deployment. We find that the valuation of offices declined more in areas more exposed to telecommuting, a pattern that we do not observe for retail assets. In addition, we show that telecommuting increases vacancy, decreases construction, while transaction volumes are not affected. It implies that the drop in price is due to a shift in demand for space. In addition, our result suggests that market participants are expecting the shift to teleworking to durably affect the demand for office space.

Suggested Citation

  • Bergeaud, Antonin & Eyméoud, Jean Benoît & Garcia, Thomas & Henricot, Dorian, 2023. "Working from home and corporate real estate," LSE Research Online Documents on Economics 118482, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:118482
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    File URL: http://eprints.lse.ac.uk/118482/
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    More about this item

    Keywords

    commercial real estate; corporate real estate; teleworking;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • R33 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Nonagricultural and Nonresidential Real Estate Markets

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