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COVID Is Making Many Offices Obsolete. Here’s What Happens to Them Next
The American office building, where millions of white-collar employees have headed to work for more than a century, is in a state of reckoning, the Wall Street Journal reported. Newly built skyscrapers in central business districts are still filling up and charging top rents, even during the pandemic, but thousands of older buildings across the U.S. face an uncertain future. As more companies elect to make remote work or a hybrid model a permanent part of their corporate culture, they are looking to cut costs on real estate. An outdated office makes the decision to end a lease or sell a building easier. In New York and San Francisco, more than 80% of all office space is more than 30 years old, and Chicago isn’t far behind, according to Phil Ryan, director of U.S. office research at Jones Lang LaSalle Inc. These three cities also have some of the lowest office occupancy rates in the country: Less than 40% of the workforce was back in the office as of early December, according to Kastle Systems, which tracks how many people swipe into buildings.
Malls Ditch Shopping to Fill Large Number of Vacant Retail Stores
Imagine 16 deserted Mall of Americas. That’s how much space battered mall owners need to fill heading into 2022, more than 90 million square feet, Bloomberg News reported. It’s no easy task, with dozens of retail chains already cutting back or shutting down, and it won’t get any better if the newest pandemic wave scares off shoppers. So landlords are wooing businesses that have little or nothing to do with shopping. Casinos, amusement parks, medical facilities, storage units, hotels, schools, offices and residences are fair game, as even healthy shopping centers are forced to rethink their game plans for next year and beyond. “In 2030, you’re going to see most malls are going to be not considered a mall anymore,” said Greg Maloney, chief executive for Americas retail at real estate services firm JLL. “They’re going to be considered a mixed-use asset.” They might wind up looking like Mall of America, the biggest one in the U.S. whose layout includes Nickelodeon Universe and an aquarium, or like Chattanooga, Tenn.-based CBL Properties. Last August, this owner of about 100 less-prestigious malls and shopping centers added the 80,000-square-foot Hollywood Casino on an old Sears site at its York Galleria in Pennsylvania. It brought in industry giant Penn National Gaming Inc. with 500 high-tech slots, two dozen table games and a Barstool Sportsbook.
American, Delta, United CEOs to Testify Before U.S. Senate Panel on Dec. 15 on Impact of Pandemic Payroll Support
The chief executives of American Airlines, United Airlines and Southwest Airlines will testify on Dec. 15 at an oversight hearing before the Senate Commerce Committee on the impact of $54 billion in COVID-19 government payroll support for U.S. airlines, Reuters reported. The hearing will look at "the effect on the airline industry’s workforce, and the effect of airline operational performance on American consumers," according to a committee statement. American CEO Doug Parker and Southwest CEO Gary Kelly, who are both stepping down in early 2022, will testify, as will United CEO Scott Kirby. Delta Air Lines Chief Operating Officer John Laughter also will testify, as will Sara Nelson, president of the Association of Flight Attendants-CWA. Lawmakers are expected to quiz executives about how carriers used pandemic-related federal aid, staffing issues and other matters. U.S. airlines and carriers around the world were hard hit by reduced business and tourist travel during the COVID-19 pandemic. Starting in March 2020, Congress approved three rounds of taxpayer bailouts totaling $54 billion to cover much of U.S. airline payroll costs through Sept. 30 of this year as a result of the pandemic.
Labor Report Shows 11 Million Job Openings as of October
In July, the U.S. economy had a record 11.1 million job openings that employers couldn’t fill. As of October, that number remains essentially unchanged — at 11.0 million job openings, YahooFinance.com reported. Data from the Bureau of Labor Statistics released Wednesday confirmed the persistence of hiring difficulty for America’s employers. From restaurants to retail, industries across the economy continue to operate with fewer workers than pre-pandemic levels. Although the availability of jobs is leading to greater bargaining power for job-seekers, economists worry that an inability to staff up firms could drag on economic growth. The Federal Reserve, the nation’s central bank, noted anecdotes of firms having to actively turn down business or close because of a lack of staff. The Fed’s Beige Book (covering the month of November) detailed school closures in the Pacific Northwest due to a lack of teachers and a pullback in operating hours at restaurants in New England. In the St. Louis region, recruiters at a transportation job fair outnumbered the number of job-seekers that showed up.
Stuck at Port for 54 Days: How One Ship’s Delays Hurt Small Businesses
In late August, a small container ship called the A Kinka left Hong Kong loaded with, among other things, 50-inch Roku TVs, aluminum cookware and Fender guitars, as well as about 26,000 backgammon and chess sets destined for a small toy company in California. It arrived off the coast of Los Angeles on Sept. 12, according to marine tracking data, steaming right into a traffic jam of dozens of ships. It floated in the Pacific Ocean for 54 days before it finally got a chance to unload its cargo, the <em>Wall Street Journal</em> reported. More than 100 companies needed cargo on the 574-foot-long ship, including giants like Amazon.com Inc. But for smaller businesses that were waiting for just one or two containers, the delays have taken a heavy toll, leaving some with disgruntled customers and significant financial pain. One small firm had Halloween boots that missed Halloween. Another couldn’t get paid for $250,000 worth of lighting fixtures it had sold until they were delivered. The A Kinka was one of dozens of ships backed up at the ports of Los Angeles and Long Beach this fall as companies scrambled to import goods ahead of the holiday season. It waited longer than most, but it was not alone. On Sept. 19, there were 100 container ships in the port, one of the most crowded days of the year. There were 73 ships waiting to unload while 27 ships were docked for unloading and loading, according to the Marine Exchange of Southern California. Some of the biggest container ships waited less than a week from when they entered the port until they reached a dock. Thirteen mostly smaller ships waited more than three weeks, with the A Kinka stuck for nearly eight weeks—the longest of those that didn't have mechanical issues. Larger companies have been better able to sidestep supply-chain delays because they have more resources at their disposal. Amazon had containers on more than half of the 100 ships backed up at port. The Ports of Los Angeles and Long Beach say they have handled a surge in imports this year and have taken recent steps to reduce the backlog, including switching to 24/7 operations.
