Amazon deals another blow to struggling office market, slashing $1.3 billion in expenses by breaking leases

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Amazon deals another blow to struggling office market, slashing .3 billion in expenses by breaking leases

Amazon (NASDAQ:AMZN) would seek to reduce its office vacancies and save $1.3 billion in the process by letting leases expire, negotiating early terminations and ending the use of some floors of its current offices, according to Business Insider (BI), which cited a source close to the file and internal documents obtained by BI.

This news comes as the commercial real estate market has already been put to the test over the past two years. It has faced significant challenges since the Covid-19 pandemic, which triggered the widespread adoption of remote working arrangements. As many companies shift to remote work models, demand for office space has plummeted, leading to high vacancy rates in urban centers and traditional business districts.

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Companies are constantly reassessing their real estate needs and exploring flexible options such as coworking spaces or completely reducing their office footprint, which does not bode well for the commercial real estate market in the years to come. come.

The commercial real estate trend has led to Fed Chairman Jerome Powell said“There will be more bank failures”, because “the banks will have granted loans to many of these buildings”, which house many empty offices. “We have identified banks that have a high concentration in commercial real estate and we are in dialogue with them,” he added.

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This item Amazon deals another blow to already struggling office market, breaking leases to cut $1.3 billion in spending originally appeared on Benzinga.com

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