Boston Properties CEO Makes the Case for the Office
Over time, he feels employers will want their people in the office as much as possible.
Boston Properties CEO Owen Thomas made a bullish case for the troubled office asset class this week, telling CNBC’s Sara Eisen that Labor Day will be an “important inflection point” for the sector.
In an appearance on the network’s Squawk on the Street, Thomas made clear that he’s a firm believer in the return to the office asset class. The remarks come as a number of companies have announced they will delay a return to the office because of the Delta variant.
In the second quarter, Boston Properties—the largest publicly-traded developer, owner and manager of US Class A office properties—leased 1.2 million square feet of space with a weighted lease term average of seven years. That was double the amount of leasing in Q1 and 90% of the company’s long term averages from the second quarter.
“I haven’t spoken to a business leader who doesn’t think in-person work is important to the success of their companies,” he said. “That being said, they all acknowledge that many of their workers want a hybrid work model, and I think they will provide a hybrid work benefit to many of their employees.
“But don’t forget—when you manage hybrid work and try to save space you have to schedule people’s time out of the office and you can’t give everyone a fixed workstation,” he said. “And I think many of these employees who want a hybrid work model don’t want either of those characteristics in their workspace.”
Thomas said that over time, he feels employers will want their people in the office as much as possible. And that’s where Class A space will be in big demand.
“Having the highest quality buildings, the best spaces and places…that will be very important for these business leaders to attract their employees back to the office,” he said.
Some $16 billion in office assets traded in the second quarter of this year. That includes Boston, which recently debuted a $2 billion office investment joint venture with the intent to acquire and operate office properties in Boston, Los Angeles, New York, San Francisco, Washington D.C., and Seattle.