Leased Office Space Options In A Post-COVID Landscape
Jun 07, 2022
Most companies can agree one of biggest impacts the COVID-19 pandemic has had on their businesses is the shift from in-person to remote working, and it’s not going back to normal any time soon. However, one thing employers in all industries are struggling to agree on is how to use their leased office space with the majority of their talent working from home.
We’ve compiled information on the strategies some of the nation’s largest companies have taken to make the most of their leased office space, and how these strategies could effect their bottom line.
Airbnb has instituted a permanent, full-remote option for all employees.
On April 28th, Airbnb co-founder and CEO Brian Chesky unveiled the company’s new “Live and Work Anywhere” policy to employees around the globe. This groundbreaking strategy allows anyone from the Airbnb team to “live and work in over 170 countries for up to 90 days a year in each location.”
According to the Chesky, “the best people live everywhere, not concentrated in one area. And by recruiting from a diverse set of communities, we will become a more diverse company.” However, this change came with one caveat; each employee must maintain a permanent address for tax and payroll purposes.
Google and Meta (Facebook) have invested in even more corporate office space.
As many companies begin to embrace hybrid, work-from-home arrangements for their employees, others have started aggressively purchasing the excess office space left in their wake. A recent CBRE report showed a 100% increase in commercial leasing activity year over year for the first quarter of 2022, as tech giants like Google and Facebook work to expand their already sprawling campuses.
Last September, Google announced its plan to purchase and develop a sprawling Manhattan property for $2.1 billion – the largest, single-building commercial-real-estate deal since the start of the pandemic. Six months later, Meta Platforms Inc. (formerly known as Facebook) made headlines with news of its plans to lease an additional 300,000 square feet of office space next to its existing location, giving the company almost an entire New York City building.
What strategy makes the most sense for your business?
Regardless of size or location, the strategies behind where businesses decide to base their workforce can be heavily impacted by a variety tax considerations. Legislation on tax withholding for remote workers in certain municipalities continues to change, as we saw in Ohio during the beginning of the pandemic. On the flip side, those that choose to expand into new office spaces may want to consider running a cost segregation study to ensure no tax benefits have been left on the table.
Regardless of which direction you decide to take with your office space, we recommend connecting with William Vaughan Company’s team of trusted advisors to discuss which strategy best suits your business’s workforce needs all while reducing your potential tax risk.
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