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French banking giant BNP Paribas has taken the route of small American towns, opening a new hub about 100 miles from New York City in Chesterbrook, Pennsylvaniaa.
The suburban campus does not report the plans of the Paris-based BNP BNP,
to give up New York or other global hubs of commerce in response to the pandemic, but rather to expand its campus network, including outside urban enclaves, as part of its “office as a destination†concept.
Many of the world’s largest financial institutions and companies have been forced to rethink the future of the office in response to the pandemic – sometimes several times – including because the delta variant of the coronavirus has thwarted attempts by some banks to recall more staff to the office by Labor Day.
Read: Flexibility, plants and good vibes are all part of Salesforce’s return to office strategy
Christiana Riley, CEO of Deutsche Bank America says Bloomberg this week it plans to move some 5,000 workers back to the German bank’s new headquarters at Columbus Circle in New York over the next six months or so.
This plan, however, will also allow part of the DB of Deutsche Bank,
staff to work 60% of the week remotely, one person with first-hand knowledge of the matter told MarketWatch.
The increase in flexible working arrangements in America has raised concerns that cities will find themselves struggling with empty office buildings in need of another focus.
See: Can empty offices become affordable housing? New legislation seeks to try
Sales of trophy office buildings over the past 18 months have been scarce, leading to lingering questions about what reputable properties might fetch when construction transactions resume.
However, stocks of several key office REITs have outperformed major US stock indexes this year. Vornado VNO Real Estate Trust,
shares rose about 16.7% on the year through Friday, while those of Boston Properties, Inc. BXP,
increased by 18.1%. This compares to the DJIA of the Dow Jones Industrial Average,
12.3% ahead and the SPX of the S&P 500 index,
gain of 16.1% for the same section.
Rating firm S&P Global warned this week that the recovery in the office sector “may lag behind given the impact of remote working,” but the cloudy outlook could also lead to reduced cash flow in properties, lower valuations and losses for debt holders, such as banks, insurers and US REITs.
Demand for suburban office space remained strong during the pandemic, pushing prices up 14.8% in August from a year earlier, according to the latest commercial real estate price indexes from Real Capital Analytics .
But office prices in central business districts fell during the extended period of working from home, posting an annual decline of 3.7% in August.
BNP’s suburban Philadelphia office will serve as a “model for our future workplace, with particular emphasis on employee well-being and experience,†said José Placido, CEO of CIB Americas at BNP Paribas , in a press release announcing the new campus.
BNP expects approximately 400 employees to eventually occupy nearly 60,000 square feet of the 3-story building at 735 Chesterbrook Boulevard, including some 300 new hires over the next three years. The property was built in the 1990s in a town of around 4,800 residents which was recently listed as one of the best places to live in America for its public school, housing, jobs and more.
The French bank operates in 68 countries and has been present in the United States since the late 1800s.
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