Someone has to foot the bill for empty offices

IN RECENT WEEKS diversity at work has taken on a new meaning. As vaccination progresses in the rich world and restrictions ease, some huge office tenants, such as Goldman Sachs, a bank, want staff back full-time, while others, like Citigroup, a rival, expect some employees never to set foot in a central business district again. Behind the posturing, a consensus is slowly emerging that white-collar desk-warriors should be allowed to stay at home more often post covid-19—and that many probably will. Office landlords, however, and those who bankroll them, continue to pretend that no storm is coming. With billions of dollars sunk in undesirable buildings, they face a reckoning.

Office bulls rest their case on two pillars. One is to argue that recent evidence shows pandemic-induced disruptions are superficial and temporary. Offices have been spared the carnage that lockdowns have inflicted on other kinds of commercial property, such as restaurants and shops. Even as rent collections plummeted elsewhere, most corporate tenants have continued to pay on time. Debt delinquencies remain a rarity, and prices paid for floor space in global cities have held up. No matter that most open spaces...