The news: Big Tech is playing a high-stakes game of Monopoly by amassing office and retail property during the pandemic. Amazon, Facebook, and Google have been buying commercial real estate as investments and as a way to avoid expensive and complicated leases, per The Wall Street Journal. Collectively, the Big Three have amassed more than 8 million square feet of space in Manhattan alone.
Why it’s worth watching: Real estate is a sensible investment for companies sitting on large cash reserves. Tech companies have found opportunities to acquire offices, data centers, warehouses, and retail spaces during the pandemic, when many commercial properties were underutilized. And interest rates are at all-time lows, so Big Tech companies with cash on hand are in a prime position to grab the best deals.
The bigger picture: The appetite for office space and real estate despite the pandemic is a manifestation of Big Tech’s continuous growth and buying power. Plus, Big Tech companies that own their buildings can avoid expensive, cumbersome lease agreements, and many of these properties are also renovated or custom-built and will likely appreciate in value over time, per the WSJ.
The opportunity: Property investments could pay off after the pandemic passes—these companies will have no shortage of office and commercial space for their returning employees and can lease out surplus space to other companies.