Facebook Shifting Many Employees to Permanent Remote Work

Investor · San Francisco, CA · Member since 2016 · 338 posts · 444 votes

Well, this could definitely be a market mover around my neck of the woods and across the country. Facebook will permanently shift up to half of its employees to remote work.

Will people choose to live in the Bay Area if they don't need to be near work? I've got to give this some thought!

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Justin Thorpe

Member since 2020 · 437 posts · 675 votes

@Robert C.

So far FB, Twitter, Square are the big employers who have announced a permanent WFH policy. FB has put more detail on this.

First, they are stating 50% of staff over the next 5 years will be remote. They are also saying they will hire aggressively and grow headcount. So what if they double their headcount in 5 years and allow only 50% of them to work remotely. That means the number of FB employees who work locally will state flat to today’s figure.

Second, it’s not an automatic perk. Only those employees who are “eligible” can avail the remote option. So many employees may not make the cut.

Third, those who opt in, will be paid adjusted salaries based on their new city of location vs take their SF salaries in those locations.

My own take is that the remote option looks great on paper but it’s not for everyone. I mean what if you can work remotely for FB but your spouse’s employee does not support WFH. What if you have kids who are in middle or high schools. What if you are a senior exec.

All that means you stay local vs moving to the forests of Wyoming, but on the plus side you get to avoid local Bay Area commute and live a bit further out maybe.

Also remote working is not uncommon in the tech business. People work remotely often, sometimes 2 days a week or more. Many times these folks tend to get left behind in careers vs others who show more time at the office and network. So again for the ambitious, remote working may not appeal.

In the end large Bay Area employees like HP, Apple, SalesForce, Tesla, NetApp, Intel, nVidia, Google, NetFlix, Intuit, AirBnB, Uber, PayPal, eBay, VISA, Oracle and many others are only telling employees to work remotely until the next few months vs permanently.

So yes while a few companies like FB and Twitter are pushing the envelope, most others are not.

What this means is the residential market should largely remain ok and un impacted. There are concerns on commercial RE and rightly so.

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Taylor L.
Rental Property Investor · RVA · Member since 2016 · 5k+ posts · 4k+ votes
6y
It depends. If they "permanently work from home" but need to come to the office once a month for meetings, then they will be unlikely too go far. If they are truly untethered, they're not going to stay. There are many nice places to live that cost a lot less than SF.
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George W.
Investor · NJ · Member since 2018 · 869 posts · 921 votes
6y
I feel like a lot of large companies are going to start following that trend after this.
Why have a big old office building or many, when you can have most of those people work from home?
2 Reply
Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
6y
Company leadership teams all over the world are having these conversations. For most, the answer is not binary (keep or sell the HQ) or immediate...the answer lies in between where less space is needed for the same workforce, or the same space will be used as the workforce grows.

COVID (and technology) has exposed leaders to possibilities...and accelerated the evolution of flexible work plans and facilities optimization.
4 Reply
J Usmonov
Member since 2020 · 21 posts · 1 vote
6y
@Mike Dymski but what does this mean to RE investment?
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Mike Dymski
Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
6y
Originally posted by @J Usmonov:
@Mike Dymski but what does this mean to RE investment?

It will disrupt the office sector and create less opportunity over the long-term (and short-term for landlords of companies who are not going to make it). Regarding the residential impact, that's likely an involved, two-drink conversation with a lot of guesswork.
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Justin Thorpe
Member since 2020 · 437 posts · 675 votes
6y
@Robert C.
So far FB, Twitter, Square are the big employers who have announced a permanent WFH policy. FB has put more detail on this.
First, they are stating 50% of staff over the next 5 years will be remote. They are also saying they will hire aggressively and grow headcount. So what if they double their headcount in 5 years and allow only 50% of them to work remotely. That means the number of FB employees who work locally will state flat to today’s figure.
Second, it’s not an automatic perk. Only those employees who are “eligible” can avail the remote option. So many employees may not make the cut.
Third, those who opt in, will be paid adjusted salaries based on their new city of location vs take their SF salaries in those locations.
My own take is that the remote option looks great on paper but it’s not for everyone. I mean what if you can work remotely for FB but your spouse’s employee does not support WFH. What if you have kids who are in middle or high schools. What if you are a senior exec.
All that means you stay local vs moving to the forests of Wyoming, but on the plus side you get to avoid local Bay Area commute and live a bit further out maybe.
Also remote working is not uncommon in the tech business. People work remotely often, sometimes 2 days a week or more. Many times these folks tend to get left behind in careers vs others who show more time at the office and network. So again for the ambitious, remote working may not appeal.
In the end large Bay Area employees like HP, Apple, SalesForce, Tesla, NetApp, Intel, nVidia, Google, NetFlix, Intuit, AirBnB, Uber, PayPal, eBay, VISA, Oracle and many others are only telling employees to work remotely until the next few months vs permanently.
So yes while a few companies like FB and Twitter are pushing the envelope, most others are not.
What this means is the residential market should largely remain ok and un impacted. There are concerns on commercial RE and rightly so.
8 Reply
Tom Makinen
Member since 2019 · 226 posts · 115 votes
6y
Remote work is great until you get laid off and can’t find another remote job
4 Reply
Pat L.
Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
6y
Originally posted by @J Usmonov:
@Mike Dymski but what does this mean to RE investment?

My daughter & room-mate both work from home & have done for several years. They are now looking to buy a 4 bedroom 3 bath, as their 2 bedroom, 2.5 baths rental is cramped. Also with Zoom demands both have at least 2 screens on their desks. Others I know are renovating basements & patio's into 4 season office enclaves. We now have a couple of tenants that work remotely so we may supply hi-speed internet as a rental boost incentive.
During my University years I dated a girl whose father ran his legal firm from his homes poolside & his business happy hours were a blast. The lower part of his yard had an immaculate putting green.
Our mixed use commercials are still very much in demand as the tenants need space for a workshop, equipment storage, work vehicles, security & their wives don't want that clutter at their homes. We did just look at buying a Pub with apartments & also a large 3-unit that was used as a home based day-care. Both have since closed & because of the significant business reversals they are doomed.
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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
6y
More people working from home, more box stores put out of business by Amazon, more restaurants and other small businesses shutting down...this is going to be a bad time for commercial property.
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Ron Patton
Property Manager · Indianapolis, IN · Member since 2019 · 31 posts · 21 votes
6y
My sister is employed by Facebook and works out of their Manhattan office. She's been employed a few years now and they told her that she was eligible to work from home from here on out. Her superior said this would be the new normal for the rest of the year at a minimum. She moved back to Chicago for at least two months. Can't blame her for wanting to get out of New York.
Could you imagine someone telling you in November of last year that this was how 2020 was going to pan out?
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Nicole Heasley Beitenman
Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
6y
Originally posted by @Justin Thorpe:
@Robert C.
Second, it’s not an automatic perk. Only those employees who are “eligible” can avail the remote option. So many employees may not make the cut.
If your ENTIRE company has been working remotely for the past 3 months, you're going to have a hard time justifying why anyone needs to come to the office 5 days a week. I can't foresee them deeming many ineligible.
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Michael Noto
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
6y
This will all depend on if the employees will be able to be 100% work from home or if they will still have to come to the office for meetings/presentations from time to time. Very interesting topic though and one to monitor.
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Justin Thorpe
Member since 2020 · 437 posts · 675 votes
6y
@Nicole Heasley
Agree for the near term and FB is telling employees not to show up to the office for the rest of the year. But we won’t be in lock down mode for the rest of our lives. When life normalizes and more and more people return to work (Jan 2021 for FB), it will be a different ball game. That’s where the eligibility comes in. Fact is with lower salaries and extra RE space to hire even more young people locally, FB is making a brilliant move to attract talent. Employees think they are winning. Most likely they are not. It’s like the time when companies announced “unlimited PTO” as a perk. We all know how that worked out.
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Llewelyn A.
Investor / Broker · Brooklyn, NY · Member since 2016 · 665 posts · 1k+ votes
6y
If the work from home permanently isn't a fad, then I definitely foresee a demographic shift.
Maybe older couples with Families who have lived in the Major Cities will wonder why they are paying so much to have a tiny place to live when they can have a lot more space in a different location.
Maybe younger people would say, "Hey, I'm young and I want to live in the exciting Cities, especially now that the older crowd and little kids are moving out!"
I suspect that the business districts won't go away. The population will just get more Younger and Single people living there enjoying those kinds of amenities.
Ultimately, there will be larger venue type events coming back, especially in tourist areas. Families that moved out that already had that experience may say, "Been there Done that."
But younger people would want that experience.
My thoughts are that there will be a shift in Office Space requirements for companies. Some of these spaces will need to be repurposed. Some will be converted to Residential. Some may be converted to other purposes like holding areas for Amazon Packages waiting for an order then delivered within an hour.
The major theme here is that the future probably will change from living where you work to living in a place that suits your lifestyle.
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Matthew Irish-JonesBusiness Member
Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
6y
@Robert C. I started seeing some of this in Buffalo NY over the last couple years. As remote work jobs because available for people living in NYC they decided to move to Buffalo.
Buffalo is no NYC but it’s a lot cheaper place to live, has less traffic and a more affordable place to investor for smaller investors. Any remote workers without roots in the city found it advantageous to get a NYC salary at a Buffalo cost of living
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Jim Campbell
Specialist · Buffalo NY (buffalo, ny) · Member since 2019 · 42 posts · 32 votes
6y
I'm hoping someone comes up with a way for me to work on my houses while laying on the couch, eating a bag of chips, drinking a beer and watching the game....
if they do, I'm all in...
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Robert C.
OP
Investor · San Francisco, CA · Member since 2016 · 338 posts · 444 votes
6y
Interesting perspectives and analysis from everyone. Thanks for the responses.
I think what I'm finding fascinating about this market disruption is that I'm not getting a sense that there's much damage to multifamily in the immediate term. There's certainly a Covid-19 discount on certain properties where the sellers are either fearful or just need to sell. But it's not some giant drop. The dangers to multifamily seem more about these tangential potential trends over the medium to long term. And if you're not paying attention, its quite possible one of these trends could have a major effect on your local market before you notice. De-urbanization? Remote work? Less consumerism? Retail/restaurants not coming back? There's a lot of moving parts, and its hard to figure out which ones will stick, and whether it's a bad or good thing for rentals.
Sure, 6-12 months out, maybe things change. I find myself thinking back to 2008 and how long it took multifamily owners to be in trouble on their investments. My first purchase was 2010 with prices on the rise from that point on, so I guess it's possible that we're just not there yet. However, 2008 felt like a much more immediate impact to a wider breadth of apartment owners. This time, people seem to have reserves, and with the stock market continuing to go up, I think that could imply that there's a lot of investment money still looking to find a home.
Facebook, can definitely be a trend setter, though, and that's why the article got my attention. It could be a pretty big gamble if they follow through. The bay area has been a battle ground for tech companies scooping up land and leases for offices. So if they give up some of their real estate footprint, they may be out of luck in the future if they make the wrong bet.
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Daniel HymanBusiness Member
CPA · Milwaukee, WI · Member since 2016 · 2k+ posts · 1k+ votes
6y
Given this new trend, does anyone have thoughts on where the next rental hot markets might pop up?
I'm thinking smaller cities within a 1-2 hour drive from major cities.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y
Originally posted by @Matthew Irish-Jones:
@Robert C. I started seeing some of this in Buffalo NY over the last couple years. As remote work jobs because available for people living in NYC they decided to move to Buffalo.
Buffalo is no NYC but it’s a lot cheaper place to live, has less traffic and a more affordable place to investor for smaller investors. Any remote workers without roots in the city found it advantageous to get a NYC salary at a Buffalo cost of living
this is why Vegas may not crash.. so many CA OR residents moving there.. NO state income tax.. work remote. reasonable priced homes compared to the coast.

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y
Originally posted by @Robert C.:
Interesting perspectives and analysis from everyone. Thanks for the responses.
I think what I'm finding fascinating about this market disruption is that I'm not getting a sense that there's much damage to multifamily in the immediate term. There's certainly a Covid-19 discount on certain properties where the sellers are either fearful or just need to sell. But it's not some giant drop. The dangers to multifamily seem more about these tangential potential trends over the medium to long term. And if you're not paying attention, its quite possible one of these trends could have a major effect on your local market before you notice. De-urbanization? Remote work? Less consumerism? Retail/restaurants not coming back? There's a lot of moving parts, and its hard to figure out which ones will stick, and whether it's a bad or good thing for rentals.
Sure, 6-12 months out, maybe things change. I find myself thinking back to 2008 and how long it took multifamily owners to be in trouble on their investments. My first purchase was 2010 with prices on the rise from that point on, so I guess it's possible that we're just not there yet. However, 2008 felt like a much more immediate impact to a wider breadth of apartment owners. This time, people seem to have reserves, and with the stock market continuing to go up, I think that could imply that there's a lot of investment money still looking to find a home.
Facebook, can definitely be a trend setter, though, and that's why the article got my attention. It could be a pretty big gamble if they follow through. The bay area has been a battle ground for tech companies scooping up land and leases for offices. So if they give up some of their real estate footprint, they may be out of luck in the future if they make the wrong bet.
Ya know the hot product for new builders the last few years has been ADU or mother in law units Casitas whatever yo want to call them.
I could see builders creating work at home space designed for the at home worker..

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Robert C.
OP
Investor · San Francisco, CA · Member since 2016 · 338 posts · 444 votes
6y
@Jay Hinrichs, Building ADU's is definitely a huge opportunity in California now, especially since they streamlined the process. There's some headwind with local jurisdiction making the adjustment. That's true for new builders but also your everyday investors can zero in on properties with specific attributes to value add.
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David NilesBusiness Member
Property Manager · DeLand FL · Member since 2012 · 860 posts · 243 votes
6y
Not surprising at all, companies are seeing new models for what they can do cheaper and more effectively through all this and things are going to change. Look at the remote web MD stuff, Dr office visits will become less and less.
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Thalia G.
Member since 2018 · 80 posts · 21 votes
6y
@Nathan G. The restaurants shutting down is really going to impact the desirability of neighborhoods,especially in the cities
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Matthew Irish-JonesBusiness Member
Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
6y
Originally posted by @Jay Hinrichs:
Originally posted by @Matthew Irish-Jones:
@Robert C. I started seeing some of this in Buffalo NY over the last couple years. As remote work jobs because available for people living in NYC they decided to move to Buffalo.
Buffalo is no NYC but it’s a lot cheaper place to live, has less traffic and a more affordable place to investor for smaller investors. Any remote workers without roots in the city found it advantageous to get a NYC salary at a Buffalo cost of living
this is why Vegas may not crash.. so many CA OR residents moving there.. NO state income tax.. work remote. reasonable priced homes compared to the coast.
Yeah exactly. If all of these huge tech companies start allowing all of their employees to work from anywhere permanently it could have a large impact on huge cities like Seattle, and potentially it could have a positive impact on smaller, cheaper cities that have a lower cost of living.

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y
Originally posted by @Matthew Irish-Jones:
Originally posted by @Jay Hinrichs:
Originally posted by @Matthew Irish-Jones:
@Robert C. I started seeing some of this in Buffalo NY over the last couple years. As remote work jobs because available for people living in NYC they decided to move to Buffalo.
Buffalo is no NYC but it’s a lot cheaper place to live, has less traffic and a more affordable place to investor for smaller investors. Any remote workers without roots in the city found it advantageous to get a NYC salary at a Buffalo cost of living
this is why Vegas may not crash.. so many CA OR residents moving there.. NO state income tax.. work remote. reasonable priced homes compared to the coast.

Seattle is a perfect example.. just hop over the cascades and live somewhere in the Wenatchee area or the WA wine country.
Scoot down and live in White Salmon across from Hood river all of these pretty cool spots with not state income tax.. and reasonable year round weather and lots to do out doors great quality of life.
others maybe attracted though more for the Puget sound area but NO one likes the Seattle area commutes thats a given.

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