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JPMorgan Wants Managing Directors Back in the Office Five Days a Week

Banking Giant Calls for Shift From Hybrid Work Models
JPMorgan Chase wants its managing directors to work out of the office five days a week, according to media reports. (JPMorgan Chase)
JPMorgan Chase wants its managing directors to work out of the office five days a week, according to media reports. (JPMorgan Chase)
CoStar News
April 12, 2023 | 10:38 P.M.

Banking giant JPMorgan Chase has asked its managing directors to work out of the office for five days a week, a positive sign for a property type that has been suffering from a lack of demand.

The New York bank’s operating committee wrote an internal memo, obtained by CoStar News, that said: “Our leaders play a critical role in reinforcing our culture and running our businesses. They have to be visible on the floor, they must meet with clients, they need to teach and advise, and they should always be accessible for immediate feedback and meetings. We need them to lead by example, which is why we’re asking all managing directors to be in the office five days a week.”

The biggest U.S. bank is also taking a harder stance when it comes to requirements that some employees are to be in the office at least three days a week unless they get prior permission from senior managers to skirt that directive.

“Most of you are following your hybrid models, but there are a number of employees who aren’t meeting their in-office attendance expectations, and that must change,” the memo said. “You’re responsible for meeting your hybrid model requirements. Your manager is responsible for ensuring that attendance requirements are being met and in cases where they aren’t, taking the appropriate performance management steps, which could include corrective action.”

JPMorgan acknowledged some employees starting their careers prefer to work a full week in the office, according to the memo. The bank said it plans to track attendance to help it manage work schedules as well as real estate.

“This data will help us understand what’s working and what’s not in terms of keeping all of our employees productive and safe,” the memo said.

JPMorgan declined to comment further on the memo to CoStar News. Media outlets including Bloomberg News reported earlier on the policy.

Slow return-to-office rates have pummeled demand in New York, the largest U.S. commercial property market, and the country as a whole. More than three years since the start of the pandemic made remote working common, the return-to-office rate in New York hasn’t crossed the halfway mark and a gauge for 10 major cities across the country, after briefly crossing the 50% threshold, also has been hovering below that, security firm Kastle Systems’ keycard swipe data shows.

Both New York and U.S. office vacancies have surged to record highs of near 13% respectively, according to CoStar data.

Record High Vacancy Rate

First-quarter office vacancy rate and available sublet space in Manhattan both rose to new record highs as higher interest rates, layoffs and concerns about a possible recession joined the remote working trend to further damage an already troubled New York market, according to various brokerage reports.

Manhattan’s commercial property sales, driven in part by a decline in office sales, also plunged last quarter, setting New York on pace for its worst year since 2009, Avison Young said.

Even as Manhattan’s retail market has shown improving signs, office-focused areas such as Grand Central and Herald Square are laggards, according to a CBRE report.

JPMorgan CEO Jamie Dimon has previously said remote working would “significantly” reduce the bank’s need for real estate and change how it manages the space. That’s even as the company moves ahead with the construction of its new headquarters at 270 Park Ave. in New York that Dimon has said will house between 12,000 to 14,000 employees.

The various factors at play facing the market have led major office landlords including Brookfield Asset Management and Columbia Property Trust to default on office loans recently.

For instance, Columbia, which owns top-tier properties in gateway cities from New York to San Francisco, defaulted on a $1.72 billion floating-rate loan backed by seven of its towers in New York and other cities housing well-known tenants including WeWork, Twitter, BuzzFeed and Snapchat.

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