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THE CEO AND president of Douglas Emmett Inc., a real estate corporation worth over $3 billion and based in Santa Monica, California, said on an August 2 corporate earnings call that a recession could be “good” for the commercial real estate business “if it comes with a level of unemployment that puts employers back in the driver seat and allows them to get all their employees back into the office.” The executive, Jordan Kaplan, then repeated that “the thought would be that unemployment would be up. And therefore, employers would be in the driver seat to bring people back in the office, which is where they want them.”

“Rather than that,” Kaplan added, “I would not be pleased to have us going into a recession.” He noted that “recessions are a revenue-hitting activity. And if my tenants are feeling the impact of recession, then I can’t imagine how I think that’s good.”

Kaplan made the remarks in response to a question from Citigroup analyst Michael Griffin, who said that “we’ve seen some of your office peers come out and say potentially that a recession could be good for the office space. … Curious kind of to get your thoughts of what we could expect from an impact on the portfolio, just given the central recessionary environment on the horizon.”

 

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