What Dropbox’s $400 Million Real-Estate Loss Says About Office Rents in San Francisco’s Biggest Office Glut Ever

by Wolf Richter
Wolf Street

But working from anywhere has cost cutters drooling: “All expense categories benefited from lower facilities related costs, driven by our employees working from home.”

When Dropbox, the San Francisco cloud services provider, released its earnings Thursday evening, it added a delicate and very costly morsel on top of the commercial real estate gloom pervading the office sector in San Francisco and other cities.

After announcing in October that it would switch to permanent work-from-anywhere, and after announcing in its Q3 earnings release in November that it would therefore not need all of its office space and would therefore book heavy charges associated with it, and after announcing in January that it would therefore cut 11% of its workforce, Dropbox announced yesterday evening in its Q4 earnings release that it would therefore try to sublease the unneeded office space to some other company, and that it had therefore booked a $400 million charge “related to real estate assets.”

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