Big Tech Spent Big Money On Retail And Office Space Amid Pandemic

Big Tech apparently hasn't been sitting on their cash during the pandemic. They've been buying up huge amounts of commercial real estate.

Companies like Google, Amazon, and Facebook are sometimes referred to unflatteringly as ‘Masters of the Universe’ because of their influence on what many people hear, read, and buy. However, the slang reference now may be more appropriate, as the companies have recently spent billions of dollars on retail and office space. Google, for example, announced last week they're buying a Manhattan office building for 2.1 billion dollars. Amazon and Facebook are also spending hundreds of millions for commercial real estate in major cities across the country.

Mike Wong, with Keller Williams Southwest, says while that may seem alarming at first, it's not as crazy a move as many might think.

“If you look at the majority of office towers and office buildings, and major investments around not just Houston, but around the country, most of them are owned by institutional groups,” Wong said. “Institutional groups are companies like our insurance funds or pension funds and large publicly traded companies on Wall Street that invest in real estate.”

Buying real estate is often a way for big companies to avoid sometimes pricey and cumbersome leases.

“They do want to be the landlords just based on an investment perspective,” he explained. “This gives them an opportunity to have a corporate location or identity within these major cities, attract employment, and establish their roots in the communities.”

Walmart and McDonald’s, for example, have long been major property owners of their own stores. Some say Big Tech is getting too big, but Wong says he wants to see what companies like Facebook do with the properties they're buying.

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