Why billionaire Jeff Vinik is “taking the over” on workers going back to the office
- Jeff Vinik, who previously managed the Fidelity Magellan Fund, has placed a big bet on downtown Tampa, backing a more than $3.5 billion real estate development that includes more than 1 million-square-feet of new office space.
- While some companies have embraced virtual work amid the pandemic, others, such as several Wall Street banks, have pushed to have workers return to the office.
- "It will take time, but I think when you're talking ideas, when you're talking people's careers, there's no substitute for face time," said Vinik at a CNBC event on Thursday.
Since buying the Tampa Bay Lightning in 2010, Jeff Vinik has looked to transform downtown Tampa.
The NHL team has improved on the ice, winning the 2020 and 2021 Stanley Cups, and he has spearheaded a more than $3.5 billion real estate development.
While Vinik told CNBC's Diani Olick that he is "no commercial real estate expert" during a CNBC Evolve Livestream on Wednesday, the 56-acre development is putting a big bet on office space with more than 1-million-square-feet of new space and the first office tower to be built in Tampa in over 25 years.
That comes as the commercial real estate market is still trying to find its footing amid the pandemic as employers and workers embraced hybrid and virtual work arrangements. For example, a recent survey found that only 28% of Manhattan office workers are back at their desks and fewer than half will return by January.
Vinik said the Tampa market has bucked some of that national trend. Of that million square feet of space in the development's first phase, he said that 70% to 80% of it has been leased over the past year, which is "well ahead" of what was expected, all part of his belief that people will be returning to work.
"I have been adamant for a year, year and a half, that I will take the over on people returning to office," Vinik said. "It will take time, but I think when you're talking ideas, when you're talking people's careers, there's no substitute for face time."
Evolution of work
Vinik said he sees a work environment that will "evolve into something where people spend a day or two at home at most, three to four days in the office," requiring that employers still maintain office spaces.
"I still think there's going to be really strong demand for office in the years ahead," he said. "There's just nothing like being together and communication, for culture, again for getting ahead in one's career, for ideas, for talking to clients."
While some tech companies including Amazon, Google and Meta Platforms have looked to embrace hybrid work arrangements, Wall Street banks have pushed to get workers back in the office. JP Morgan CEO Jamie Dimon wrote in his annual shareholder letter that "remote work virtually eliminates spontaneous learning and creativity because you don't run into people at the coffee machine, talk with clients in unplanned scenarios, or travel to meet with customers and employees for feedback on your products and services."
On Thursday, Apple pushed back its formal return for corporate employees to February of next year.
"I'm bullish, much more bullish than many people on office in the years ahead," said Vinik, who previously managed the Fidelity Magellan Fund before opening his own asset management firm.
Focus on healthy, environmentally friendly buildings
The Tampa development is in the process of becoming the first WELL-certified district in the world, a new standard that measures how a building is built to optimize health, akin to how LEED certification is focused on energy sustainability.
"Our offices will be WELL certified, and we have already planned for better disinfectants for better airflow," Vinik said. "It's kind of standard operating procedure for us in terms of how we're creating the buildings."
Having more environmentally friendly buildings is also crucial for attracting workers, Vinik said.
"Young people all want to be in buildings that are environmentally sound and are getting toward net zero," he said. "There is overwhelming pressure as a society for this and the real estate industry will be forced to adapt very quickly."
Vinik said that he believes "consumers will spend 5% or 10% more to be in a building that is environmentally sound and as good as it can be, and developers will spend a little more on their building to achieve that."
"You're going to have no choice," Vinik said of developing those types of buildings. "That's where we're headed, and it's good."
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