Compass is still coming back to earth — but this time possibly without its headquarters. On Thursday, The Real Deal reported that the real-estate company was looking to sublease its 89,000-square-foot office space at 90 Fifth Avenue near Union Square. The same day, Compass also announced it was conducting its third round of layoffs this year; in an SEC filing, the company wrote that layoffs would “allow for a path to achieve positive free cash flow in 2023.”
All of this is just the latest in a series of cost-cutting measures for Compass, which underwent a rapid rise that many predicted would be unsustainable and now faces the same cooling sales market and stock-market downturn as everyone else. But the business insists that, actually, it would be subletting its New York City headquarters regardless. “We were doing this before COVID when the market was very different, when the company was flush with a tremendous amount of capital,” Rory Golod, who leads the Northeast and California regions for Compass, told The Real Deal. The company had subleased two floors before the pandemic and now needs takers for seven more. Golod added that this was “more opportunistic,” not mandated, and that this office space was just for employees, not agents (the agents’ office at 110 Fifth Avenue is apparently not yet affected). And if you were still wondering about whether or not Compass would be “doing this” in a better climate, Golod added, “Even if Compass was making billions in profits, we’d still be doing this.” (So far the business has failed to turn a profit.)
So as Compass continues to shrink — and as some of its high-profile agents jump ship for other brokerages — you can rest assured that not having a headquarters is all part of the plan.
