Stranded Assets: How to See Them Before They Strand You

By Russell G. Redenbaugh and Maximus B. Lewin

Most of us brush against stranded assets every year without realizing it. Think about Intuit and ADP. If you’ve filed taxes with TurboTax or been paid through ADP, you’ve seen how these companies dodged what should have been a slow death.

Intuit started in the 1980s with desktop software—Quicken, QuickBooks—sold in boxes at Staples. By the late 1990s, that business looked as vulnerable as Kodak’s film rolls. Digital delivery was inevitable. Competitors like Xero and Wave were lining up to eat their lunch. But in 2001, Intuit launched QuickBooks Online. It was early, clunky, and most small businesses didn’t care. They pushed it anyway. By 2017, online subscriptions had overtaken desktop sales. Today QuickBooks Online serves more than 7 million subscribers, and TurboTax processes returns for over 30 million U.S. filers each year. The desktop box is a relic, but Intuit isn’t.

ADP faced the same cliff. Payroll in the 1980s was fleets of couriers, stacks of checks, file cabinets stuffed with timesheets. Startups like Gusto and Rippling promised to digitize the mess. ADP could have stranded itself clinging to paper. Instead it built cloud platforms like Workforce Now and RUN, layered on compliance services that startups couldn’t match, and leaned on its million-client base. In 2025, ADP still leads payroll with more than $18 billion in annual revenue. They outlasted the nimble competitors because they cannibalized their own model before someone else did.

Now hold those stories up against the companies that didn’t make the pivot. Kodak had digital cameras in its labs but protected film margins until it was too late. Blockbuster had the chance to buy Netflix for $50 million and said no. The common mistake was refusing to break their own model. They protected legacy revenue until the assets around it—film plants, retail leases, store fixtures—became stranded.

That same pattern is unfolding across whole sectors of the economy.

Look at banks. Branches once defined retail finance. The Federal Deposit Insurance Corporation reports U.S. branch counts have fallen from over 95,000 in 2009 to about 70,000 today. Meanwhile, the Federal Reserve’s data shows more than three-quarters of deposits now happen electronically. Vaults, teller counters, and drive-through lanes don’t generate a return when the money moves on phones. A few branches can be repurposed into medical or coworking space, but most are too specialized. Every idle branch is a stranded cost center in waiting.

Higher education is just as exposed. U.S. bachelor’s enrollment is down nearly 4% since 2019, according to the National Center for Education Statistics. At the same time, vocational and trade enrollment is up double digits: construction training alone rose 23% in a year. Hundreds of small private colleges with sticker prices north of $70,000 and tiny endowments are already walking dead. Their campuses sit in towns no one is moving to, with debt service they can’t shed. Some will merge, a few will reinvent, but most will fade. Their lecture halls, dorms, and gyms are the coal plants of education—fixed costs that don’t flex when demand disappears.

Restaurants show the same curve. Pizza Hut’s classic red-roof dine-in locations, once the symbol of family night out, are now mostly obsolete. Yum! Brands, Pizza Hut’s parent company, reports that more than 99% of its units are franchised and the growth is all in delivery and carry-out. The dine-in “red roof” boxes strand because the cost structure doesn’t fit. Too much space, too much parking, too many salad bars. They get gutted, leveled, or converted to something entirely different. The brand survives, but the boxes are stranded.

Office towers might be the largest stranded asset class in the country today. CBRE, the commercial real estate giant, reported U.S. office vacancy near 19% in mid-2025, the highest in decades. That means almost one in five offices sits empty. Remote and hybrid work reset demand permanently. A 20-story tower built for 9-to-5 commuters can’t become a logistics hub or a lab without massive capital. Conversion is possible but slow and expensive. Meanwhile the fixed costs—the mortgages, the maintenance, the taxes—don’t go away. The assets sit half-used, bleeding cash.

The drivers are the same across all these cases. Demand shifts to a substitute: digital instead of physical, remote instead of in-person, delivery instead of dine-in. The asset is too specialized to adapt: a vault, a dorm, a red roof. The fixed costs don’t flex: faculty salaries, debt service, HVAC bills, taxes. Regulation and geography amplify the pain. Once the signal breaks—once customers decide the old channel isn’t worth it—it rarely comes back.

That’s what investors need to focus on. Not the nostalgia of what the asset was built for, but the allocation question: will this earn its keep ten years from now, or is it already halfway to obsolete? The students walking away from generic bachelor’s degrees in favor of trades are making capital allocation decisions institutions refuse to. That’s what survival looks like—choosing the substitute before the old model becomes a liability.

The past two decades gave us both sides of the playbook. Kodak, Blockbuster, and hundreds of small banks stranded themselves. Intuit and ADP didn’t. They broke their own models and dragged their customers with them. The question for any investor looking at an asset class—whether it’s a college campus, an office tower, or a chain of dine-in restaurants—is simple. Which playbook is this operator following?

Because once an asset is truly stranded, there’s no coming back.