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Pinterest cancels office lease in unbuilt project, citing work-from-home shift

199 points by CaliforniaKarl 6y ago

CaliforniaKarl 6y ago
The article's actual title—Pinterest cancels huge SF office lease in unbuilt project, citing work-from-home shift—was 6 characters too long.
- deleted 6y ago
  [deleted]
- dang 6y ago
  I've put the comma back in and sacrificed SF.
lsb 6y ago
Notably, they paid $90M to cancel the lease.
- stingraycharles 6y ago
  Which is perfectly normal between businesses; pay $90MM to get rid of a $440MM lease contract. Heck, as a consumer, if I want to get rid of my car lease I need to pay a hefty penalty as well.
  - lsb 6y ago
    For a company to pay almost a hundred million dollars to not rent office space in downtown SF, that's the abnormal part, compared to 2010-2019.
    - the-dude 6y ago
      Are you suggesting they would have walked free between '10-'19 ? I am quite certain they wouldn't have.
      - iso947 6y ago
        10-19 they would never have got rid of space - and arguably other potential tenants would have paid them to relinquish their rights
        ulfw 6y ago
        Exactly that. They could have easily found another renter/sublet it for no money lost (potentially even gained) those days.
        sulam 6y ago
        Yep, one company I work with closely made something like $16M through subleasing or leaseback (I forget the exact arrangement) in early 2019 after they decided to reduce their office footprint.
  - Hnrobert42 6y ago
    The notable part is not that they had to pay it. It’s that they chose to pay it. It reveals the magnitude of shift to WFH.
    - HenryBemis 6y ago
      Assumption: same performance, increased employee satisfaction, lower costs, fewer expenses (company and employees). Companies now just need a skeleton crew for IT Ops, HR, Accounting. Especially for companies like Pinterest that have probably seen their revenue explode, it's a win win win.
      - tonyedgecombe 6y ago
        Has their revenue exploded? I thought advertising revenue was down this year.
        ckdarby 6y ago
        Etsy & Pinterest are both public companies and this info can be found in their quarterly filings. TL;DR Yes, revenue has increased. Etsy is spending very strong in advertising with Pinterest getting large amounts of it. Disclaimer: Position in both companies.
        tonyedgecombe 6y ago
        Actually it seems to have flattened off: https://www.statista.com/statistics/995107/pinterest-quarterly-revenue-worldwide/ https://www.statista.com/statistics/995107/pinterest-quarter...
        ckdarby 6y ago
        I didn't entirely write what I meant correctly. Etsy's revenue has greatly increase: https://www.statista.com/statistics/409407/etsy-quarterly-revenue/ https://www.statista.com/statistics/409407/etsy-quarterly-re... A lot of Etsy's money did go to advertising. This has ended up in Pinterest's pocket. The fact Pinterest is flat during covid and entirely being an advertising company I consider still growth of revenue. The global advertising spend has greatly decreased, it'll eventually pick back up. But, yes, you are entirely correct, on a direct statement level, revenue is flat.
iso947 6y ago
Office management companies are worried. In the UK they, as well as commuting companies like Daily Mail Group, and overpriced sandwich shops like Pret, have realised their entire company is reliant on millions of sheep trudging 2 hours a day to an office block with no space to fight for a desk to have a day’s worth of meetings on skype. A large anti WFH campaign run by the people behind brexit and linked to trumps campaign is set to start next month in the UK (the feelers you’re judge public mood have already gone out)
- lbotos 6y ago
  link to info for this campaign?
  - evgen 6y ago
    Info on the government campaign to get people back to offices? See any UK newspaper for past week or BBC. The controversy regarding the hypocrisy of government agencies telling people to go back to offices (under pressure from biz groups who represent the various chains that survive off these commuters) while their own workers are WFH? Look to any newspaper from past three or four days for that one. Contra the earlier claim the Daily Mail group is not among those pushing for a return to regular commuting, other than their desire to parrot the Tory party line; in fact, they had one of the more pointed push-backs by showing that the same ministry that was telling companies to return workers to offices had less than 10% of its own employees working in the office (feels somewhat dirty posting a daily mail link, but it does reveal a bit of the controversy https://www.dailymail.co.uk/news/article-8675573/Just-5-workers-returned-Business-Secretary-Alok-Sharmas-office.html https://www.dailymail.co.uk/news/article-8675573/Just-5-work...)
    - davidgerard 6y ago
      safe link: https://web.archive.org/web/20200829123525/https://www.dailymail.co.uk/news/article-8675573/Just-5-workers-returned-Business-Secretary-Alok-Sharmas-office.html https://web.archive.org/web/20200829123525/https://www.daily... There's a bit of politics there - the Daily Mail are still right-wing xenophobes, but the present editor doesn't like the Johnson/Cummings team at all, and takes shots at them whenever he can.
macspoofing 6y ago
What shift? The pandemic?
mherrmann 6y ago
I see a lot of vacant street-level real estate here in Vienna, Austria. These used to be shops and restaurants that I suppose we already on the brink before the crisis. Does anybody have an idea what will happen to all this space after the crisis is over?
- ulfw 6y ago
  New entrepreneurs will open their little boutiques or coffee shops or whatever else in them
  - op00to 6y ago
    You don’t think they will be replaced by huge chains that are able to weather the poor economy?
    - trebligdivad 6y ago
      The huge chains aren't doing much better at the moment; they're hunkering down and closing lots of shops.
    - graeme 6y ago
      There’s no magic in a huge chain. If locations don’t make money, they close them. Space tends to go to places with a profitable use.
      - mc32 6y ago
        Exactly. Witness Lord & Taylor or it’s parent company. Or Starbucks having to close down shops. A closed shop is a closed shop even if the parent co survives.
        dominotw 6y ago
        cheesecake factory
      - WillPostForFood 6y ago
Guthur 6y ago
I'm wondering if we are on the verge of a commercial property apocalypse. If rents are eventually forced down in large metropolitan areas it will wipe out billions of dollars in property wealth. Could make the GFC look like a blip.
- godzillabrennus 6y ago
  Commercial real estate is around a $16T industry in the USA: https://www.reit.com/data-research/research/nareit-research/estimating-size-commercial-real-estate-market-us https://www.reit.com/data-research/research/nareit-research/... Even with a correction in demand there will still be value in the property. The industry will not be wiped out.
  - DevX101 6y ago
    30% market correction will effectively wipe out many players in commercial real estate. Even less than that for many. Keep in mind, real estate is often highly levered so these property owners still have to pay a bank their money.
    - baskire 6y ago
      They’d just be underwater. But if the property is cash flow positive, over time they’d recover.
  - treyfitty 6y ago
    There’s evidence of properties in NYC which have been vacant for 7+ years. These properties, even with the pandemic, have not budged their rent. They simply do not care if they’re not making money. They would rather preserve their capital, bank on appreciation, and not deal with tenants than fall prey to deflationary pressures. The only explanation is the prevalence of some form of money laundering, an area I’m not an expert in.
    - pstuart 6y ago
      Not an expert either, but money laundering does seem to like real estate.
deleted 6y ago
[deleted]
m0llusk 6y ago
Some potentially interesting or amusing details: This project would make use of a tennis club. Club members and tennis enthusiasts pressured the developers to make room for a series of underground tennis courts so valuable recreation space would not be lost, except of course during construction. Also, Pinterest has two other large buildings nearby one of which was built such that it can be extended upward as needed. Both of these buildings are now essentially empty.
- shuckles 6y ago
  Part of why they weren’t fully built out is that San Francisco’s Prop M caps the square footage of office space which can be built in any given year.
eezurr 6y ago
Many commercial properties and apartment complexes are owned by pension funds and REITs. There is an incentive to keep increasing profits to gain customers, payout the pension costs, etc. What will happen if retirees lose this income? Or on the flip side, how will cities be affected when its citizens' income is not siphoned away from the city?
SpicyLemonZest 6y ago
I think this is less of a seismic shift than a lot of people are reading, since the building in question isn't expected to finish construction for years. I think even the most pro-office people would admit that pre-pandemic forecasts of office needs 3 years in the future are now unreliable.
- ghaff 6y ago
  As a company, you don't need to be committing to 100% remote to take the very prudent step of putting any real estate expansion plans on hold for which it makes financial sense to do so. If nothing else, it's a fair bet you'll have more negotiating leverage in 6 months or a year.
  - baskire 6y ago
    Exactly. Pinterest still is holding onto existing sf office space. They are right that it probably doesn’t make sense to pay top dollar for this spot when other spaces in east bay, South Bay and Seattle are cheaper with access to same talent. The Bay Area will still thrive but sf proper-city will have a rough time
thrwn_frthr_awy 6y ago
I'm curious if newly remote employees are getting monthly stipends for internet and electricity? Is that pretty normal or are those costs being pushed on to the employee?
- sulam 6y ago
  If your employer _requires_ you to WFH, say because their office is not open due to COVID-19, California law requires you to be reimbursed for reasonable expenses associated with WFH, including Internet access. Many employers already had this kind of reimbursement in place, though.
  - thrwn_frthr_awy 6y ago
    Interesting. I was the only remote person (by choice) on a team before covid. Now the whole team is remote because of closed offices in LA. Feels weird to now start expensing these things only while the office is closed, but it sounds legally I could?
    - sulam 6y ago
      Legally you absolutely could. It’s like anything else you expense in the course of doing your job. In fact your HR/exec team is falling down on the job if they haven’t announced new policies, since your office is closed.
  - quiescant_dodo 6y ago
    Hmm, that describes me but without reimbursement. Is there a handy website / reference you know of? I'd like to bring this up with my employer.
    - sulam 6y ago
      A quick google found a law firm that analyzes it from the employer perspective, but it’s a good guide to the law and whether or not you should be covered: https://www.mintz.com/insights-center/viewpoints/2226/2020-05-08-refresher-california-reimbursement-requirements-covid-19 https://www.mintz.com/insights-center/viewpoints/2226/2020-0...
adrianmonk 6y ago
The big question that nobody can answer is whether this shift is permanent. Part of the shift comes from the fact that we are in a temporary, exceptional situation. However, views about remote work may have been changed through first-hand experience. People have been working in offices for literally thousands of years. It would be an epic, once-in-a-millennium historical change if we moved away from that. But that doesn't mean it's impossible. People have also been using paper for the written word for literally thousands of years, and we've made a partial but permanent shift away from that. Maybe remote work will follow a similar pattern.
- cblconfederate 6y ago
  people have been working in offices for a few decades. Before that they worked in factories, before that they worked at home, either in the field, or in the shop in front of their house (roman times). Whether it's permanent or not depends on how much energy has been expended to switch habits. Once people settle in a new routine, there are some benefits of remote work that are simply irresistible and probably irreversible (such as taking back control of time).
papito 6y ago
People will still need to get out of the house. I hate working from home. I need my commute to wake me up, but not TOO much of it. I think the future might be shared work spaces (WeWork) but in suburbia - so people can come to work, but not necessarily having to spend 4 hours a day on a commuter train.
- toomuchtodo 6y ago
  I’d like to see communities support non profit coworking spaces to attract talent. Like a library, with wifi, printers, a coffee bar, and a few EV charging parking spots. My coworking space has these amenities, I happily provide financial support. The days of communities catering to businesses to move to them is over. Cater to remote workers (Tulsa, OK has a great campaign for this). They’re the ones bringing dollars.
- echelon 6y ago
  > People will still need to get out of the house. I'm not sure if you're in a California city mindset, but it's easy if you move to a suburb of a city like Atlanta. You can have over an acre of wooded land and be less than an hour's commute to the city. It's super affordable too. 300k gets you 3000sqft and sometimes more. If you're willing to pay double, you can have the same within thirty minutes of the city. And there are still spacious priorities within the city limits.
  - ethbro 6y ago
    If you don't need a decent school zone, can confirm. 38 minutes from downtown. 3 acre wooded lot. 1900 sq ft house (currently refinishing full basement). $135 when I bought, probably $200 now. In the process of selling a much more expensive intown house, because there's no point. The biggest things suburbs need to do these days is revolutionize malls. Tear up all the parking and retrofit empty store space into community-centric things people actually want. Big box -> co-working space, as new anchor tenant.
    - paul_f 6y ago
      Interestingly, if you go north of Atlanta, you can find examples of the new "downtown" areas that have been built in the last few years to replace malls. Avalon: https://www.experienceavalon.com/ https://www.experienceavalon.com/ Halcyon: https://www.visithalcyon.com/ https://www.visithalcyon.com/ Alpharetta City Center: http://www.citycenteralpharetta.com/ http://www.citycenteralpharetta.com/ All 3 within 5 miles of each other
fencepost 6y ago
It'll also be interesting to see the impact on housing. Lots of people probably don't have the space to set up for working from home well, particularly if you're talking about families with 2 people working plus kids doing some amount of remote schooling. Single? Viable. Young couple in a 1-bedroom apartment? Who's working at the new desk in the bedroom and who's at the kitchen table? Add a couple kids in and it just gets tougher. Even if they weren't doing it before people are now going to be looking for an extra office-suitable bedroom.
- mmckelvy 6y ago
  If you no longer have to commute to an office, presumably you can swap that 1 bedroom apartment for a house located a bit further afield.
  - bobthepanda 6y ago
    that's assuming the only thing driving your desire for a 1 bedroom apartment is the desire to be next to an office. the current situation is weird in that COVID has disrupted nearly all non-home spaces, not just the office. But once restaurants, theaters, museums, nightlife etc. are back in business some will still desire to be near activities they're doing all the time. I'm personally interested in how this will really impact important working "third places" like coffee shops, libraries, and WeWork style spaces once people are allowed to go to those again.
  - ffggvv 6y ago
    i’m confused why people have this impression... isn’t the expectation for the vast majority of people that the second this pandemic ends, were expected back in the office? and if that’s the case i can’t really go and buy a home in the suburbs
vondur 6y ago
I keep thinking this does not bode well for California. As more of these software companies embrace work from home, we may see an exodus of high paying jobs leaving the state for locations that are cheaper and better run. California currently gets a large chunk of the state budget from income tax.
- nerdponx 6y ago
  I wonder about if/how this will affect New York as well. It's probably good for the USA in the long run to have more remote work and/or more tech jobs spread out across smaller cities. But there might be adverse implications for the areas stand to lose their statuses as "tech hubs".
- mandeepj 6y ago
  Remote work does not mean you get away with State income tax.
  - what_ever 6y ago
    Companies will change policies to reflect the work location as the office location. So the state income tax issue would be sorted.
    - mandeepj 6y ago
      Will? My friend let’s talk in the present. Cheaper location move can also mean less pay https://www.marketwatch.com/story/facebook-employees-may-face-pay-cut-if-they-move-to-cheaper-areas-to-work-from-home-2020-05-21 https://www.marketwatch.com/story/facebook-employees-may-fac...
      - shajznnckfke 6y ago
        Yeah, if you’re trying to establish residency in another state, you probably need to tell your employer to use that state for your W2 so they stop deducting state tax and so California doesn’t think you still are earning money there. That means your employer knows you moved, and knows you’re saving all that money, so they will probably lower your pay. I think you can still come out ahead if you have a ton of stock to vest, because they can’t cut that, but you still benefit from the lack of state tax there. But once the plague situation ends I think WFH employees will be in a weaker position and tend to get smaller refresh grants. It could be a great one-year-only move for anyone who’s due for a windfall from one of these IPOs.
cblconfederate 6y ago
Bay area employees have a strong incentive to return to the office, since a major shift in location of their companies will lead to a major shift in their compensation, fast. It's likely that the rest of the world , cash starved, will move faster to embrace remote. Inevitably it seems in the medium term even bay area will be dragged along.
kc-rush2049 6y ago
I think that some of this WFH stuff is like Pandora's box. Employers are not going to be able to stuff it all back in the box now that it is out. There will still be offices, and people will still attend in person. I'm just not sure if it will ever be "The Norm" again. Take a generic local tech company for example. Its employees are now all WFH, some enjoy it and few others don't, while some really need it for precautionary health reasons. Does HR have enough legal room to tell everyone that the health crisis is over and that they HAVE to return to an office "or else", do they get to choose who needs and doesn't need WFH? I see litigations surrounding personal safety and fairness down that road. We haven't even gotten to the part of the pandemic where there is a vaccine available, but anti-vaxxers are all over... I'm staying at home thanks... Even if the local tech company has HR figure out how to pull this off, and moves to force those workers back; the employees now have the option of other companies that WILL offer the WFH that they want. And these companies can possibly draw from state-wide or possibly even national talent pools. Those are the companies that will attract and retain the top talent.
- ergocoder 6y ago
  All superstars will leave if forced. My friend who is a staff engineer. He lives close to the office. Before covid, his kids meet with their parents often. They live close to each other. You can bet that he would not increase the risk of the grandparents getting covid. Not even by 0.0001%. It's a known risk that can be avoided. Forcing him to come back to the office will immediately result in him leaving. Working life will never be the same again.
likeabbas 6y ago
Hooray! The tennis club is spared (for now)
CommanderData 6y ago
Speaking with two business partners (UK and Aus). Retail retail rental prices have not seen a reduction due to Covid in large cities. Granted the businesses here are in retail but I would imagine rental prices to drop. My Aus partner mentions Westfield often and how arrogant their attitude has been during the crisis. Especially when many stores in these flagship centres are still closed and some even face bankruptcy.

The article's actual title—Pinterest cancels huge SF office lease in unbuilt project, citing work-from-home shift—was 6 characters too long.

deleted 6y ago
[deleted]
dang 6y ago
I've put the comma back in and sacrificed SF.

lsb 6y ago

Notably, they paid $90M to cancel the lease.

stingraycharles 6y ago
Which is perfectly normal between businesses; pay $90MM to get rid of a $440MM lease contract. Heck, as a consumer, if I want to get rid of my car lease I need to pay a hefty penalty as well.
- lsb 6y ago
  For a company to pay almost a hundred million dollars to not rent office space in downtown SF, that's the abnormal part, compared to 2010-2019.
  - the-dude 6y ago
    Are you suggesting they would have walked free between '10-'19 ? I am quite certain they wouldn't have.
    - iso947 6y ago
      10-19 they would never have got rid of space - and arguably other potential tenants would have paid them to relinquish their rights
      - ulfw 6y ago
        Exactly that. They could have easily found another renter/sublet it for no money lost (potentially even gained) those days.
      - sulam 6y ago
        Yep, one company I work with closely made something like $16M through subleasing or leaseback (I forget the exact arrangement) in early 2019 after they decided to reduce their office footprint.
- Hnrobert42 6y ago
  The notable part is not that they had to pay it. It’s that they chose to pay it. It reveals the magnitude of shift to WFH.
  - HenryBemis 6y ago
    Assumption: same performance, increased employee satisfaction, lower costs, fewer expenses (company and employees). Companies now just need a skeleton crew for IT Ops, HR, Accounting. Especially for companies like Pinterest that have probably seen their revenue explode, it's a win win win.
    - tonyedgecombe 6y ago
      Has their revenue exploded? I thought advertising revenue was down this year.
      - ckdarby 6y ago
        Etsy & Pinterest are both public companies and this info can be found in their quarterly filings. TL;DR Yes, revenue has increased. Etsy is spending very strong in advertising with Pinterest getting large amounts of it. Disclaimer: Position in both companies.
        tonyedgecombe 6y ago
        Actually it seems to have flattened off: https://www.statista.com/statistics/995107/pinterest-quarterly-revenue-worldwide/ https://www.statista.com/statistics/995107/pinterest-quarter...
        ckdarby 6y ago
        I didn't entirely write what I meant correctly. Etsy's revenue has greatly increase: https://www.statista.com/statistics/409407/etsy-quarterly-revenue/ https://www.statista.com/statistics/409407/etsy-quarterly-re... A lot of Etsy's money did go to advertising. This has ended up in Pinterest's pocket. The fact Pinterest is flat during covid and entirely being an advertising company I consider still growth of revenue. The global advertising spend has greatly decreased, it'll eventually pick back up. But, yes, you are entirely correct, on a direct statement level, revenue is flat.

iso947 6y ago

Office management companies are worried. In the UK they, as well as commuting companies like Daily Mail Group, and overpriced sandwich shops like Pret, have realised their entire company is reliant on millions of sheep trudging 2 hours a day to an office block with no space to fight for a desk to have a day’s worth of meetings on skype. A large anti WFH campaign run by the people behind brexit and linked to trumps campaign is set to start next month in the UK (the feelers you’re judge public mood have already gone out)

lbotos 6y ago
link to info for this campaign?
- evgen 6y ago
  Info on the government campaign to get people back to offices? See any UK newspaper for past week or BBC. The controversy regarding the hypocrisy of government agencies telling people to go back to offices (under pressure from biz groups who represent the various chains that survive off these commuters) while their own workers are WFH? Look to any newspaper from past three or four days for that one. Contra the earlier claim the Daily Mail group is not among those pushing for a return to regular commuting, other than their desire to parrot the Tory party line; in fact, they had one of the more pointed push-backs by showing that the same ministry that was telling companies to return workers to offices had less than 10% of its own employees working in the office (feels somewhat dirty posting a daily mail link, but it does reveal a bit of the controversy https://www.dailymail.co.uk/news/article-8675573/Just-5-workers-returned-Business-Secretary-Alok-Sharmas-office.html https://www.dailymail.co.uk/news/article-8675573/Just-5-work...)
  - davidgerard 6y ago
    safe link: https://web.archive.org/web/20200829123525/https://www.dailymail.co.uk/news/article-8675573/Just-5-workers-returned-Business-Secretary-Alok-Sharmas-office.html https://web.archive.org/web/20200829123525/https://www.daily... There's a bit of politics there - the Daily Mail are still right-wing xenophobes, but the present editor doesn't like the Johnson/Cummings team at all, and takes shots at them whenever he can.

macspoofing 6y ago

What shift? The pandemic?

mherrmann 6y ago

I see a lot of vacant street-level real estate here in Vienna, Austria. These used to be shops and restaurants that I suppose we already on the brink before the crisis. Does anybody have an idea what will happen to all this space after the crisis is over?

ulfw 6y ago
New entrepreneurs will open their little boutiques or coffee shops or whatever else in them
- op00to 6y ago
  You don’t think they will be replaced by huge chains that are able to weather the poor economy?
  - trebligdivad 6y ago
    The huge chains aren't doing much better at the moment; they're hunkering down and closing lots of shops.
  - graeme 6y ago
    There’s no magic in a huge chain. If locations don’t make money, they close them. Space tends to go to places with a profitable use.
    - mc32 6y ago
      Exactly. Witness Lord & Taylor or it’s parent company. Or Starbucks having to close down shops. A closed shop is a closed shop even if the parent co survives.
      - dominotw 6y ago
        cheesecake factory
    - WillPostForFood 6y ago

Guthur 6y ago

I'm wondering if we are on the verge of a commercial property apocalypse. If rents are eventually forced down in large metropolitan areas it will wipe out billions of dollars in property wealth. Could make the GFC look like a blip.

godzillabrennus 6y ago
Commercial real estate is around a $16T industry in the USA: https://www.reit.com/data-research/research/nareit-research/estimating-size-commercial-real-estate-market-us https://www.reit.com/data-research/research/nareit-research/... Even with a correction in demand there will still be value in the property. The industry will not be wiped out.
- DevX101 6y ago
  30% market correction will effectively wipe out many players in commercial real estate. Even less than that for many. Keep in mind, real estate is often highly levered so these property owners still have to pay a bank their money.
  - baskire 6y ago
    They’d just be underwater. But if the property is cash flow positive, over time they’d recover.
- treyfitty 6y ago
  There’s evidence of properties in NYC which have been vacant for 7+ years. These properties, even with the pandemic, have not budged their rent. They simply do not care if they’re not making money. They would rather preserve their capital, bank on appreciation, and not deal with tenants than fall prey to deflationary pressures. The only explanation is the prevalence of some form of money laundering, an area I’m not an expert in.
  - pstuart 6y ago
    Not an expert either, but money laundering does seem to like real estate.

deleted 6y ago

[deleted]

m0llusk 6y ago

Some potentially interesting or amusing details: This project would make use of a tennis club. Club members and tennis enthusiasts pressured the developers to make room for a series of underground tennis courts so valuable recreation space would not be lost, except of course during construction. Also, Pinterest has two other large buildings nearby one of which was built such that it can be extended upward as needed. Both of these buildings are now essentially empty.

shuckles 6y ago
Part of why they weren’t fully built out is that San Francisco’s Prop M caps the square footage of office space which can be built in any given year.

eezurr 6y ago

Many commercial properties and apartment complexes are owned by pension funds and REITs. There is an incentive to keep increasing profits to gain customers, payout the pension costs, etc. What will happen if retirees lose this income? Or on the flip side, how will cities be affected when its citizens' income is not siphoned away from the city?

SpicyLemonZest 6y ago

I think this is less of a seismic shift than a lot of people are reading, since the building in question isn't expected to finish construction for years. I think even the most pro-office people would admit that pre-pandemic forecasts of office needs 3 years in the future are now unreliable.

ghaff 6y ago
As a company, you don't need to be committing to 100% remote to take the very prudent step of putting any real estate expansion plans on hold for which it makes financial sense to do so. If nothing else, it's a fair bet you'll have more negotiating leverage in 6 months or a year.
- baskire 6y ago
  Exactly. Pinterest still is holding onto existing sf office space. They are right that it probably doesn’t make sense to pay top dollar for this spot when other spaces in east bay, South Bay and Seattle are cheaper with access to same talent. The Bay Area will still thrive but sf proper-city will have a rough time

thrwn_frthr_awy 6y ago

I'm curious if newly remote employees are getting monthly stipends for internet and electricity? Is that pretty normal or are those costs being pushed on to the employee?

sulam 6y ago
If your employer _requires_ you to WFH, say because their office is not open due to COVID-19, California law requires you to be reimbursed for reasonable expenses associated with WFH, including Internet access. Many employers already had this kind of reimbursement in place, though.
- thrwn_frthr_awy 6y ago
  Interesting. I was the only remote person (by choice) on a team before covid. Now the whole team is remote because of closed offices in LA. Feels weird to now start expensing these things only while the office is closed, but it sounds legally I could?
  - sulam 6y ago
    Legally you absolutely could. It’s like anything else you expense in the course of doing your job. In fact your HR/exec team is falling down on the job if they haven’t announced new policies, since your office is closed.
- quiescant_dodo 6y ago
  Hmm, that describes me but without reimbursement. Is there a handy website / reference you know of? I'd like to bring this up with my employer.
  - sulam 6y ago
    A quick google found a law firm that analyzes it from the employer perspective, but it’s a good guide to the law and whether or not you should be covered: https://www.mintz.com/insights-center/viewpoints/2226/2020-05-08-refresher-california-reimbursement-requirements-covid-19 https://www.mintz.com/insights-center/viewpoints/2226/2020-0...

adrianmonk 6y ago

The big question that nobody can answer is whether this shift is permanent. Part of the shift comes from the fact that we are in a temporary, exceptional situation. However, views about remote work may have been changed through first-hand experience. People have been working in offices for literally thousands of years. It would be an epic, once-in-a-millennium historical change if we moved away from that. But that doesn't mean it's impossible. People have also been using paper for the written word for literally thousands of years, and we've made a partial but permanent shift away from that. Maybe remote work will follow a similar pattern.

cblconfederate 6y ago
people have been working in offices for a few decades. Before that they worked in factories, before that they worked at home, either in the field, or in the shop in front of their house (roman times). Whether it's permanent or not depends on how much energy has been expended to switch habits. Once people settle in a new routine, there are some benefits of remote work that are simply irresistible and probably irreversible (such as taking back control of time).

papito 6y ago

People will still need to get out of the house. I hate working from home. I need my commute to wake me up, but not TOO much of it. I think the future might be shared work spaces (WeWork) but in suburbia - so people can come to work, but not necessarily having to spend 4 hours a day on a commuter train.

toomuchtodo 6y ago
I’d like to see communities support non profit coworking spaces to attract talent. Like a library, with wifi, printers, a coffee bar, and a few EV charging parking spots. My coworking space has these amenities, I happily provide financial support. The days of communities catering to businesses to move to them is over. Cater to remote workers (Tulsa, OK has a great campaign for this). They’re the ones bringing dollars.
echelon 6y ago
> People will still need to get out of the house. I'm not sure if you're in a California city mindset, but it's easy if you move to a suburb of a city like Atlanta. You can have over an acre of wooded land and be less than an hour's commute to the city. It's super affordable too. 300k gets you 3000sqft and sometimes more. If you're willing to pay double, you can have the same within thirty minutes of the city. And there are still spacious priorities within the city limits.
- ethbro 6y ago
  If you don't need a decent school zone, can confirm. 38 minutes from downtown. 3 acre wooded lot. 1900 sq ft house (currently refinishing full basement). $135 when I bought, probably $200 now. In the process of selling a much more expensive intown house, because there's no point. The biggest things suburbs need to do these days is revolutionize malls. Tear up all the parking and retrofit empty store space into community-centric things people actually want. Big box -> co-working space, as new anchor tenant.
  - paul_f 6y ago
    Interestingly, if you go north of Atlanta, you can find examples of the new "downtown" areas that have been built in the last few years to replace malls. Avalon: https://www.experienceavalon.com/ https://www.experienceavalon.com/ Halcyon: https://www.visithalcyon.com/ https://www.visithalcyon.com/ Alpharetta City Center: http://www.citycenteralpharetta.com/ http://www.citycenteralpharetta.com/ All 3 within 5 miles of each other

fencepost 6y ago

It'll also be interesting to see the impact on housing. Lots of people probably don't have the space to set up for working from home well, particularly if you're talking about families with 2 people working plus kids doing some amount of remote schooling. Single? Viable. Young couple in a 1-bedroom apartment? Who's working at the new desk in the bedroom and who's at the kitchen table? Add a couple kids in and it just gets tougher. Even if they weren't doing it before people are now going to be looking for an extra office-suitable bedroom.

mmckelvy 6y ago
If you no longer have to commute to an office, presumably you can swap that 1 bedroom apartment for a house located a bit further afield.
- bobthepanda 6y ago
  that's assuming the only thing driving your desire for a 1 bedroom apartment is the desire to be next to an office. the current situation is weird in that COVID has disrupted nearly all non-home spaces, not just the office. But once restaurants, theaters, museums, nightlife etc. are back in business some will still desire to be near activities they're doing all the time. I'm personally interested in how this will really impact important working "third places" like coffee shops, libraries, and WeWork style spaces once people are allowed to go to those again.
- ffggvv 6y ago
  i’m confused why people have this impression... isn’t the expectation for the vast majority of people that the second this pandemic ends, were expected back in the office? and if that’s the case i can’t really go and buy a home in the suburbs

vondur 6y ago

I keep thinking this does not bode well for California. As more of these software companies embrace work from home, we may see an exodus of high paying jobs leaving the state for locations that are cheaper and better run. California currently gets a large chunk of the state budget from income tax.

nerdponx 6y ago
I wonder about if/how this will affect New York as well. It's probably good for the USA in the long run to have more remote work and/or more tech jobs spread out across smaller cities. But there might be adverse implications for the areas stand to lose their statuses as "tech hubs".
mandeepj 6y ago
Remote work does not mean you get away with State income tax.
- what_ever 6y ago
  Companies will change policies to reflect the work location as the office location. So the state income tax issue would be sorted.
  - mandeepj 6y ago
    Will? My friend let’s talk in the present. Cheaper location move can also mean less pay https://www.marketwatch.com/story/facebook-employees-may-face-pay-cut-if-they-move-to-cheaper-areas-to-work-from-home-2020-05-21 https://www.marketwatch.com/story/facebook-employees-may-fac...
    - shajznnckfke 6y ago
      Yeah, if you’re trying to establish residency in another state, you probably need to tell your employer to use that state for your W2 so they stop deducting state tax and so California doesn’t think you still are earning money there. That means your employer knows you moved, and knows you’re saving all that money, so they will probably lower your pay. I think you can still come out ahead if you have a ton of stock to vest, because they can’t cut that, but you still benefit from the lack of state tax there. But once the plague situation ends I think WFH employees will be in a weaker position and tend to get smaller refresh grants. It could be a great one-year-only move for anyone who’s due for a windfall from one of these IPOs.

cblconfederate 6y ago

Bay area employees have a strong incentive to return to the office, since a major shift in location of their companies will lead to a major shift in their compensation, fast. It's likely that the rest of the world , cash starved, will move faster to embrace remote. Inevitably it seems in the medium term even bay area will be dragged along.

kc-rush2049 6y ago

I think that some of this WFH stuff is like Pandora's box. Employers are not going to be able to stuff it all back in the box now that it is out. There will still be offices, and people will still attend in person. I'm just not sure if it will ever be "The Norm" again. Take a generic local tech company for example. Its employees are now all WFH, some enjoy it and few others don't, while some really need it for precautionary health reasons. Does HR have enough legal room to tell everyone that the health crisis is over and that they HAVE to return to an office "or else", do they get to choose who needs and doesn't need WFH? I see litigations surrounding personal safety and fairness down that road. We haven't even gotten to the part of the pandemic where there is a vaccine available, but anti-vaxxers are all over... I'm staying at home thanks... Even if the local tech company has HR figure out how to pull this off, and moves to force those workers back; the employees now have the option of other companies that WILL offer the WFH that they want. And these companies can possibly draw from state-wide or possibly even national talent pools. Those are the companies that will attract and retain the top talent.

ergocoder 6y ago
All superstars will leave if forced. My friend who is a staff engineer. He lives close to the office. Before covid, his kids meet with their parents often. They live close to each other. You can bet that he would not increase the risk of the grandparents getting covid. Not even by 0.0001%. It's a known risk that can be avoided. Forcing him to come back to the office will immediately result in him leaving. Working life will never be the same again.

likeabbas 6y ago

Hooray! The tennis club is spared (for now)

CommanderData 6y ago

Speaking with two business partners (UK and Aus). Retail retail rental prices have not seen a reduction due to Covid in large cities. Granted the businesses here are in retail but I would imagine rental prices to drop. My Aus partner mentions Westfield often and how arrogant their attitude has been during the crisis. Especially when many stores in these flagship centres are still closed and some even face bankruptcy.