4 ms·

> bottom line is commercial real estate (CRE) is screwed and the sole driver of all of this I've seen several people point to this narrative on HN and it just

> bottom line is commercial real estate (CRE) is screwed and the sole driver of all of this I've seen several people point to this narrative on HN and it just doesn't make any sense. There's three possibilities as I see it: 1) There's some secret cabal of people who run the world and they've decided that commercial real estate needs to thrive, for some reason. So these overlords go to their puppets running major companies like Microsoft, Amazon and Dell and tell them they must make their workers return to the office in the name of propping up commercial real estate. Apparently some people on HN think this is likely? 2) The managers at Dell/Amazon/etc. feel the need to prop up commercial real estate as an act of charity. Rather than focusing on their own businesses, they are worried about their friends in commercial real estate. This seems even less likely than 1. 3) Managers at major companies believe that there are benefits to working together in person. Why are people so reluctant to accept option 3? You don't even need to accept the premise that working from the office is better. You just need to accept that premise that management believes it's better to be a proponent of this option.

coredog64 3y ago
Allegedly, Amazon forced RTO because there were tax incentives that required butts-in-seats. I don’t think they are a cabal of puppet masters, but that does go some ways towards point #1.
Kerrick 3y ago
Couldn't there be an Option 4 like this? 4) Some companies have a significant amount of capital tied up in CRE. Preventing its value from going to from $X to $0 is valuable to the tune of $X. There is no apparent cost to the C-suite in enforcing RTO. So for no cost, you can save $X. It's simple, non-complex, and tied to obvious incentives.
- bityard 3y ago
  Dell probably owns SOME real estate but their business is making computers and shit, not renting and selling property. They have no incentive to increase the value of any property they hold. Like most large businesses, they likely rent the vast majority of their offices so falling rent would actually benefit them. I'm as much of a WFH proponent as the next guy but blaming CRE on the latest return-to-office movement is some crazy conspiracy theory stuff.
  - oblio 3y ago
    Dell doesn't own a ton. However, who are Dell's the main shareholders? Do they have any vested interest in commercial real estate? Are they associated in other ventures with people who have a vested interest in commercial real estate?
    - grepfru_it 3y ago
      Go lookup Dell Capital.
      - oblio 3y ago
        Frankly, I don't want to, but based on the other comments, you've proven my point :-)
  - MerManMaid 3y ago
    >Dell probably owns SOME real estate but their business is making computers and shit, not renting and selling property. You would think... Dell is a subsidiary to "Dell Capital" who's portfolio also boasts at least a 10B stake in real estate. (Primarily CRE) https://www.prnewswire.com/news-releases/bdt--company-and-msd-partners-to-combine-as-the-preeminent-advisory-and-investment-firm-serving-family--and-founder-led-business-owners-and-strategic-long-term-investors-301654544.html https://www.prnewswire.com/news-releases/bdt--company-and-ms...
jerf 3y ago
"There's some secret cabal of people who run the world and they've decided that commercial real estate needs to thrive, for some reason." The reason is easy to figure out: "Holding a lot of Commercial Real Estate assets". There's literally trillions of dollars at stake here. I would personally propose that the alternative that the people holding this trillions of dollars of assets are just sitting back and watching their entire market collapse placidly, with it never occurring to them to call in favors, use political power, buy lobbyists, buy PR, and literally everything else possible to save that money, is the crazy idea. It requires me to believe that the 0.001% are just so amazingly honest and fair-minded that they will calmly accept the judgment of the market that their assets are no longer required. This is not a position I see a lot of evidence for. The only thing that surprises me is that we haven't seen a lot of call for some sort of regulation that accidentally whoopsydoopsy can only be conformed to by workers in offices whoknew what a surprise and shocking unexpected consequence. Keep an ear out for it, I wouldn't be surprised to see this tried in the next year or two. Their situation is pretty dire. It hasn't even been all that secret either: https://www.forbes.com/sites/jackkelly/2022/02/17/new-york-city-mayor-eric-adams-calls-for-companies-to-quickly-bring-workers-back-to-the-office/?sh=1e22a14f48a4 https://www.forbes.com/sites/jackkelly/2022/02/17/new-york-c... I'm not citing that as proof, just evidence. There's plenty of money at stake in this matter.

coredog64 3y ago

Allegedly, Amazon forced RTO because there were tax incentives that required butts-in-seats. I don’t think they are a cabal of puppet masters, but that does go some ways towards point #1.

Kerrick 3y ago

Couldn't there be an Option 4 like this? 4) Some companies have a significant amount of capital tied up in CRE. Preventing its value from going to from $X to $0 is valuable to the tune of $X. There is no apparent cost to the C-suite in enforcing RTO. So for no cost, you can save $X. It's simple, non-complex, and tied to obvious incentives.

bityard 3y ago
Dell probably owns SOME real estate but their business is making computers and shit, not renting and selling property. They have no incentive to increase the value of any property they hold. Like most large businesses, they likely rent the vast majority of their offices so falling rent would actually benefit them. I'm as much of a WFH proponent as the next guy but blaming CRE on the latest return-to-office movement is some crazy conspiracy theory stuff.
- oblio 3y ago
  Dell doesn't own a ton. However, who are Dell's the main shareholders? Do they have any vested interest in commercial real estate? Are they associated in other ventures with people who have a vested interest in commercial real estate?
  - grepfru_it 3y ago
    Go lookup Dell Capital.
    - oblio 3y ago
      Frankly, I don't want to, but based on the other comments, you've proven my point :-)
- MerManMaid 3y ago
  >Dell probably owns SOME real estate but their business is making computers and shit, not renting and selling property. You would think... Dell is a subsidiary to "Dell Capital" who's portfolio also boasts at least a 10B stake in real estate. (Primarily CRE) https://www.prnewswire.com/news-releases/bdt--company-and-msd-partners-to-combine-as-the-preeminent-advisory-and-investment-firm-serving-family--and-founder-led-business-owners-and-strategic-long-term-investors-301654544.html https://www.prnewswire.com/news-releases/bdt--company-and-ms...

jerf 3y ago

"There's some secret cabal of people who run the world and they've decided that commercial real estate needs to thrive, for some reason." The reason is easy to figure out: "Holding a lot of Commercial Real Estate assets". There's literally trillions of dollars at stake here. I would personally propose that the alternative that the people holding this trillions of dollars of assets are just sitting back and watching their entire market collapse placidly, with it never occurring to them to call in favors, use political power, buy lobbyists, buy PR, and literally everything else possible to save that money, is the crazy idea. It requires me to believe that the 0.001% are just so amazingly honest and fair-minded that they will calmly accept the judgment of the market that their assets are no longer required. This is not a position I see a lot of evidence for. The only thing that surprises me is that we haven't seen a lot of call for some sort of regulation that accidentally whoopsydoopsy can only be conformed to by workers in offices whoknew what a surprise and shocking unexpected consequence. Keep an ear out for it, I wouldn't be surprised to see this tried in the next year or two. Their situation is pretty dire. It hasn't even been all that secret either: https://www.forbes.com/sites/jackkelly/2022/02/17/new-york-city-mayor-eric-adams-calls-for-companies-to-quickly-bring-workers-back-to-the-office/?sh=1e22a14f48a4 https://www.forbes.com/sites/jackkelly/2022/02/17/new-york-c... I'm not citing that as proof, just evidence. There's plenty of money at stake in this matter.