4 ms·

So un-own the buildings?

by Yhippa 3y ago

rxyz 3y ago
Unfortunately, some of them are buying even more. I know Google spent at least 4B on purchasing office real estate in 2022, probably more
afavour 3y ago
Sell at a loss, you mean? Why do that when you can just force employees to come back into the office?
- mdgrech23 3y ago
  Seems like a sunk cost fallacy to keep these buildings at this point. For those buildings their heating/cooling/upkeep costs have to be huge. Honestly we should probably have government intervention at this point. Government buys the houses at market values and turns them into affordable housing to counter the housing crisis.
  - nostrademons 3y ago
    That also doesn't work. It costs more to convert an office building to housing than it does to tear it down and build new condos in its place, which in turn costs more than just building new condos in a different location. All the plumbing/HVAC/electrical systems need to be redone, you need ventilation isolation, there are different load capacities, etc. Plus if remote work really takes off, there's no need to crowd all those people into the downtown cores of a few cities anyway. It'd shift housing demand to cheaper, more naturally desirable locations. What'll happen is that a few firms with ineffective cost structures will go bankrupt, a few major cities will become hollowed-out wastelands the way NYC was in the 1970s or Boston was in the 1950s, and economic growth will pick up in other areas, with new startups and new desirable hubs.
    - polygamous_bat 3y ago
      > It costs more to convert an office building to housing than it does to tear it down and build new condos in its place, which in turn costs more than just building new condos in a different location. Except in SF or NYC, there aren't that many desirable "different locations" left. Which is why freeing up the poorly used space in city centers can be a net positive for society rather than keeping to maintain these white elephants.
- arbitrary_name 3y ago
  How does that improve anyone's financial position? Have you heard of sunk cost fallacy?
  - afavour 3y ago
    I'm suggesting that the execs in charge of these decisions are perhaps not approaching the issue rationally.
  - robertlagrant 3y ago
    Yes, but the existence of a fallacy doesn't mean it applies here. If people can be convinced to go back to the office the company won't lose millions of dollars. Is that a sunk cost then?
- Workaccount2 3y ago
  Corporate buildings are usually leased, even if it is just one occupant. These lease terms are also usually 10 years.

So un-own the buildings?

by Yhippa 3y ago

So un-own the buildings?

rxyz 3y ago

Unfortunately, some of them are buying even more. I know Google spent at least 4B on purchasing office real estate in 2022, probably more

afavour 3y ago

Sell at a loss, you mean? Why do that when you can just force employees to come back into the office?

mdgrech23 3y ago
Seems like a sunk cost fallacy to keep these buildings at this point. For those buildings their heating/cooling/upkeep costs have to be huge. Honestly we should probably have government intervention at this point. Government buys the houses at market values and turns them into affordable housing to counter the housing crisis.
- nostrademons 3y ago
  That also doesn't work. It costs more to convert an office building to housing than it does to tear it down and build new condos in its place, which in turn costs more than just building new condos in a different location. All the plumbing/HVAC/electrical systems need to be redone, you need ventilation isolation, there are different load capacities, etc. Plus if remote work really takes off, there's no need to crowd all those people into the downtown cores of a few cities anyway. It'd shift housing demand to cheaper, more naturally desirable locations. What'll happen is that a few firms with ineffective cost structures will go bankrupt, a few major cities will become hollowed-out wastelands the way NYC was in the 1970s or Boston was in the 1950s, and economic growth will pick up in other areas, with new startups and new desirable hubs.
  - polygamous_bat 3y ago
    > It costs more to convert an office building to housing than it does to tear it down and build new condos in its place, which in turn costs more than just building new condos in a different location. Except in SF or NYC, there aren't that many desirable "different locations" left. Which is why freeing up the poorly used space in city centers can be a net positive for society rather than keeping to maintain these white elephants.
arbitrary_name 3y ago
How does that improve anyone's financial position? Have you heard of sunk cost fallacy?
- afavour 3y ago
  I'm suggesting that the execs in charge of these decisions are perhaps not approaching the issue rationally.
- robertlagrant 3y ago
  Yes, but the existence of a fallacy doesn't mean it applies here. If people can be convinced to go back to the office the company won't lose millions of dollars. Is that a sunk cost then?
Workaccount2 3y ago
Corporate buildings are usually leased, even if it is just one occupant. These lease terms are also usually 10 years.