10 ms·

i still think every single one of these return to office orders are from investors that are heavily portfolio'd (new word!) in commercial real estate and are tr

i still think every single one of these return to office orders are from investors that are heavily portfolio'd (new word!) in commercial real estate and are trying to keep the bubble from bursting like it should. There is soooo much vacant office space right now and no one is lowering prices like should happen with this much surplus.

skybrian 3y ago
It seems hard to believe that a company’s managers would want to do their landlords a favor by paying more rent when they don’t have to. How would investors even ask for that?
- coffeebeqn 3y ago
  The theory was that they are also the landlords
- adastra22 3y ago
  I hear you’re looking to raise another round. It’d be a real shame if a board member got in the way of that.
- mschuster91 3y ago
  "We happen to have some cheap rental space near other companies we own, no credit checks, and you're near <insert other SaaS companies that can be used so you have close accss to them>" If you're a startup, getting office space without much bullshit is worth a premium.
- danjac 3y ago
  Where else are the investors investing?
- foepys 3y ago
  > How would investors even ask for that? What do you mean "ask"? They demand because it's their capital that fuels the company. It's not like a VC gives money to a company and then cannot do anything but wait for returns.
- choeger 3y ago
  Investors are the landlords, if indirectly. To be honest, I always wondered how much of the venture capital would turn into revenue for other investments. Assume, you own Microsoft stock and are a venture capitalist. How do you react to your latest investment considering to buy AWS vs. Azure? The same pattern might apply in many more direct forms. Where does that fruit basket come from? What headhunting agancy do you trust with your top-level hiring? I wouldn't be surprised if most VCs would mitigate their risks by funneling a startup's expenses back to their own investmentsnin one way or another. Vacant office space is just another such investment.
- cashsterling 3y ago
  As folks have said... investors are not actually concerned about the companies they invest in... they are concerned about the balance sheet of their portfolios. Real Estate holdings going deeply negative may affect their balance sheet more than one or two or all of their companies carrying extra lease OpEx. I am involved in a real estate selection process right now and I can definitely see this sort of stuff going on. I don't like it but folks with the money make the rules.
brigadier132 3y ago
Yes, I believe this conspiracy theory too. All of the vcs are double dipping, they own a ton of real estate in sf and invest in sf based companies because they know they get the money back through rent
- refulgentis 3y ago
  It does seem unlikely the SF VC exists due to SF real estate, interesting theory though, I'm all ears.
  - brigadier132 3y ago
    I mean, you are adding more to my claim by stating it "exists due to SF real estate". I never said that's the only reason it exists, but you know what, that might be the only reason it's so hyper localized to one place. Let's look at the incentives: Pretend you are a wealthy VC with tens of millions invested in San Francisco real estate. You have been given billions by LPs to manage. If I, as the person that has control over how this money can be distributed, only invest those billions in the bay area and bring all these high skilled workers to this one place I can actually impact the price of real estate and triple the tens of millions I already have invested. Once those high skill workers move here they will remain, even after the initial startup goes under because they will move to a different startup. Now if all the VCs are doing this and they all control large multi billion dollar funds...
- jack_riminton 3y ago
  VC's investing in real estate, that a new one. Care to share any data or sources on that?
  - edu 3y ago
    Any good investor will diversify their investments, so maybe the funds themselves are not investing in real date but the investors of the funds and probably the managers do it.
  - api 3y ago
teaearlgraycold 3y ago
Definitely some of that going on, and SF government begging companies to bring workers back downtown. But also, and I feel this even as an IC, working in person is better for the company and for some types of people. I work much better in person, company culture can actually exist in person, career development is easier.
bparsons 3y ago
I think this is right. It is also a tactic to increase attrition without having to announce layoffs. A big chunk of people will just move jobs instead of wasting 10-15 hrs a week to a commute.
whywhywhywhy 3y ago
Or maybe instead of a conspiracy companies are just finding work isn't getting done and although people are loudly proclaiming productivity the work isn't materializing.
- Racing0461 3y ago
  nah because if it was about productivity, the rto emails would emphasize that. not "helping out our neighbour restaurants and city centers"
- ethanbond 3y ago
  So where are all the studies showing this precipitous drop in productivity? Surely those would be cited to support RTOs right?
  - injb 3y ago
    Why? Why would an employer care about studies? They have either seen a drop in productivity or they haven't. They couldn't care less about what other employers are experiencing.
    - p_j_w 3y ago
      > They have either seen a drop in productivity or they haven't. Some of them are claiming that they have, but none have shown anything resembling evidence or numbers, there’s been nothing but hand waving about the value of water cooler talk. There’s no reason to believe a word they’re saying.
      - deleted 3y ago
        [deleted]
      - voisin 3y ago
        Employers have no obligation to provide studies. They set the rules if they pay the salaries. Employees can choose to leave. In the end, the decisions by both will determine winners and losers. That’s a market!
FoxBJK 3y ago
I think it's going to burst regardless. Plenty of companies have fully embraced the remote model, and many more are only doing hybrid. Even if they don't completely sell off their buildings they're not going to use as much. One company in my city is already closing their HQ and reorganizing their other offices: https://www.cleveland.com/news/2023/07/progressive-to-close-main-headquarters-stay-in-mayfield.html https://www.cleveland.com/news/2023/07/progressive-to-close-...
api 3y ago
It’s also a tactic to do a mass layoff without doing a layoff. Return to office, people quit, no layoff politics or severance needed. I’ve even heard of companies doing this and then quietly backpedaling on return to office requirements once they’ve shed some staff. Terrible strategy since the people who leave are likely to be more experienced or higher performers able to land remote jobs more easily. It’s also slimy.
knbrlo 3y ago
This is exactly it. When you see story after story from corporate news outlets, pushing the idea that work from home causes all these mental health issues for everyone, work from home is isolating, work from home is bad for the company. It’s all because there is a vested interest somewhere. When you understand their base motivations, you understand why certain stories are ran on the news and others are not. Their base motivations are always money. For some organizations, they do care about money, and people which is a shocking thing and yes it can be done. If employees are making their performance requirements, and the choices left to the employee that seems like the best case to support people and profit. It’s when that choice is taken away from people that you know the pure motivation is a vested interest in commercial real estate somewhere. Also, no amount of complaining online is going to change any of this. News outlets have armies of reporters and endless amounts of money to run story after story until the narrative becomes what they want it to be. So, stepping out of the negative mindset for just a minute, just go work somewhere else that’s remote.
- rozal 3y ago
  [dead]
- jasonhansel 3y ago
  Do you have any actual, hard, direct evidence to support the claim that there is some deliberate, large-scale campaign by the media to propagate such (alleged) false narratives? If there were, it would have to be a conspiracy involving hundreds of people across (or within) a large number of news outlets; there would be no way to keep that a secret. It's quite possible that people have good-faith reasons for disagreeing with you and writing stories expressing perspectives that you dislike.
  - y-c-o-m-b 3y ago
    The question doesn't really make sense though. Who is going to come out and admit to this? It's a subjective topic that's been carefully crafted to avoid backlash, so you're not going to get actual hard direct evidence. Ever read the "work-life" articles for this topic on the BBC website? They are so obviously hit pieces against remote working that it almost forces you to think there's a campaign against it, whether you want to believe it or not.
kfrzcode 3y ago
I can appreciate the coinage of novel lexicology moreso than many, but I'd be remiss if I didn't point out the exacting nature of "invested" as an extant nomination of the given subject and thier relationship to the noun
faangiq 3y ago
Yep 100%. Get those wageslaves back in our buildings buying our overpriced sandwiches.
School-Cotton 3y ago
> i still think every single one of these return to office orders are from investors that are heavily portfolio'd (new word!) in commercial real estate and are trying to keep the bubble from bursting like it should. Is there any actual evidence of this? Why do you believe it?
deleted 3y ago
[deleted]
porlb 3y ago
VCs do like to stack their imaginary value stores like Russian dolls https://youtu.be/NVVsdlHslfI https://youtu.be/NVVsdlHslfI
cj 3y ago
Many of those investors (who sit on company boards) also participated in the decision to sign those 10 year leases or outright purchase or build massive offices. Rather than looking stupid by having hugely expensive, empty, office space that you’re contractually obligated to keep paying for because of a decision you made pre-Covid, you encourage the he company to utilize so the asset doesn’t sit unused. (For better or worse) If you purchased or built the office, it might hurt your balance sheet to sell the asset at a loss. That loss might be greater than the cost of filling the office with people. I could see a CFO making a pretty compelling argument like this to a board filled with investors.
- deleted 3y ago
  [deleted]
de6u99er 3y ago
I would add companies that invested into fancy office space, which is hard to justify because nobody wants to use it.
voisin 3y ago
What percentage of venture capital firms do you think have real estate funds attached? I am betting quite a small percentage given that the risk and return profiles are dramatically different. And even where a parent fund owns both VC funds and real estate funds, how many VC fund managers do you think would sacrifice returns (the argument by pro-WFHers is that everyone is more productive at home) and consequently their promotes in favour of their sister-real estate fund managers’ returns? I am guessing none. I just think this whole argument is so far fetched as to border on idiotic.
hodgesrm 3y ago
> i still think every single one of these return to office orders are from investors that are heavily portfolio'd (new word!) in commercial real estate and are trying to keep the bubble from bursting like it should. I run a fully distributed company where work from home is standard. It works for us but has major downsides related to sharing of information that we struggle with every day. We have to overcommunicate every decision to ensure everyone gets the memo. Plus collaborative problem-solving is very hard, especially when the team crosses timezones. It's a constant threat to our competitiveness. At a more basic level, many people simply can't stay motivated or work productively a fully distributed environment. This reduces the pool of people to whom we can offer jobs. I love work from home and we have no plans to change. At the same time I am skeptical that it is a general solution that can work across the entire economy. It's just too difficult to manage.
- karmakurtisaani 3y ago
  > At a more basic level, many people simply can't stay motivated or work productively a fully distributed environment. I wouldn't trust a person like this to work very well in the office either to be honest. Your company and approach sound great tho, you must be saving a ton in office space expenses.
  - hodgesrm 3y ago
    Thanks! It works for us. We're also saving because we're not in Silicon Valley or any of the other high cost tech centers like New York or Seattle. It's harder to do bootstrapped companies in those locations and be profitable.
- wokwokwok 3y ago
  > It's just too difficult to manage. Bold words. I've heard plenty of people with various opinions on this, but I suspect that you've cut to the heart of it here. It's not that it can't work. It's just harder to make it work. ...and that hard work has to be done by people who previously just sat everyone in a room and expected them to do their things with no additional effort required; and having to do that extra effort on top of what they normally do is uncomfortable for them. There's no denying that remote work makes some people's lives more difficult; but it indubitably makes the life of others easier. It's a trade off; and anecdotal 'it works' or 'it doesn't work' comments are just people commenting on their personal situation; what is much less clear, is if it actually has a meaningful impact at scale, or what that impact is.
glimshe 3y ago
They are avoiding entering long term contracts on the hope that prices will come back up. I don't see that happening, though.
concordDance 3y ago
Last I checked about 30% of people are better off WfH, 30% from office and the rest either hybrid or no preference. It seems possible that Zoom got more of the first sort of person.
sporkland 3y ago
SF commercial real estate prices being offered to startups are way lower. Sources: girlfriend leased office for her company pre and post covid. Also they talked about in in all-in podcast.

skybrian 3y ago

It seems hard to believe that a company’s managers would want to do their landlords a favor by paying more rent when they don’t have to. How would investors even ask for that?

coffeebeqn 3y ago
The theory was that they are also the landlords
adastra22 3y ago
I hear you’re looking to raise another round. It’d be a real shame if a board member got in the way of that.
mschuster91 3y ago
"We happen to have some cheap rental space near other companies we own, no credit checks, and you're near <insert other SaaS companies that can be used so you have close accss to them>" If you're a startup, getting office space without much bullshit is worth a premium.
danjac 3y ago
Where else are the investors investing?
foepys 3y ago
> How would investors even ask for that? What do you mean "ask"? They demand because it's their capital that fuels the company. It's not like a VC gives money to a company and then cannot do anything but wait for returns.
choeger 3y ago
Investors are the landlords, if indirectly. To be honest, I always wondered how much of the venture capital would turn into revenue for other investments. Assume, you own Microsoft stock and are a venture capitalist. How do you react to your latest investment considering to buy AWS vs. Azure? The same pattern might apply in many more direct forms. Where does that fruit basket come from? What headhunting agancy do you trust with your top-level hiring? I wouldn't be surprised if most VCs would mitigate their risks by funneling a startup's expenses back to their own investmentsnin one way or another. Vacant office space is just another such investment.
cashsterling 3y ago
As folks have said... investors are not actually concerned about the companies they invest in... they are concerned about the balance sheet of their portfolios. Real Estate holdings going deeply negative may affect their balance sheet more than one or two or all of their companies carrying extra lease OpEx. I am involved in a real estate selection process right now and I can definitely see this sort of stuff going on. I don't like it but folks with the money make the rules.

brigadier132 3y ago

Yes, I believe this conspiracy theory too. All of the vcs are double dipping, they own a ton of real estate in sf and invest in sf based companies because they know they get the money back through rent

refulgentis 3y ago
It does seem unlikely the SF VC exists due to SF real estate, interesting theory though, I'm all ears.
- brigadier132 3y ago
  I mean, you are adding more to my claim by stating it "exists due to SF real estate". I never said that's the only reason it exists, but you know what, that might be the only reason it's so hyper localized to one place. Let's look at the incentives: Pretend you are a wealthy VC with tens of millions invested in San Francisco real estate. You have been given billions by LPs to manage. If I, as the person that has control over how this money can be distributed, only invest those billions in the bay area and bring all these high skilled workers to this one place I can actually impact the price of real estate and triple the tens of millions I already have invested. Once those high skill workers move here they will remain, even after the initial startup goes under because they will move to a different startup. Now if all the VCs are doing this and they all control large multi billion dollar funds...
jack_riminton 3y ago
VC's investing in real estate, that a new one. Care to share any data or sources on that?
- edu 3y ago
  Any good investor will diversify their investments, so maybe the funds themselves are not investing in real date but the investors of the funds and probably the managers do it.
- api 3y ago

teaearlgraycold 3y ago

Definitely some of that going on, and SF government begging companies to bring workers back downtown. But also, and I feel this even as an IC, working in person is better for the company and for some types of people. I work much better in person, company culture can actually exist in person, career development is easier.

bparsons 3y ago

I think this is right. It is also a tactic to increase attrition without having to announce layoffs. A big chunk of people will just move jobs instead of wasting 10-15 hrs a week to a commute.

whywhywhywhy 3y ago

Or maybe instead of a conspiracy companies are just finding work isn't getting done and although people are loudly proclaiming productivity the work isn't materializing.

Racing0461 3y ago
nah because if it was about productivity, the rto emails would emphasize that. not "helping out our neighbour restaurants and city centers"
ethanbond 3y ago
So where are all the studies showing this precipitous drop in productivity? Surely those would be cited to support RTOs right?
- injb 3y ago
  Why? Why would an employer care about studies? They have either seen a drop in productivity or they haven't. They couldn't care less about what other employers are experiencing.
  - p_j_w 3y ago
    > They have either seen a drop in productivity or they haven't. Some of them are claiming that they have, but none have shown anything resembling evidence or numbers, there’s been nothing but hand waving about the value of water cooler talk. There’s no reason to believe a word they’re saying.
    - deleted 3y ago
      [deleted]
    - voisin 3y ago
      Employers have no obligation to provide studies. They set the rules if they pay the salaries. Employees can choose to leave. In the end, the decisions by both will determine winners and losers. That’s a market!

FoxBJK 3y ago

I think it's going to burst regardless. Plenty of companies have fully embraced the remote model, and many more are only doing hybrid. Even if they don't completely sell off their buildings they're not going to use as much. One company in my city is already closing their HQ and reorganizing their other offices: https://www.cleveland.com/news/2023/07/progressive-to-close-main-headquarters-stay-in-mayfield.html https://www.cleveland.com/news/2023/07/progressive-to-close-...

api 3y ago

It’s also a tactic to do a mass layoff without doing a layoff. Return to office, people quit, no layoff politics or severance needed. I’ve even heard of companies doing this and then quietly backpedaling on return to office requirements once they’ve shed some staff. Terrible strategy since the people who leave are likely to be more experienced or higher performers able to land remote jobs more easily. It’s also slimy.

knbrlo 3y ago

This is exactly it. When you see story after story from corporate news outlets, pushing the idea that work from home causes all these mental health issues for everyone, work from home is isolating, work from home is bad for the company. It’s all because there is a vested interest somewhere. When you understand their base motivations, you understand why certain stories are ran on the news and others are not. Their base motivations are always money. For some organizations, they do care about money, and people which is a shocking thing and yes it can be done. If employees are making their performance requirements, and the choices left to the employee that seems like the best case to support people and profit. It’s when that choice is taken away from people that you know the pure motivation is a vested interest in commercial real estate somewhere. Also, no amount of complaining online is going to change any of this. News outlets have armies of reporters and endless amounts of money to run story after story until the narrative becomes what they want it to be. So, stepping out of the negative mindset for just a minute, just go work somewhere else that’s remote.

rozal 3y ago
[dead]
jasonhansel 3y ago
Do you have any actual, hard, direct evidence to support the claim that there is some deliberate, large-scale campaign by the media to propagate such (alleged) false narratives? If there were, it would have to be a conspiracy involving hundreds of people across (or within) a large number of news outlets; there would be no way to keep that a secret. It's quite possible that people have good-faith reasons for disagreeing with you and writing stories expressing perspectives that you dislike.
- y-c-o-m-b 3y ago
  The question doesn't really make sense though. Who is going to come out and admit to this? It's a subjective topic that's been carefully crafted to avoid backlash, so you're not going to get actual hard direct evidence. Ever read the "work-life" articles for this topic on the BBC website? They are so obviously hit pieces against remote working that it almost forces you to think there's a campaign against it, whether you want to believe it or not.

kfrzcode 3y ago

I can appreciate the coinage of novel lexicology moreso than many, but I'd be remiss if I didn't point out the exacting nature of "invested" as an extant nomination of the given subject and thier relationship to the noun

faangiq 3y ago

Yep 100%. Get those wageslaves back in our buildings buying our overpriced sandwiches.

School-Cotton 3y ago

deleted 3y ago

[deleted]

porlb 3y ago

VCs do like to stack their imaginary value stores like Russian dolls https://youtu.be/NVVsdlHslfI https://youtu.be/NVVsdlHslfI

cj 3y ago

Many of those investors (who sit on company boards) also participated in the decision to sign those 10 year leases or outright purchase or build massive offices. Rather than looking stupid by having hugely expensive, empty, office space that you’re contractually obligated to keep paying for because of a decision you made pre-Covid, you encourage the he company to utilize so the asset doesn’t sit unused. (For better or worse) If you purchased or built the office, it might hurt your balance sheet to sell the asset at a loss. That loss might be greater than the cost of filling the office with people. I could see a CFO making a pretty compelling argument like this to a board filled with investors.

deleted 3y ago
[deleted]

de6u99er 3y ago

I would add companies that invested into fancy office space, which is hard to justify because nobody wants to use it.

voisin 3y ago

What percentage of venture capital firms do you think have real estate funds attached? I am betting quite a small percentage given that the risk and return profiles are dramatically different. And even where a parent fund owns both VC funds and real estate funds, how many VC fund managers do you think would sacrifice returns (the argument by pro-WFHers is that everyone is more productive at home) and consequently their promotes in favour of their sister-real estate fund managers’ returns? I am guessing none. I just think this whole argument is so far fetched as to border on idiotic.

hodgesrm 3y ago

> i still think every single one of these return to office orders are from investors that are heavily portfolio'd (new word!) in commercial real estate and are trying to keep the bubble from bursting like it should. I run a fully distributed company where work from home is standard. It works for us but has major downsides related to sharing of information that we struggle with every day. We have to overcommunicate every decision to ensure everyone gets the memo. Plus collaborative problem-solving is very hard, especially when the team crosses timezones. It's a constant threat to our competitiveness. At a more basic level, many people simply can't stay motivated or work productively a fully distributed environment. This reduces the pool of people to whom we can offer jobs. I love work from home and we have no plans to change. At the same time I am skeptical that it is a general solution that can work across the entire economy. It's just too difficult to manage.

karmakurtisaani 3y ago
> At a more basic level, many people simply can't stay motivated or work productively a fully distributed environment. I wouldn't trust a person like this to work very well in the office either to be honest. Your company and approach sound great tho, you must be saving a ton in office space expenses.
- hodgesrm 3y ago
  Thanks! It works for us. We're also saving because we're not in Silicon Valley or any of the other high cost tech centers like New York or Seattle. It's harder to do bootstrapped companies in those locations and be profitable.
wokwokwok 3y ago
> It's just too difficult to manage. Bold words. I've heard plenty of people with various opinions on this, but I suspect that you've cut to the heart of it here. It's not that it can't work. It's just harder to make it work. ...and that hard work has to be done by people who previously just sat everyone in a room and expected them to do their things with no additional effort required; and having to do that extra effort on top of what they normally do is uncomfortable for them. There's no denying that remote work makes some people's lives more difficult; but it indubitably makes the life of others easier. It's a trade off; and anecdotal 'it works' or 'it doesn't work' comments are just people commenting on their personal situation; what is much less clear, is if it actually has a meaningful impact at scale, or what that impact is.

glimshe 3y ago

They are avoiding entering long term contracts on the hope that prices will come back up. I don't see that happening, though.

concordDance 3y ago

Last I checked about 30% of people are better off WfH, 30% from office and the rest either hybrid or no preference. It seems possible that Zoom got more of the first sort of person.

sporkland 3y ago

SF commercial real estate prices being offered to startups are way lower. Sources: girlfriend leased office for her company pre and post covid. Also they talked about in in all-in podcast.