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Many major employers also hold investments in commercial property. Empty offices lose value. Someone somewhere got in their excel that loss of productivity fro

Many major employers also hold investments in commercial property. Empty offices lose value. Someone somewhere got in their excel that loss of productivity from RTO is lower than potential loss of the property investments.

snapcaster 2y ago
This keeps being repeated but there is no evidence provided. Can you point to a single example of a company where this calculation would be made/true?
- ghaff 2y ago
  The company I used to work for was aggressively not renewing leases that they no longer needed given lower office occupancy. I have no doubt that companies trying to force people back into offices have some pretty silly reasons for doing so (including pressure from local governments) but the idea it's all about execs propping up commercial real estate seriously makes no sense even if it satisfies some conspiracy theory impulse.
- varispeed 2y ago
  https://www.ucl.ac.uk/bartlett/construction/real-estate-breidge/working-home-and-office-real-estate-apocalypse https://www.ucl.ac.uk/bartlett/construction/real-estate-brei... https://money.usnews.com/investing/articles/reits-to-capitalize-on-return-to-office-trend https://money.usnews.com/investing/articles/reits-to-capital... Whilst these are not direct examples, they show the commercial estate market is in deep trouble if people are not going to return.
  - snapcaster 2y ago
    Right, but the reason this theory doesn't make sense is because why would the executives of another company give a shit? How would they induce a bunch of tenants to RTO on their behalf?
dylan604 2y ago
If someone is paying for rent in a building, then the value does not lower just because nobody is actually using the space. The landlord has a tenant that continues to pay rent at market rate. That's the end of the story as far as the property value goes down. At least for the companies that rent their space. For companies that own their land and buildings, that's another thing, but again, the value is not set based on how many people are working there. Not sure where this idea came from
- varispeed 2y ago
  > If someone is paying for rent in a building, then the value does not lower just because nobody is actually using the space. If company cannot fill the office, it will be looking at downsizing and breaking the lease. If there are many companies like this, then landlord may not find a new tenant at existing rate and they'll either have to lower the rate or sit with empty property. If they have mortgage on it, it is a tough cookie to swallow. It's similar story for companies who own the buildings. It becomes an asset that is losing value.
Spivak 2y ago
Luckily if you're a commercial tenant that's not your problem. My $dayjob actually owns our office and is in the process of selling it. They lined up a buyer in less than a month so it seems there's still plenty of demand.

snapcaster 2y ago

This keeps being repeated but there is no evidence provided. Can you point to a single example of a company where this calculation would be made/true?

ghaff 2y ago
The company I used to work for was aggressively not renewing leases that they no longer needed given lower office occupancy. I have no doubt that companies trying to force people back into offices have some pretty silly reasons for doing so (including pressure from local governments) but the idea it's all about execs propping up commercial real estate seriously makes no sense even if it satisfies some conspiracy theory impulse.
varispeed 2y ago
https://www.ucl.ac.uk/bartlett/construction/real-estate-breidge/working-home-and-office-real-estate-apocalypse https://www.ucl.ac.uk/bartlett/construction/real-estate-brei... https://money.usnews.com/investing/articles/reits-to-capitalize-on-return-to-office-trend https://money.usnews.com/investing/articles/reits-to-capital... Whilst these are not direct examples, they show the commercial estate market is in deep trouble if people are not going to return.
- snapcaster 2y ago
  Right, but the reason this theory doesn't make sense is because why would the executives of another company give a shit? How would they induce a bunch of tenants to RTO on their behalf?

dylan604 2y ago

If someone is paying for rent in a building, then the value does not lower just because nobody is actually using the space. The landlord has a tenant that continues to pay rent at market rate. That's the end of the story as far as the property value goes down. At least for the companies that rent their space. For companies that own their land and buildings, that's another thing, but again, the value is not set based on how many people are working there. Not sure where this idea came from

varispeed 2y ago
> If someone is paying for rent in a building, then the value does not lower just because nobody is actually using the space. If company cannot fill the office, it will be looking at downsizing and breaking the lease. If there are many companies like this, then landlord may not find a new tenant at existing rate and they'll either have to lower the rate or sit with empty property. If they have mortgage on it, it is a tough cookie to swallow. It's similar story for companies who own the buildings. It becomes an asset that is losing value.

Spivak 2y ago

Luckily if you're a commercial tenant that's not your problem. My $dayjob actually owns our office and is in the process of selling it. They lined up a buyer in less than a month so it seems there's still plenty of demand.