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If you have way-underutilized office space that you can sell or not renew leases on, you can shed it like a former employer was doing when I left. Otherwise, th
by ghaff 2y ago
If you have way-underutilized office space that you can sell or not renew leases on, you can shed it like a former employer was doing when I left. Otherwise, there's basically no value in how many or few people are filling the space unless they're actually delivering some business value to the entity paying for the lease. (Unless, maybe, it relates to promises made to some local jurisdiction that gave you tax breaks.)
- regularfry 2y agoA lot might depend on how long a lease was signed, and what penalties there might be for breaking it.
- ghaff 2y agoSure. Breaking leases have costs. But the cases I have some direct experience with are generally simply not renewing them.
- galleywest200 2y agoFor what it is worth, Amazon has built (as opposed to just rent) very large buildings in Seattle, WA and Bellevue, WA. It could be a sunk-cost fallacy sort of deal going on here. They even built giant ~~testicles~~ glass spheres with plants in them.
- dgfitz 2y agoI don’t think I buy that answer. They’re on the hook for the money either way. Ego?
- notyourwork 2y agoThey lease a lot of buildings too. Paul Allen owned a bunch of the area.
- jacobr1 2y agosubleasing is an option, though demand is down across the board
- underlipton 2y agoThat's assuming no corruption involved, which would be weird, given the previously-mentioned circumstances. Who stands to lose if the building is sold at a loss or the lease isn't renewed? Are they connected to the executives pushing the RTO decision in any way? It need not even be a direct connection. Who's got CRE MBS in their portfolios? Whose friend does?
- DanielHB 2y agoYou underestimate the "it looks bad on my numbers" effect. For example, if you have real state that you can't get rid of, for the company it doesn't matter if the people use it or not if it doesn't affect productivity. But it sure does matter for some accounting department close to the CEO. It is like that old adage that goes along the lines "Tell me the incentives and I will tell you the outcomes"