4 ms·
I don't understand, like, I can see each handwave - 1. They're paying a lot in rent. 2. if they don't have workers in the office, then, adjacent spaces for ex
by refulgentis 2y ago
I don't understand, like, I can see each handwave -
1. They're paying a lot in rent.
2. if they don't have workers in the office, then, adjacent spaces for ex. food service is less valuable.
3. If adjacent space is less valuable, the landlord is motivated to raise Amazon's rent to compensate
4. Therefore, they're making people go back to work to avoid rent increases
4 years on, and it seems a little bit odd it took that long for it to play it. But it seems (much) cheaper and sensible to find somewhere else to rent than give in to a threatening landlord who sees you as responsible for any shortfalls in adjacent revenue, instead of the anchor tenent you are.
- reaperducer 2y agoIf adjacent space is less valuable, the landlord is motivated to raise Amazon's rent to compensate Real estate is very much driven by supply and demand. Moreso than many other industries. If the adjacent space is less valuable, it gives Amazon leverage to lower its rent.
- therockspush 2y agoYou're right about Amazons leverage. In Santa Clara county we have our local behemoths trying to get their property valuations dropped. https://www.bizjournals.com/sanjose/news/2024/11/08/tech-google-county-property-tax-billions-appeals.html https://www.bizjournals.com/sanjose/news/2024/11/08/tech-goo... The way commercial real estate lending is tied to lease rates usually means its almost impossible for them to go down unless you operate at these scales. Most commercial landlords around me would rather have prime main street spots stay empty than refinance because of lower lease rates.
- deleted 2y ago[deleted]
- hn72774 2y agoAmazon owns most of its downtown Seattle real estate. Low occupancy means balance sheet write downs, and higher cost of capital.