5 ms·

It is hilarious that people think the second largest company on the planet, with a market cap over $5 trillion, spends even one second worry about the profit ma

It is hilarious that people think the second largest company on the planet, with a market cap over $5 trillion, spends even one second worry about the profit margins of commercial real estate companies, makes any decisions based on that, or is somehow cowed by their alleged political power despite being much, much, much smaller than Microsoft.

vanviegen 1y ago
Consider the networks of friends and acquaintances the top-level decision makers are likely to be part of. Talking about how they're divesting big corporate dollars from the real estate market probably wouldn't make them more popular at cocktail parties.
dragonwriter 1y ago
I was very clear, I thought, when I said “RTO mandates are about...”, that I was not saying “All of these factors are relevant to Microsoft”. With Microsoft its probably mostly (3), with maybe some degree of (2), with (1) maybe, especially in the political salience, being a plus in the eyes of some decision-makers but not really driving the decision. There are firms (and public agencies) where the relationship between those factors is very different in driving RTO mandates.
- freddie_mercury 1y ago
  No CEO cares about commercial real estate profits. It isn't a factor in any major company decision. Why not extend the baseless paranoia and say it is because they want to see auto company profits go up? And also support petroleum companies? Or is it just real estate that is boogeyman secretly running the country behind the scenes?
  - holowoodman 1y ago
    [flagged]
    - Hisoka 1y ago
      [dead]
    - philipallstar 1y ago
      > and his phallic replacement tower All towers can be called phallic, my deranged friend.
    - lupusreal 1y ago
      Trump is probaby too senile to even know what RTO is, and even if he does, I'm pretty sure he doesn't own Microsoft's office buildings. And the premise that Microsoft would let themselves get bullied into RTO, causing a lot of their best employees to quit, without raising a public stink about it? Far fetched. This is the doing of Microsoft's own leadership, not Trump.
      - _heimdall 1y ago
        It surprises me when I see people call Trump senile given how far Biden got before most people were willing to acknowledge it at all. Don't get me wrong, there are plenty of things you can justifiably call Trump. He just doesn't seem senile in any way similar to those in my life I've watched go down that road.
        _heimdall 1y ago
        For the silent down voters, when has Trump shown signs of senility? There's plenty to dislike about him, and he does seem to have health issues, but I just haven't seen signs of serious cognitive decline.
        dragonwriter 1y ago
        > For the silent down voters, when has Trump shown signs of senility? For quite a while. Even compared to the already generally incoherent speaking style of his first term, his speech has been unfocussed, his grasp of facts worse, etc., during his second term. Even before that, the cognitive test he bragged about passing his first term isn't sonething that is ever indicated without symptoms of cognitive impairment, his speaking style, grasp of facts, etc., in even his first term shows significant decline from his earlier public life, heck even his extreme forward leaning stance, while it can have other source, is a symptom of certain kinds of dementia. Aside from fairly extreme media bias issues stemming from business and political interests of media owners that became undeniable with the public active intervention of a number of media owners late in the 2024 campaign, he gets a pass for this for a number of reasons, including the fact that critics generally have a lot of bigger fish to fry, some critics see pointing to cognitive dysfunction as mitigating arguments they want to make about conscious moral evil, incoherence and looseness with facts being a noted feature of his speaking style making people less likely to note changes that are changes in degree rather than kind for him, etc.
  - 113 1y ago
    > No CEO cares about commercial real estate profits. It isn't a factor in any major company decision. No spherical CEO in a vacuum, maybe.
  - alchemism 1y ago
    The City of Philadelphia sent all of its workers back to the office with an explicit statement from the Mayor about struggling commercial office real estate in the city center. They may not be "running the country" but they are definitely heavyweight players in the market.
    - hshdhdhj4444 1y ago
      Umm, yeah, because city executives whose “organizations” are funded by local taxes, especially commercial real estate taxes care about it. That says nothing about why CEOs of thousands of private firms who have nothing to do with real estate firms would care about those other companies’ profits.
    - Workaccount2 1y ago
      Businesses care about commercial real estate as much a renters care about landlords. This commercial real estate take is so backwards you have to wonder if it's a plant to make the anti-RTO movement look like idiots.
    - freddie_mercury 1y ago
      There was no such explicit statement from the mayor that it was because of real estate. https://www.phila.gov/2024-05-20-statement-from-mayor-cherelle-l-parker-regarding-city-employees-returning-to-the-office-on-july-15-2024/ https://www.phila.gov/2024-05-20-statement-from-mayor-cherel...
  - cmiles74 1y ago
    It’s likely members of their company’s board cares.
  - avereveard 1y ago
    Cfo and shareholder do care about value of their building as these are on the balance sheet as asset and large swings can impact the metrics by which the market evaluates the companies.
  - sumtechguy 1y ago
    I worked for a large company that did just that. They reduced the number of buildings they had to shrink costs, and get rid of employees without 'firing' them. MSFT does not strike me as a company that does not understand cost per employee. Why would you think the cost per employee does not come into the picture? I am just curious about that PoV as it is basically grilled into all MBAs and part of financial calculations of most businesses.
  - pharrington 1y ago
    May you explain why ruthlessly profit driven CEOs of megacorporations don't care about the commercial value of the real estate they own?
    - dh2022 1y ago
      Because who are the profit driven CEOs (are there any other CEOs?) sell their buildings to? The value of their building affects the profit via the depreciation expense. Which is to say the more buildings you have for RTO the bigger the expense-and thus the lower the profit for the profit maximizing CEOs. From a profit only perspective RTO makes sense only if the cities gave businesses tax breaks tied to business occupancy (the city’s math is they will get some of these taxes back when employees go and spend money in the city). And maybe cities are threatening to stop these taxes back until RTO. In Microsoft’s case though people only spend some money at the cafeteria-because there is nothing else to spend money on their campus. How big could that tax break could be? This RTO request from Microsoft does not make much sense.
      - pharrington 1y ago
        >How big could that tax break could be? Many are asking this!
      - tracker1 1y ago
        You should also consider property taxes from where the employees live. In MS's case, plenty of the employees own or rent in the same town, or nearby. At least as a calculation/consideration of tax breaks. I can say that if it weren't for Intel, Wells Fargo and others deciding to build/employ in Chandler, AZ the town wouldn't be half that size in terms of residential population. I'm sure the same is true even for bigger cities relative to business size.
        dh2022 1y ago
        How would this be an incentive for Microsoft to require RTO though? Even if Microsoft would receive tax breaks from the city because employees own property and pay property taxes - the city would get the same amount of property taxes if employees work from home. Microsoft would receive the same tax breaks. AFAIK Microsoft mandated RTO only for employees that live within 50 miles of an office. So far Microsoft does not require employees to move to a city - and bolster the property taxes the city collects. I still do not understand the logic behind RTO.
- int_19h 1y ago
  With Microsoft specifically there's also the fact that it made a massive investment into rebuilding a large chunk of its campus in the last few years (IIRC it began before COVID). They demolished some of the oldest buildings - the ones that were done back when every senior engineer was entitled to an office of their own - and replaced them with "open office" cubicle farms. Now, I would imagine that there are quite a few in the top management who originally signed off on that expense. Probably the same people who were talking about replacing offices with cubicles since 2015, which means Satya and his inner circle. So now they've spent a lot of money, they have to do something to show to the board that it wasn't wasted. Which means filling those buildings with employees, whether they like it or not.
dddgghhbbfblk 1y ago
They care insofar as the collapse of commercial real estate is cited as a social harm of WFH by the elite classes outside the business that push RTO. It's not an explicit decision making factor, just something that's in the background that has contributed to the overall idea that "RTO = good" These decisions are all being made by vibes, after all, not by a cold rational analysis
- jajko 1y ago
  If I would be a commercial real estate mogul, I would invest at least hundreds of millions into covert PR campaigns in various media (including here on HN) to nudge the perception via exactly these sort of claims. And who wants to be seen as anti-business, right? Just follow the money, it usually works very well. Sometimes, people are just dumb on their own and/or as a group but I don't think thats the case here. Tens of billions if not more in lucrative real estate is at stake.
kaonwarb 1y ago
Nit: current market cap is ~$3.7T
rwmj 1y ago
You're right that it probably doesn't apply to Microsoft, but some companies were granted tax breaks by the local city, but on the condition they brought a certain number of jobs to the city.
outside1234 1y ago
These executives, though, also made billions in investments themselves in Microsoft's Redmond Campus, which mostly otherwise will stand empty. These executives don't like looking dumb and these billions in useless investment are statues to them looking stupid otherwise.
- ThrowawayR2 1y ago
  Those investments would be a matter of public record, either directly or through real estate companies. Any investigator who found these hypothetical investments would get a lot if clicks and eyeballs so there is a hell of a lot of incentive. So where's the proof?
gahikr 1y ago
Microsoft owns a lot of commercial real estate. The people who manage the commercial real estate within Microsoft certainly care about the value of those investments.

vanviegen 1y ago

Consider the networks of friends and acquaintances the top-level decision makers are likely to be part of. Talking about how they're divesting big corporate dollars from the real estate market probably wouldn't make them more popular at cocktail parties.

dragonwriter 1y ago

I was very clear, I thought, when I said “RTO mandates are about...”, that I was not saying “All of these factors are relevant to Microsoft”. With Microsoft its probably mostly (3), with maybe some degree of (2), with (1) maybe, especially in the political salience, being a plus in the eyes of some decision-makers but not really driving the decision. There are firms (and public agencies) where the relationship between those factors is very different in driving RTO mandates.

freddie_mercury 1y ago
No CEO cares about commercial real estate profits. It isn't a factor in any major company decision. Why not extend the baseless paranoia and say it is because they want to see auto company profits go up? And also support petroleum companies? Or is it just real estate that is boogeyman secretly running the country behind the scenes?
- holowoodman 1y ago
  [flagged]
  - Hisoka 1y ago
    [dead]
  - philipallstar 1y ago
    > and his phallic replacement tower All towers can be called phallic, my deranged friend.
  - lupusreal 1y ago
    Trump is probaby too senile to even know what RTO is, and even if he does, I'm pretty sure he doesn't own Microsoft's office buildings. And the premise that Microsoft would let themselves get bullied into RTO, causing a lot of their best employees to quit, without raising a public stink about it? Far fetched. This is the doing of Microsoft's own leadership, not Trump.
    - _heimdall 1y ago
      It surprises me when I see people call Trump senile given how far Biden got before most people were willing to acknowledge it at all. Don't get me wrong, there are plenty of things you can justifiably call Trump. He just doesn't seem senile in any way similar to those in my life I've watched go down that road.
      - _heimdall 1y ago
        For the silent down voters, when has Trump shown signs of senility? There's plenty to dislike about him, and he does seem to have health issues, but I just haven't seen signs of serious cognitive decline.
        dragonwriter 1y ago
        > For the silent down voters, when has Trump shown signs of senility? For quite a while. Even compared to the already generally incoherent speaking style of his first term, his speech has been unfocussed, his grasp of facts worse, etc., during his second term. Even before that, the cognitive test he bragged about passing his first term isn't sonething that is ever indicated without symptoms of cognitive impairment, his speaking style, grasp of facts, etc., in even his first term shows significant decline from his earlier public life, heck even his extreme forward leaning stance, while it can have other source, is a symptom of certain kinds of dementia. Aside from fairly extreme media bias issues stemming from business and political interests of media owners that became undeniable with the public active intervention of a number of media owners late in the 2024 campaign, he gets a pass for this for a number of reasons, including the fact that critics generally have a lot of bigger fish to fry, some critics see pointing to cognitive dysfunction as mitigating arguments they want to make about conscious moral evil, incoherence and looseness with facts being a noted feature of his speaking style making people less likely to note changes that are changes in degree rather than kind for him, etc.
- 113 1y ago
  > No CEO cares about commercial real estate profits. It isn't a factor in any major company decision. No spherical CEO in a vacuum, maybe.
- alchemism 1y ago
  The City of Philadelphia sent all of its workers back to the office with an explicit statement from the Mayor about struggling commercial office real estate in the city center. They may not be "running the country" but they are definitely heavyweight players in the market.
  - hshdhdhj4444 1y ago
    Umm, yeah, because city executives whose “organizations” are funded by local taxes, especially commercial real estate taxes care about it. That says nothing about why CEOs of thousands of private firms who have nothing to do with real estate firms would care about those other companies’ profits.
  - Workaccount2 1y ago
    Businesses care about commercial real estate as much a renters care about landlords. This commercial real estate take is so backwards you have to wonder if it's a plant to make the anti-RTO movement look like idiots.
  - freddie_mercury 1y ago
    There was no such explicit statement from the mayor that it was because of real estate. https://www.phila.gov/2024-05-20-statement-from-mayor-cherelle-l-parker-regarding-city-employees-returning-to-the-office-on-july-15-2024/ https://www.phila.gov/2024-05-20-statement-from-mayor-cherel...
- cmiles74 1y ago
  It’s likely members of their company’s board cares.
- avereveard 1y ago
  Cfo and shareholder do care about value of their building as these are on the balance sheet as asset and large swings can impact the metrics by which the market evaluates the companies.
- sumtechguy 1y ago
  I worked for a large company that did just that. They reduced the number of buildings they had to shrink costs, and get rid of employees without 'firing' them. MSFT does not strike me as a company that does not understand cost per employee. Why would you think the cost per employee does not come into the picture? I am just curious about that PoV as it is basically grilled into all MBAs and part of financial calculations of most businesses.
- pharrington 1y ago
  May you explain why ruthlessly profit driven CEOs of megacorporations don't care about the commercial value of the real estate they own?
  - dh2022 1y ago
    Because who are the profit driven CEOs (are there any other CEOs?) sell their buildings to? The value of their building affects the profit via the depreciation expense. Which is to say the more buildings you have for RTO the bigger the expense-and thus the lower the profit for the profit maximizing CEOs. From a profit only perspective RTO makes sense only if the cities gave businesses tax breaks tied to business occupancy (the city’s math is they will get some of these taxes back when employees go and spend money in the city). And maybe cities are threatening to stop these taxes back until RTO. In Microsoft’s case though people only spend some money at the cafeteria-because there is nothing else to spend money on their campus. How big could that tax break could be? This RTO request from Microsoft does not make much sense.
    - pharrington 1y ago
      >How big could that tax break could be? Many are asking this!
    - tracker1 1y ago
      You should also consider property taxes from where the employees live. In MS's case, plenty of the employees own or rent in the same town, or nearby. At least as a calculation/consideration of tax breaks. I can say that if it weren't for Intel, Wells Fargo and others deciding to build/employ in Chandler, AZ the town wouldn't be half that size in terms of residential population. I'm sure the same is true even for bigger cities relative to business size.
      - dh2022 1y ago
        How would this be an incentive for Microsoft to require RTO though? Even if Microsoft would receive tax breaks from the city because employees own property and pay property taxes - the city would get the same amount of property taxes if employees work from home. Microsoft would receive the same tax breaks. AFAIK Microsoft mandated RTO only for employees that live within 50 miles of an office. So far Microsoft does not require employees to move to a city - and bolster the property taxes the city collects. I still do not understand the logic behind RTO.
int_19h 1y ago
With Microsoft specifically there's also the fact that it made a massive investment into rebuilding a large chunk of its campus in the last few years (IIRC it began before COVID). They demolished some of the oldest buildings - the ones that were done back when every senior engineer was entitled to an office of their own - and replaced them with "open office" cubicle farms. Now, I would imagine that there are quite a few in the top management who originally signed off on that expense. Probably the same people who were talking about replacing offices with cubicles since 2015, which means Satya and his inner circle. So now they've spent a lot of money, they have to do something to show to the board that it wasn't wasted. Which means filling those buildings with employees, whether they like it or not.

dddgghhbbfblk 1y ago

They care insofar as the collapse of commercial real estate is cited as a social harm of WFH by the elite classes outside the business that push RTO. It's not an explicit decision making factor, just something that's in the background that has contributed to the overall idea that "RTO = good" These decisions are all being made by vibes, after all, not by a cold rational analysis

jajko 1y ago
If I would be a commercial real estate mogul, I would invest at least hundreds of millions into covert PR campaigns in various media (including here on HN) to nudge the perception via exactly these sort of claims. And who wants to be seen as anti-business, right? Just follow the money, it usually works very well. Sometimes, people are just dumb on their own and/or as a group but I don't think thats the case here. Tens of billions if not more in lucrative real estate is at stake.

kaonwarb 1y ago

Nit: current market cap is ~$3.7T

rwmj 1y ago

You're right that it probably doesn't apply to Microsoft, but some companies were granted tax breaks by the local city, but on the condition they brought a certain number of jobs to the city.

outside1234 1y ago

These executives, though, also made billions in investments themselves in Microsoft's Redmond Campus, which mostly otherwise will stand empty. These executives don't like looking dumb and these billions in useless investment are statues to them looking stupid otherwise.

ThrowawayR2 1y ago
Those investments would be a matter of public record, either directly or through real estate companies. Any investigator who found these hypothetical investments would get a lot if clicks and eyeballs so there is a hell of a lot of incentive. So where's the proof?

gahikr 1y ago

Microsoft owns a lot of commercial real estate. The people who manage the commercial real estate within Microsoft certainly care about the value of those investments.