I think this speculative take is so popular because it gets a rise out of people, but it’s much more likely that corporate real estate is just a real big asset on corporate balance sheets, and if everyone panic sells their offices at the same time that market will crash leaving corporations to hold the bag.
I know we want to believe that every senior manager on the planet is fragile masochist who needs to see their employees to feel big and strong and in control, but it’s much more likely that this is related to finances.
They get tax breaks from the city to maintain a minimum occupancy. The cities were waiving those requirements during covid, and now they’re not. It’s that simple. The government and the corpos want their extra money from your pocket and they’re insisting on behavior that will get it for them.
Agreed. #1 advice from anyone is “invest in real estate because it’s the only thing they’re not making any more of.” So even if a huge corporation owns nothing and just rents every inch of office space, most likely their investment strategy includes commercial real estate.
Anecdotally, I happen to know of some people who threw a ton of money into local commercial buildings pre-pandemic, because that was the way the investor-class herd was going. These are people that I consider very wealthy, but are small potatoes compared to most of these big corporate CEO types. Now that they own all these buildings, they’re squawking because they can’t rent them.
I think it can be both commercial real estate holdings, seeing what Big Tech and other prominent CEOs are doing and following their lead, and a way to cutt staff without official layoffs. (Since many people will quit rather than RTO since they no longer live close.to the office, or because they are close to retirement, or they take another position that is WFH or hybrid. I day this because those of some of the reasons my coworkers have quit rather than come in 2 or 3 days a week.)
Very good point about forcing attrition, my only counter argument (for lack of a better word) would be that it’s more dangerous than traditional layoffs since you don’t get to choose which or exactly how many employees leave, and my guess is that there’s reason to believe you’d lose a large number of senior employees who would have an easier time finding a different remote position.
However the benefits of not having to admit to actual layoffs might outweigh these cons for a lot of companies for sure.
Except that work is more than just tech companies and there are other industries with retention issues and they are still trying to get people back into the office because of coordination and training issues. In some cases, they have been far more aggressive than tech companies in this regard.
I think this speculative take is so popular because it gets a rise out of people, but it’s much more likely that corporate real estate is just a real big asset on corporate balance sheets, and if everyone panic sells their offices at the same time that market will crash leaving corporations to hold the bag.
I know we want to believe that every senior manager on the planet is fragile masochist who needs to see their employees to feel big and strong and in control, but it’s much more likely that this is related to finances.
They get tax breaks from the city to maintain a minimum occupancy. The cities were waiving those requirements during covid, and now they’re not. It’s that simple. The government and the corpos want their extra money from your pocket and they’re insisting on behavior that will get it for them.
Agreed. #1 advice from anyone is “invest in real estate because it’s the only thing they’re not making any more of.” So even if a huge corporation owns nothing and just rents every inch of office space, most likely their investment strategy includes commercial real estate.
Anecdotally, I happen to know of some people who threw a ton of money into local commercial buildings pre-pandemic, because that was the way the investor-class herd was going. These are people that I consider very wealthy, but are small potatoes compared to most of these big corporate CEO types. Now that they own all these buildings, they’re squawking because they can’t rent them.
I think it can be both commercial real estate holdings, seeing what Big Tech and other prominent CEOs are doing and following their lead, and a way to cutt staff without official layoffs. (Since many people will quit rather than RTO since they no longer live close.to the office, or because they are close to retirement, or they take another position that is WFH or hybrid. I day this because those of some of the reasons my coworkers have quit rather than come in 2 or 3 days a week.)
Very good point about forcing attrition, my only counter argument (for lack of a better word) would be that it’s more dangerous than traditional layoffs since you don’t get to choose which or exactly how many employees leave, and my guess is that there’s reason to believe you’d lose a large number of senior employees who would have an easier time finding a different remote position.
However the benefits of not having to admit to actual layoffs might outweigh these cons for a lot of companies for sure.
Except that work is more than just tech companies and there are other industries with retention issues and they are still trying to get people back into the office because of coordination and training issues. In some cases, they have been far more aggressive than tech companies in this regard.