This is 100% it. That and a lot of managers think they are somehow more effective if they can physically see their employees.
Commercial real estate is in for a significant correction. All those workers who went home? They’re not coming back. A great many would rather quit than go back to the daily commute.
Workers now know remote jobs work. It’s now a significant perk when job-hunting- a company can get better candidates for less money by offering remote work. And for many workers it’s become financially essential. You can work for Big Tech and make $130k, but that means moving to a very high cost of living area where $130k gets you a tiny apartment and a middle class lifestyle. So why not work remotely for a startup and make $90k, but live in a lower cost of living area where $90k gets you a MUCH nicer lifestyle and way less traffic?
It’s also telling how the return to office policies are implemented. They want people in office X days a week- doesn’t matter which days, doesn’t matter if your team is there also. Just make sure you badge in 12-15x/month. That’s not a ‘team building’ thing. That’s a ‘please don’t make me tell our shareholders I wasted $100 million on a worthless building’ thing.
Of course landlords are loathe to reduce rents because unlike apartments, commercial leases are long term- 10-25+ years. If they do cheap leases now, the worry is they’ll be locked into those rates. And they themselves bought the buildings expecting full rate leases (so their own payments are structured as such). And of course mayors see their business districts and tons of support businesses (coffee shops, drycleaners, transportation, etc) dying due to lack of commuter foot traffic and that’s no fun.
But a correction is both necessary and inevitable. The downtown business district metropolis, where everyone commutes in from miles around to sit at desks, is dying and it’s not going to come back. There ARE businesses where remote work isn’t practical. But the vast majority of desk jobs can be made remote or pushed to cheaper satellite offices without a problem.
If cities accept and embrace that- turn much of that commercial space into apartments, recognize and embrace that rents will come down, property values will come down, but the PEOPLE of the city will benefit with lower cost of living and greater diversity, it will be a good thing. Some cities are doing this.
Cities that don’t do this will have their once bustling downtowns turned into ghost towns.
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