He adds: "CEOs and CFOs are looking at that lease or redecoration cost in their profit and loss statements and fixating on it as a bad financial decision that needs to be course-corrected — and in their minds, requiring people to use the space they're paying for is the best way to do that."
And then they lay off 25% of the workforce. The executive class's mindset resembles insanity.
Remember folks, your preparation/travel time and budget for commuting to and eating at work is a free subsidy to both your employer and business real estate companies that is coming out of your life/pocket.
Plus all that foot traffic in the business districts, where nobody lives btw because of dumb zoning laws, will increase the real estate value because of the ancillary businesses that arise in that district to serve that stream of people.
When people stop going into those business districts those smaller ancillary businesses, like the shops and restaurants, will of course go bankrupt first. Which in turn will lower the value of those offices. And since the companies that own those building are using that real estate value to secure loans, they will be put at risk. It’s basically a house of cards that will collapse. Simply because people are working remotely and outdated zoning laws.
It’s why San Francisco’s business district is turning into a ghost town.
It’s not just lease costs. It’s insurance /Liability, HVAC, cleaning services, toilet paper, med kits…so much money is being spent just to make it possible for people to just sit at a desk and zoom into meetings.
Honestly…I don’t know why boards of directors aren’t screaming for CEOs to drop RTO requirements purely from a profit perspective…unless those board members are also the same landlords of these office buildings.
I personally think this is the biggest reason. MY company just went “well, guess we’ll sell 2/3 of our campus and let someone else use that space, we sure don’t need it any more”… but I think a lot of businesses are stuck with their lease and struggling to make the square footage pay for itself.
I can’t look for a source right now (I’m on the clock at my WFH job) but I thought there was evidence that hedge funds and investment houses had invested in commercial real estate, like they invested in residential real estate in the 2000’s (which ultimately resulted in the “sub-prime mortgage crisis”)… and that THEY are really the ones pushing for RTO, trying to avoid another crash when their investments tank because nobody wants to own commercial real estate any more and starts looking to sell it off.
But take that with a big grain of salt, because I can’t cite a source ATM!
They don’t actually have good reasons to think they’re better than others, so separating themselves physically and in how they live is often enough. They just need to feel that rules don’t apply to them but do apply to others, and that they have influence over those rules.
It’s about re-enforcing an already twisted worldview that isn’t justified in any way, using the most obtuse of reasonings for why they must clearly be superior, and thus why they “deserve” to work from home. Just like they “deserve” to be able to snort cocaine off their secretary’s tits, because they’ve “earned it”, damn it (by being born to a rich family, of course).
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