this post was submitted on 23 Aug 2023
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Why would companies that generally avoid owning real estate act against its own self interest for the profits of real estate companies?? I don’t see the connection.
I agree with this, the theory doesn't track very well unless the executives locked themselves into expensive long term leases for their offices and don't want to feel embarrassed that it's a wasted cost.
I think the more likely explanation is that the companies want to drive people into quitting so they can reduce payroll without being on the hook for unemployment insurance.
This is exactly what happened at Alphabet.
That’s false. They were not locked. They publicly announced they paid the fines to end those leases early. I think people are just sharing feelings and not facts here.
If they paid fines to cancel, then they were locked in. But they were sensible enough to not fall for sunken cost fallacy and formed up the extra money for the fines to break the lease. Most companies aren't so forward thinking.
That’s a semantic distinction that makes no difference for their incentives. They are not feeling any pressure that affects their decision making in this regard anymore. That was the original argument.
Lots of companies and executives invest in real estate. They see their holdings dwindling and decide its time for the unwashed masses to get their asses back in the office
there might be exceptions. but as a rule tech companies AVOID investing in real estate.