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I suspect the real estate prices is a fantasy. I suspect the real reason is management addiction to close supervision and their lack of trust.
I believe it's more about CEOs seeing the investor trend of making people go back to the office raising the company stock price. Simple as that there's no need for logic when following a trend nets you several millions extra valuation
I think this is it too. A lot of big business is just a game of follow-the-leader. My small company recently instituted a return-to-office program when before they were encouraging employees to work remotely if they wanted since our jobs can be done from anywhere. When I asked about why they were doing this move now during my performance review, the answer I got was "A lot of other companies are making the same request of their employees.". When I asked why those companies were doing it, they couldn't give me a good answer.
It's pretty infuriating that it took a global pandemic to finally prove to these corporate whip-crackers that you can indeed work from home and still be productive, and now they are trying to claw that back away from us a day or two at a time until we're right back where we were.
In my company they closed down the main office in the city center since almost no one was actually going over. (Think whole floor and there's maybe 10 people there at once). 4 months later they announced people would have to go back to work 2 days a week and they're already planning for 4 days a week as it was pre COVID.
Luckily in IT they're only demanding this of senior leadership and up since they know we'll jump ship quickly. But the threat looms just so they can look for their investors who only care about their stock going higher.
The remaining office is the original startup building tiny as fuck, loud and uncomfortable with bad wifi in the outskirts of the city. I think the only reason they haven't forced people to just go back is that they physically can't fit all of them into the shitty office at the same time
That's not really a fantasy at all. It works exactly the same way as the US health insurance practices.
Picture this. You break your leg, go to a hospital, but thankfully you have insurance. So they fix you up, then give you a paper with a number that says 140k$ (I wish I were kidding, this is real) on it. You sit there, completely fucking flabbergasted, but then it all makes sense. This number doesn't even have to be what your leg operation is worth. This 140k$ is what they pulled out of their ass on that specific day, and then negotiated to get that money from your insurance company. The day goes by, you feel like garbage, the hospital has made a ton of money, and your insurance isn't even mad, because they make orders of magnitude more, to the point where this is pocket change to them.
This is practically the same. A business would overpay you to sit in the office, your boss pays for the office, and that arbitrary amount of money goes to whoever owns the building. Issue is, they can keep cranking up the prices on non-residential buildings endlessly, because people keep paying them. Especially when it comes to hot locations like NYC, or anything similar, you know that someone's either already paid for that office for 5 years ahead of time, and needs to justify the absurd cost, or the office floor is sitting empty, because the landlord is delusional
This thesis lacks logic. If a company already paid the office, people going into it or not changes absolutely nothing. And if the rent is going to end, you can save buttloads of money by forcing everyone at home.
There are taxes, utilities which have to be paid just because one owns the property. Commercial taxes are many times 2-10 times more than residential.
Those who have bought it would rather use it bcoz no one is buying it.
Rental agreements are usually multi-year contracts with increasing rent. Breaking contracts are costlier than calling people back to the office.
Edit: for those saying that rental agreements have already been paid, rental agreements don't have an occupancy clause.
Logic behind rental offices needing occupancy is that usually the agreements are for big spaces for 10-15 years. If you have 3000+ sqft office space kept closed gives a negative perception of the company going in loss or the office being closed.
Public understood closed offices during the pandemic, but post that it harms the business. For a publicly traded company perception is everything.
One can pay utilities for keeping the lights up without making people come to the office. However people coming in and out also gives an impression of work happening and normalisation of the companies.
I run a small company with a 3000 sqft office space bought and paid for. For 6 months after the pandemic I did give an option for wfh. The word however spread that the office and the company has closed.
In business perception is everything.
Again, when you have a rental agreement, the money is payed already, whether you are in it or not. No need to négociateur anything. People working in the building will actually cost even more because you have the electricity and cleaning and etc.
The building is money already lost for the company. There is no justifying anything. The decision was taken years ago. If the decision was to be taken now, now then you need to justify why you would loan a building when you can simply send people to work for home.
And finally, yes, those who owns will be angry. But who cares? A company usually doesn't own its building and thus doesn't care about their prices.
Or you can just not use the office. It is very rare that rental agreements require full occupancy.
Why didn't you just put on a sign on the front saying "we're still open, here's our contact info"?
Seems like a really easy problem to fix.
Didn't help even when I had the front office open and populated with a receptionist. The overall look of the office without lights gives a rundown look.
If I am wasting money on power and other utilities I might as well use it.
For a sign people have to read it. Public would rather assume than read 3 words.
I’d put a finer point on it: they’re trying to control their workers’ lives. They have an interest in workers spending money on commuting and having little to no free time and energy. You will obey.
Ding ding ding ding! 1000% this. It’s not about money, property or “collaboration.” It’s about control and the fear you’re off not working when at home.
This is the middle management problem. The upper management problem is the cost of a building.