Why do people say that "return to office" is about raising commercial real estate prices?
A lot of times, when people discuss the phenomenon of employers ending work-from-home and try to make their employees come back to the office, people say that the motivation is to raise real estate prices.
I don't follow the logic at all. How would doing this benefit an employer in any way?
You are viewing a single comment
Imagine you're a CEO had signed a 10 year lease on an office building in 2019. You're likely stuck paying for that building regardless of it you use it or not. If you feel like working in office improves productivity (not saying it does, this is just a perspective a CEO might hold) how would you rationalize to yourself and the shareholders that you're paying thousands (or millions) for something that you could be utilizing to benefit the company and leaving it empty.
Much of commerical real estate is actually leased, these companies are contractually obligated to pay for the property regardless of if they have people in office or not. They might not be able to exit these leases for years.
Also they could be angling for the entire work force to return to work (including other companies) as a means of restoring demand for office space. Which would benefit those who flat out own the land.
Giant sunk cost fallacy. Plus old school thinking plus desire for control.
Pretty much this. A surprising amount of executives are like"we already paid for it so we should use it" with no regard for the actual bottom line impact of forcing people back to work.
You made an unfortunate investment, don't make it worse with your boomer corporate ideology
But the other way also exists, my employer is pushing hybrid work with flex desk, so they can do a building renovation without renting one more building.
But indeed before that came on the table many top managers didn't liked the flexible work. But it was already in place as a concession to thc unions (cheaper than a raise)