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 Simply because people are working remotely and outdated zoning laws.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.
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.
Not to mention most modern office buildings can’t be converted into what is actually useful—housing. They need to be simply scrapped and replace.
If we adopted more mixed use zoning, there wouldn’t be this juggling act and waste. Cities could adapt to needs.
Well put. I hope this reconfigures cities to be more people oriented and forces better zoning.
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.
guess what they did with all that excess money they couldn’t spend? buy property to rent out