Bunch of real Einstein’s running these places, huh? Fucking morons, just don’t waste the money leasing large offices.
Unless they signed long leases with “commercial real estate” the company can just you know save a load of money not renting those spaces and just liquidate the office for quick cash.
Or if they own, they can always sell unless “it’s an investment” so we can sell it in the future for more.
But you can only sell if someone is buying, and the moment you list that huge skyscraper on the market and find out that the only offers you’re getting are 1/10 the asking price, suddenly the other massive commercial buildings you have on your balance sheets (and those of all your rich buddies) suddenly drop 90% in value, and it’s revealed the emperor has no clothes
It would take some renovation but I imagine buying even just a couple of floors of space for apartments in the middle of NYC could be extremely desirable.
Why do we have to preface this with “Like Elon Musk…”?
Who cares what that nonce thinks? Surely not anyone who would read this article or be receptive to its content.
Probably (at least in the US perspective) he’s the CEO of 3 companies and is going to be a high ranking government official.
Awww cute, they have an idol like real people.
If you want to open your eyes even more, check out the neat overlap between commercial real estate and large businesses that require an office. Often, it’s one and the same, so it’s easy to see why they wouldn’t want their buildings nearly empty.
One of the only aspects of my previous employer that was smart and well-run was the attitude about RTO. Before the pan, the owner was planning to rent a second space in the same building to expand. Post-pan, we did a six week experiment where everyone came back two days per week. The metrics didn’t meaningfully change and we downsized. Everyone became fully remote unless they needed supplies from the office for a client.
They managed everything terribly, but at least got that right.
Ah, RTO = return to office. That took me a while …
Empty desks is an opportunity to expand, including shared desks from work sharing or WFH some of the week.
Commercial real estate/rental spaces are also an opportunity to downsize and get out of leases at better per square foot rates. If not getting out of lease, then opportunity to sublet desk areas.
The great reset is coming, it’s nipping at their heals, soaking into the top of their eyelids like exhaustion, the darkness is creeping in from all the edges, making them wonder how close it will get, if it will truly envelope them as they’ve been warned
I work in commercial real estate. Two years before the start of the pandemic, my company considered downsizing our office to have most employees work from home and just come in when needed. We also discussed how we expected the office building market to struggle in the future. (Thinking in 10 years, not two).
Anyways, we got a deal from the property owners to sign another lease, so we stayed put. And now, big surprise, they forced RTO. Someone asked our president about it in a quarterly call. He basically said “we’re never ever going back to WFH and you can quit if you don’t like it”.
So, naturally, we’re struggling with turn over and our headcount is down about around 10% so far.
For many of us, our teams are split up amongst multiple offices so there is no difference from working in the office and working from home. It’s all about that empty lease.
Yeah, too bad that a condo refit of a building is super expensive and needs some deep pockets to actually do it. Still worth the consideration if the building is a good candidate.
Also! I should add that for many property owners in commercial real estate, they can be “punished” for tenants that go dark, or stop operating at the location, even if they are still paying rent.
For example, say you own a strip mall with a grocery store and a few restaurants. If the grocery store stops operating in that location, there are less customers at the restaurants, making it more likely that they will stop paying rent also.
At least one in three bosses are shitty bosses. If their responsibility is to the company and the shareholders, telecommuting saves a ton of time and money.
Also, for those companies that love to position themselves as “green”, commuting is a horrendous waste of resources and a cause of pollution. My company preaches about how important it is to lower your carbon footprint, then institutes policies that increase carbon footprints by the tens of thousands and don’t even blink.
Anyone who does not understand the sunk cost fallacy should not be in management.
You’ve spent $x on office space. You can:
A. Use it, and make your employees hate working for you or
B. Let it go unused, and your employees are happier to continue working for you.
The money is spent either way. The only difference is morale, which does in fact directly contribute to your bottom line.
C. Get rid of what you don’t need so that everyone is happy
When you are locked in to a 3/5/10 year lease for the space, that’s not actually an option. Most leases signed pre covid should be up by now but clueless management probably renewed anyways.
And the really big corporations own their buildings. You think the company locked into leases are mad? The companies who own the building are pissed! Some have a multi million dollar building that’s losing value faster than the speed of light.
Good. Turn that shit into housing.
No shit. But this is America… You already know that proposition is dead on arrival.
Nihilism is cool and all, but smart thoughtful people are working really hard on this and it’s not easy - unless you create windowless tenements with no plumbing.
First part of finding a solution is admitting to the problem. For the change we need, the wealthy and powerful need to be removed.
Are sublets not an option?
You mean sell it for money and actually make more profit while everyone is happy? Preposterous!
C. Sublet out the property and make back the cost of the lease or even a bit of profit.
Or c, keep just enough office space to create rolling “layoffs” as people are asked to return to the office.
Step 1: Hire staff
Step 2: Train staff to do job
Step 3: COVID! Oh no! Everyone work from home.
Step 4: ???
Step 5: Fire staff to save money.
Step 6: Profit.
They can’t depreciate the assets and use them as a deduction if it doesn’t count as an office expense. That only qualifies if a threshhold minimum number of workers spend a threshhold minimum amount of time in the office.
It’s nice to find the rant in your head written out. A previous employer of mine dropped two properties in favor of a store front.
There have to be relationships at play or something like that. Or saving face. Maybe investments?
You would think that of all people, rich CEOs would understand the concept of the sunk cost fallacy.
The money on desks, rent, insurance, etc. is already spent. You’re not getting it back. Asking people to come back to the office “so that it doesn’t go to waste” assumes that you aren’t taking on additional costs for people coming to the office.
You now have worn carpet, doors, pens, paper, etc…money you could have saved if you weren’t such a knob.
You would think that of all people, rich CEOs would understand the concept of the sunk cost fallacy.
I’d expect that of someone who has to make hard decisions and work hard to get where they are.
A Nepo-Baby is neither of these things.
Are you really suggesting that you expect CEOs to be competent? Scamming people and exploiting workers doesn’t require skills, except if immorality is one.
Immorality is sadly a skill, ignoring that voice in your head that says “This doesn’t feel right, we can’t go othrough with this” and the one that says “Look what we’re doing to them!?! We have to make this right!”
Is very hard to do for people like you and I.
I used to work 10-15 hours a day, weekends included, in a small lab. I did not mind it, I felt seen, my boss was happy with my efforts, and I thrived in that atmosphere.
I now work completely remote for significantly more money, spending 10-16 hours indoors interacting with nobody. It’s hell. My extra hours are unseen. I barely see the sun. My weight is ballooning.
My point: WFH is great for people with families or partners, or anyone who has essentially a settled home life. But for single people, WFH is torture.
I do 100% agree that it should be a choice, and not a mandate to RTO. I’d take it in a heartbeat if it was an option
You shouldn’t do extra hours and you shouldn’t work more than 8 hours a day.
Depends in how much you view your work as “work”, I guess. In my old job, I used to spring out of bed burning with ideas I wanted to implement, and when you have that freedom to play with your work, the concept of billable work hours quickly falls apart.
In this job, I have less freedoms to play with my work, so I’m with you that 8 hours should be it
Nah. I respect your point but I don’t agree. I sometimes have this urge to do some extra hours because what I do is super fun, challenging and I learn a lot. It feels like gaming or hobby projects at times.
But what I learned after decade and a half in my job is that 6 hours of such work is a hard limit. Later one starts to burn out quickly. It’s like going on turbo boost. Nice fly but fuel is going down pretty quickly.
My brain performance goes also down quickly in such a sprint so the outcome quality goes down as well without even me noticing.
8 hours. Then I go with my life doing something completely different. No matter how much fun I have at work.
Early in the pandemic, our CEO asked why we paid so much for real estate if everyone could work from home. They’ve been trimming leases as quickly as they can.
We’ve been hiring people who live out of state. They only come onsite very rarely, maybe only once a year.
My company did that too, then they replaced us with cheaper labor from overseas.
Ours did that before the pandemic and not my area. Within a year, it went back to what it was because of how terrible the quality was. Now they are dumping all the buildings that aren’t needed and sent a lot of us home. Of course, the main product that my job deals with needs buildings for machines to work so they didn’t get rid of everything. No more corporate, and for now, we are all home for the foreseeable future. I also wonder when they will get the bright idea to start outsourcing again now that it’s been like 7 years…
Convert to apartments
Make profit
Tada!
I agree this is what should be done! Though it is surprising challenging to convert an office building to an apartment.
One issue, for example, is that the plumbing and electricity lines tend to be located on one end of the building. If you want to convert it to apartments, you have to reroute all the plumbing.
In the US, there are also rules about the number of stair cases. That’s why many apartments here are long and flat buildings of 3-4 floors rather than taller, taking up less space.
