this post was submitted on 09 Feb 2024
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These companies tend to own or have long term leases, so either they are stuck paying rent and have to justify the expense or they own an asset that is depreciating in value and they could stop that from happening by spending no money to force their employees back into the office. You have to think about the big money, too. Real estate is a cornerstone asset for big money, many banks and real estate empires hold these enormous office buildings and society trending towards WFH means those buildings are rapidly losing their value.
Justifying the rental expense doesn't really make sense, because they end up paying more in utilities in addition to the rent. If you're still on the hook for a lease and have most employees WFH, just downsize when the lease ends or move everything remote if possible.
Seems like banks are worried about the loan holders defaulting and are pushing companies to bring employees back to bring up demand for commercial real estate?
these leases are like 10 to 30 years, its not like a yearly one.
I'm aware, but that doesn't negate my point. The tenant company still has to pay more in utilities and such to bring people back to the office. Whether they pay that cost for 10, 20, however many years is extraneous.
A lot of larger citys will also have things on the books (not sure if it will effect commercial zoned buildings) but if they are empty they will be charged much higher tax rates. And also if you turn on the lights in a place its normally the whole area is turned on. So if they get 3 people to come in they are spending the same power that a full office would need (assuming they have workstations there) if not then they need to wait till the contract they have allows for some sort not full payout with other penalties (which when you see a biz go under the lease holder will be part of the creditors that get money well before employees).