It’s part this and it’s also part taxes (but mostly narcissism). I work in commercial real estate. Our parent company was being leaned on by the city to get people back in the office.
Cities set up commercial areas and put various tax laws on those places. Suddenly, people are at home spending money close to their homes instead of the commercial districts. It messes up the balance.
Additionally, property owners can be punished if their tenant isn’t operating in the space, even if they are paying rent bc all the related tenants depends on that office. (If no one is in your office, the nearby chipotle doesn’t make money.).
When that happens property owners lose the ability to manage their own rent income and their lender manages their cash directly. Property owners/borrowers do not like this.
Personally, I think we should let those businesses fail and let new businesses form where people actually live. But then I’d be out of a job.
Letting those businesses fail means allowing commercial real estate values to bottom out, and that means all the securities that are backed by the value of those assets drop in value. It would be a massive financial destruction event.
It’s not about whether or not you’d be fine with it. It’s an explanation for why bosses want everyone back in the office. Yes, there’s an emotional narcissism to management across the US, but I don’t think that’s enough to explain the RTO phenomenon. It’s more likely driven by the fact that a collapse of commercial real estate value would destroy so much value in the economy that every executive would lose millions, and some would lose billions.
It’s part this and it’s also part taxes (but mostly narcissism). I work in commercial real estate. Our parent company was being leaned on by the city to get people back in the office.
Cities set up commercial areas and put various tax laws on those places. Suddenly, people are at home spending money close to their homes instead of the commercial districts. It messes up the balance.
Additionally, property owners can be punished if their tenant isn’t operating in the space, even if they are paying rent bc all the related tenants depends on that office. (If no one is in your office, the nearby chipotle doesn’t make money.).
When that happens property owners lose the ability to manage their own rent income and their lender manages their cash directly. Property owners/borrowers do not like this.
Personally, I think we should let those businesses fail and let new businesses form where people actually live. But then I’d be out of a job.
I’ll probably lose my job to AI soon anyway.
Pardon me for saying, but that’s such a USA way of working. What a mess.
You’re not wrong. I hate my job.
Letting those businesses fail means allowing commercial real estate values to bottom out, and that means all the securities that are backed by the value of those assets drop in value. It would be a massive financial destruction event.
Personally, I’m fine with that but that’s why I said I’d be out of a job. The USA designed its cities badly.
It’s not about whether or not you’d be fine with it. It’s an explanation for why bosses want everyone back in the office. Yes, there’s an emotional narcissism to management across the US, but I don’t think that’s enough to explain the RTO phenomenon. It’s more likely driven by the fact that a collapse of commercial real estate value would destroy so much value in the economy that every executive would lose millions, and some would lose billions.