1984Feb 9, 2024

‘Zombie Offices’ Spell Trouble for Some Banks - The New York Times

https://lemmy.today/post/6273817

‘Zombie Offices’ Spell Trouble for Some Banks - The New York Times - Lemmy Today

This is the real reason for companies wanting people back to the office. All this talk about collaboration and team spirit is just the publicly given reason for wanting people back to the office. The real reason is that now the owners of the buildings are losing money. Cry me a river.

Show threadversionist Feb 9, 2024
That doesn’t make sense. The companies that want people to come back to the office are the ones paying rent. That rent doesn’t get better or worse if people come back to the office.
Show threadDangdoggoFeb 9, 2024
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.
Show threadWinter8593Feb 9, 2024

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?

Show threadHorreCFeb 9, 2024
these leases are like 10 to 30 years, its not like a yearly one.
Show threadlemmyvore
Why would anybody get into an unbreakable office lease of 10 years? Let alone 30.
Feb 9, 2024 at 9:44amWeb
Show threadHorreCFeb 9, 2024

You have never leased out a office building I can see. If you area going to spend 100,000's even into more to make the office space (as you build to suit inside the space as well) you wanna know you have it for so long. So it was good for biz as they knew they would have it for a decade maybe more and protect the investment. And it would also lock in the rent rates for that time so they could stave off inflating rents (there is a normally a year over year % increases built into the lease so the company that owns the building doesnt loose out too bad).

It was also something that C levels were spending their money on, they would own the property company and get even more out of it. They could spend a ton with a bank with the thought of I can tell you for sure biz X will be there for this many years and will pay the principal of the loan over this time, we also built space for other offices inside the building and we will give a discount to anyone that used or is referred by your bank. Again stacking security onto the loan they got, plus more to put on a plate of a potential biz start up.