this post was submitted on 15 Aug 2023
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I am surprised they don't just cut costs by not having a physical location then? Or is this just while waiting out lease agreements.
Some smaller companies are doing this. It makes them more agile financially and actually helps their growth to not have a building to pay for. I donβt understand the larger companies.
They spent millions building a facility or are locked into 5/10 year leases. I've also heard it's because cities are dying, no one in offices to eat 'down the street' at the food shops, people don't stop at the bar on the way home, no impulse shopping trip because you're already out.
Imagine how much space we could reclaim for homes to reinvigorate those bars and eateries! :o
That is exactly what they were saying.
Yeah, sorry, I must have misread that.
wait what? where are cities dying?
Isn't it the opposite, where people move from the countryside into urban areas?
It's probably a uniquely American thing, similar to how many malls are dying here while they thrive in Europe. Cities have been dying a slow death since like the 70s here because suburbs are a net loss in terms of revenue because they're more expensive to maintain than the taxes they bring in, so the only way cities can afford them is to sell more land to developers to build more suburbs, which then cost the city money, and repeat into infinity.
Cities have also had a general decline in the population within urban areas during that time, with people moving out to the suburbs for the "American Dream" of owning your own house with a white picket fence, 2.5 kids, and a cat or dog (and to avoid having to look at any poor people, immigrants, or black people). This was exacerbated further during COVID as people fled denser areas. The house prices in my town that's about an hour away from one of the most expensive cities in the country (comparable to LA prices in the city here) jumped up practically 50% during COVID while prices in the city dropped something like 20% during the first year. Prices in the city have since come back up and are now above what they were before, but prices here never came down.
Cities here also tend to have a business district, sometimes even a "central business district" that's at the heart of the city, which is made up almost exclusively of office buildings/other companies, with workers commuting into the city. Even my town has people who drive every day to their job in the city. With many of these buildings sitting empty during COVID, there's been a push for urban renewal by converting them into apartments, but that's easier said than done. Offices simply don't have the same infrastructure that apartments need in terms of basic things like plumbing, and would need to be entirely gutted, but it would be a much needed fresh supply of housing that would probably help reinvigorate these city centers.
What? Thatβs absolutely incorrect. Cities are the number one most sought after and thriving alternative, especially among young people.
Maybe cities in the US, but thatβs because theyβre mostly poorly designed parking lots for suburbanites.
Cities are certainly not dying anywhere else on Earth wtf.
I mean good? There is far to much concentration of people in cities and shit is too expensive.
What's the penalty for a big Corp to break their lease? I can't imagine they care about credit rating.
My company just moved their office space into a smaller section of the parent company's building, which funnily enough is nicer than where we were beforehand. Going in every few months makes the trip into London feel like a nice trip instead of a commute.
Yeah my office rents a WeWork space downtown and we only go there a couple days every few weeks. I like it, itβs a change of pace.
Plenty are, it's just that the largest companies built those places, they cannot trivially liquidate them. Plus they usually own the whole land, so cutting part of it away is not easy.
They still should. For many jobs office work is a completely unnecessary waste of:
But managers are loathe to ever admit any failings, our market culture frowns upon this. Hence admitting that your building is no longer needed is not a thing any manager to wants to bring up in a meeting to their bosses, so back to the office it is. :<
And that's why capitalism is so efficient.
/s
And that's the biggest one imho: They were able to leverage their huge size to save money long term by building and owning.
Now that the status quo has changed, they want to change it back so that their advantage is still in effect.
Correct. They either own the buildings and have to pay for upkeep (and can't get rid of them) or they're on a long term lease.
A friend works for a housing association that had a very fancy office and that's now been sold as they are all working from home.
My employer spent tens of millions having several custom buildings built over a decade ago. They house our servers as well. The only way they could get rid of their buildings is to get new buildings for the servers. That's a pretty tough sell.
Another reason you've not yet been given is that some of these companies have decades long contracts for renting. The government should intervene and cancel the contracts and pay for them to be converted to flats tbqh. Someone will say "But that will cost more than building a new one![citation needed]" but knocking down half the office buildings at once will probably give everyone in the cities supercancer*[citation needed]*