1y ago

Working from home could wipe $800 billion from office values globally

www.cnn.com Working from home could wipe $800 billion from office values globally | CNN Business

Remote work risks wiping $800 billion from the value of office buildings in major cities worldwide by 2030 as the post-pandemic trend pushes up office vacancy rates and drives down rents, according to a new report.

McKinsey said cities could adapt to the declining demand for office space by “taking a hybrid approach themselves,” developing multi-use office and retail space and constructing buildings that can be easily adapted to serve different purposes.

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Most companies are trying their best to get people back in the office, but this strategy is tough to pull off with other companies poaching talent by just not caring.
- I've noticed many more job listings are prominently promoting that they are 100% remote and plan to stay that way. When I'm looking around for the next opportunity they are on the top of the pile.
  Any company even hinting at "in office" is going straight in the bin. Unless they are gonna pay for a car, parking, gas, insurance, travel time, and lunch.
  Even then it would STILL need to be a hell of a lot more $$ than a100% remote to make me want to deal with office people and not be able to wear comfy clothes.
  
  Yeah, what a terrible way to hamstring your recruiters from the competition, it literally costs nothing to make your company and environment way more attractive to candidates.
  
  Companies that are fully remote will have their pick of the best people from around the world, while companies that insist on being in the office will have to deal with whatever leftovers are close enough to commute.
  Of course, the companies that make people come into the office will no doubt complain to the government about this and get laws changed to force people to work for them. Because we aren't in a market economy anymore, we're in a corporate feudal state.
- This. I was part of two mass walkouts from two different companies, both of which were over-invested in office space and decided to try to force employees back to the office despite productivity gains from WFH. One had signed a 10 year lease on an office space in Jan 2020 and had been paying rent for two years for an empty building, the other owned the parking garage next to their office and was trying to bilk employees for $12/person/day to park.
  Now I work for a company that doesn't have an office. I'm told some employees live close to one another and occasionally meet up at their apartments, but I've also been promised that I'll never have to do that. If they reneg, I'll walk again. It's as simple as me never setting foot in an office again under any circumstances.
  
  What gets me is that there is every likelihood that the productivity increases cause a larger increase in profits than the losses they are taking from the bad real estate deal they made. Financially, they could probably eat the 10 years of rent or sublet it and reap further productivity gains as the organization continues to adapt and come out so far ahead. Fucking management myopia.
  
  in the short term, increased productivity will offset the rent. hell, baseline productivity was supposed to be enough to offset the rent or they would have never signed the lease in the first place. in the long term, the lease expires, they don't renew it, they get increased productivity and decreased costs, along with their pick of the best and brightest employees worldwide rather than just those within commuting distance who couldn't get remote work.
  Thing is, while we're waiting for all of these smart plays to pay off the stock price has gone up, but by 10% less than projected so c suite has fired all the mid and upper level managers.

161 comments