Huge opportunity to differentiate yourself as an employer. There is a vast swath of talent, as evidenced in the multiple WFH threads, that vastly prefers WFO. I would absolutely love to work in a place where my entire team is co-located.
In my experience it comes down to personal preference. However, trying to work remotely on a team that is otherwise colocated is virtually impossible so it does seem like a team either needs to be all or neither.