Salesforce has to justify their oversize pointy building in San Francisco.
Much of the demand to return to office is driven by commercial real estate interests. But they're losing. Companies aren't renewing when leases run out.
Much of the demand to return to office is driven by commercial real estate interests. But they're losing. Companies aren't renewing when leases run out.
> Manhattan-based workers are spending at least $12.4 billion less per year than they were before the COVID-19 pandemic drove a shift toward remote work, according to calculations conducted by Stanford University economist Nicholas Bloom’s WFH Research group and reported by Bloomberg on Sunday.
> New York City Comptroller Brad Lander warned that the trend represents a risk to the tax revenue needed to maintain high-quality services.
> “If less income tax is being paid in New York City, then it’s hard to figure out how to capture enough value to maintain the subways and invest in the schools and keep the city safe and clean and all the things that really matter,” Lander told Bloomberg.
> Mayor Eric Adams has repeatedly urged companies with a presence in Manhattan to require their workers to return to the office. Last April, he warned poor office attendance could hurt the city’s recovery.
> “It is a real concern,” Adams said. “We’re going to have to get to the table with all of our business leaders, our economists — and really, we can’t stumble into post-COVID.”
Lots of entrenched interests with incentives to require in office work. They see a piece of worker wages in their pocket already.
Some companies with fancy headquarters (SalesForce, Apple, etc...) will want a RTO to keep their shiny castles full. But many companies will re-consider. I'm sitting here in an empty office space that used to house Shopee. Shopee didn't decide to go full remote but instead to move to Malaysia. I'm pretty sure there are lots of vested interests in Shopee remaining here ranging from landlords to coffeeshops to the government. But the ship has sailed. The money flow is stronger than any conspiracy the "top" elites will conspire.
My previous post did not mention a conspiracy, and also, money flow, aka "the distribution of wealth" was the point of my post.
All the companies with a vested interest in workers going to the office, like landlords, shop owners, taxi companies, etc., have the same desire to continue to be profitable. That profit is predicated upon commuters re-distributing their wealth to others via the commute, in office time, restaurants, etc. Those with the vested interest can all act independently to pressure governments to coerce businesses to force RTO...so not sure where "conspiracy" came from, nor is it required.
The companies with employees coming into the office do not make additional revenue by people being in the office...it is actually cheaper for them to not have employees in the office. Reducing business space costs like electricity, maintenance, custodians, etc. Also, they do not have to supply snacks, reduction in amenities like monitors, chairs, etc. And finally, they can sub-lease until their primary lease runs out. So there isn't an excellent monetary reason to keep their shiny castles full. It is typically out of prestige or an older mindset of control.
Finally, out-sourcing and off-shoring occur independently of this RTO dynamic but for the same reasons. Companies want to maximize the distribution of wealth to the leaders and shareholders. They attempt to minimize the share of profits with employees. Layoffs, pay cuts, equity reductions, off-shoring, and more are all examples of reducing the distribution of wealth to employees.
https://www.ny1.com/nyc/all-boroughs/news/2023/02/15/adams--... (Adams: Some NYC agencies may consider remote work options again)
> However, many employees have resisted and just months after Adams’ infamous “pajama” comment was made, Gothamist reported that New York City agencies were struggling to fill thousands of jobs, partly because of the refusal to allow hybrid work.
Take all the nice high end stores out of graffiti and litter ridden areas and put them inside SF tower.
I’d never go there but if it helps make downtown better I’m all for it.
> I’d never go there
The lease (reportedly) goes 15.5 years from 2017 so they certainly have incentive to use the space but I don't think they get anything from the value of the building up or down.