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Comment by bdndndndbve | Hacker News Reader

People have theorized that RTO mandates are shadow layoffs, but I think they might actually be commercial real estate investors trying to prop up the office market. If large companies are able to force RTO those working conditions will trickle down to smaller employers, which will stop the bleeding of tenants for small and midsized buildings. Those commercial office buildings are owned by REITs and investment banks.

It's like if the landlords that own malls were allowed to ban online shopping.

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That really doesn't seem plausible. Why would JPM bother propping up commercial real estate? I think the answer is much simpler. Jamie Dimon is very opinionated and conservative and wants people back in the office because thinks they're slacking off at home.

I'm not saying they're single-handedly propping up real estate, but they benefit from "number goes up" in the economy. If WFH becomes a durable trend and a bunch of commercial properties get written down it's going to have a big impact on a lot of investors. Many large companies either have real estate investments, or their owners are diversified into real estate. It makes sense for companies collectively to push in this direction not out of nostalgia but to avoid a massive correction.

Our entire banking system is built on trusting that companies and individuals will keep paying their loans.

If enough people don’t want commercial real estate, then those empty buildings will, at least for businesses, eventually start to default because they have no money.

At least that’s my “off the top of my head” theory.

It doesn’t change the fact that the US’s car-centric, NIMBY, segregated behavior has resulted in a world where in-office work is about as unpleasant as can be and greatly desired against.

Commercial real estate bottomed already. The market isn't going to collapse. Besides they obviously didn't make any similar hedges when it was residential real estate in 2007. Nor does it make sense for them to spend hundreds of millions on real estate so they can not lose money. There is no 4d chess. It's just old people making bad decisions.

>Commercial real estate bottomed already

I think you are under estimating the problem with Commercial real estate, along with rental around the city that has on adjacent Commercial real estate pricing. Which also has a knock on effect on other financial instruments.

The situation wont change or pops the Commercial real estate value to where it was. But it should hopefully buy some time for the market to solve itself. And this isn't just JPM literally eery bank and finance sector are forcing other sector ( other than tech ) to end Remote work.

There's a good Money Stuff episode about this btw. They talked to someone whose job is to assess commercial properties on behalf of investment funds. There's a lot of obvious tricks that places use to make their occupancy seem better, but the guest's take was that only S-tier malls and office buildings are worth the asking price.

My local B-tier regional mall for instance has about 50% occupancy, and a lot of that is pop-up stores that seem to be entirely transient. They have an anchor Wal Mart, a bank and a mobile phone store, but no other noteworthy tenants. Around the holiday season it felt pretty empty. It's amazing they can afford to operate such a large building under the circumstances.

There's 2-3 other similar malls within a 30 minute drive. All of these malls are still being held by REITs or retirement funds at inflated valuations waiting for a recovery that isn't coming.

>There's 2-3 other similar malls within a 30 minute drive. All of these malls are still being held by REITs or retirement funds at inflated valuations waiting for a recovery that isn't coming.

And this could cause a melt down that could be worst than 2008 housing bubble. May be it is inevitable. But there is still some time to fix it.

There is also the problem with asset valuation as you said that goes to loan and those loan goes to other places, as I said the whole knock on effect on many other areas. And I would not be surprised if Jamie Dimon can smell something is coming.

Basically everyone on HN wants Remote work, and remote work is the future of all work. ( I have on numerous occasion read this on HN and see very little challenges to the claim but up vote only ). If I were to ask between a market crash and Remote work which one would they choose, I am not so sure if everyone is still on Remote work.

JP Morgan is one of the companies I believe could think that forcing RTO is good for larger market valuations and thus directly to them. More "wealth" there is sloshing around in the system better for them as they extract their cut. Commercial real-estate is big investment market. And thus more active it is better it can be for them.

Why not both?

Amazon is full RTO in my city and there are now lines down the block for the food trucks this week at lunchtime.

I’m sure every business owner is conspiring together to get those captive office workers back in city centers where their wages can be siphoned.

This is definitely the case in Seattle, where every news story about Amazon RTO seems to feature a restaurant owner or business association praising Amazon and ignoring that they’re really just stealing from the employees who lose 1-2 hours to commuting each day.

Amazon employees are universally complaining about it, while Amazon is the only FAANG that is actively hiring right now (they must have higher turnover).

Weird to hear that they’re complaining. On LinkedIn, I often see Amazon employees talking about how RTO has been great or that there’s a positive side to it. Maybe they’re just managers? Or maybe the silent majority is too afraid to speak against it publicly? I feel like Amazon looks very bizarre to an outsider, almost cultish in accepting this new reality of RTO, all just to shill almost universally Chinese made low quality products.

Either way if this didn’t spur them into unionization I don’t know what will. Not that I’m pro union either - I have concerns about how many of them run. But I feel like losing 1-2 hours daily is such a big cost that it’s worth dealing with that.

No one is going to trash talk their company on LinkedIn, that’s just a quick way to being unemployable. I’m just talking about techies anyways, and the grumbling I hear in social conversations.

It is difficult to get tech workers making > $200k/year to unionize. At that point, it’s more grumbling about first world problems than about oppressive working conditions (yes, working from home is better, but no, RTO isn’t some sort of unreasonable request for the compensation involved, but people will still complain of course).

Personally I think RTO is unreasonable regardless of compensation, since it isn’t required for the job and improves nothing. It probably hurts the company more. To me taking away 1-2 hours of time everyday from people is a huge change in working condition.

It is definitely tough to get tech workers to unionize. There's a lot of possible lines of organizing like not destroying the Earth, or not contributing to genocide, or solidarity with staff who don't make 200k a year. But historically labour organizing has been about the immediate material circumstances of the workers, because people are pretty selfish and short sighted in aggregate.

> or solidarity with staff who don't make 200k a year.

I don’t really see it. Amazon techies wouldn’t have much in common with Amazon warehouse workers, and I’m not seeing any other people they could share solidarity with. But think if you are an SWE say at a traditional manufacturer, your needs and interested are going to differ a lot from someone working the assembly line.

"don't have much in common with warehouse workers" is so demonstrative of the American lack of class consciousness.

The people making 200k a year are still workers. They may have savings and insurance that make them feel more secure, but they still need to clock in every day to afford to be alive. Their activities in their day to day life are constrained by "will Amazon fire me for this". If they ever suffer some kind of injury that prevents them from doing their day job they would quickly discover that their position is just as precarious as the delivery driver who brings them their cheap plastic shit from China.

> Weird to hear that they’re complaining. On LinkedIn

We might live in different universes but in mine LI is exclusively used in positive tones and for praising. Saying anything negative about any company, and especially the one you work for, is the greatest taboo. You can occasionally criticize something about an unnamed company for virtue signaling. Like really, LI is for people looking for a jobs so who would to hire a person publicly complaining about their employer?

There is nothing preventing anyone from bringing a lunch box with them to work?

I can't believe all those dummies in line for lunch never thought of that.

This sounds conspiratorial but where I live this is literally the case. Owners of buildings and large businesses in the downtown core (which has been vacant due to WFH) are collectively lobbying large employers to force RTO. It's not a secret, it's a public project to "save our downtown".

Why do the landlords have control over tech ceos?

JPMorgan are the landlords. They just finished building one of the biggest skyscrapers in NYC for their use https://en.m.wikipedia.org/wiki/270_Park_Avenue_(2021%E2%80%...

Someone needs to at least be able to portray a return on that investment.

Institutional investors in Big Tech also have investments in commercial real estate?

In this particular case we are talking about a large company that owns a lot of commercial real estate and invests heavily in it. From their point of view, allowing people WFH is acting against the best interests of the company - if these commercial buildings are sitting empty, their value goes down.

I see their point but as an employee I would never work for them unless completely broke and desperate - and even then only temporarily, just to have time to find a better job that allows WFH.

They could instead rent it out right? Employees are happy, money is flowing in. win win.

Problem is demand. If everyone else also have people working remotely... So what they have to first do is to show it themselves.

I think most corporate America works this way. Every company has a board of directors (i.e stake holders (i.e investors, with many investments, including land)) they pass down edicts from on high. "If you want my money you have to do XYZ." From there c-suite executives figure out how to pull it off. Sometimes investments in one area affect decisions in another, which is technically a conflict of interest, which is technically illegal, but hey that's why America is famous for its corporate integrity.

That theory has always seemed to me like the tail wagging the dog--a relatively small tail (commercial real estate) wagging a big dog (trillion dollar companies). If you look at the balance sheet of these companies, real property is significant, but almost always far from the largest investment they have made.

https://hbr.org/2024/07/u-s-commercial-real-estate-is-headed... it could be retarded ad bit, not avoided.

IMO remote work should be evaluated on a role-by-role basis because remote team coordination really is that much harder. The prima facie incentives actually lean hard in the direction of employers because you access the global market of developers, driving down cost big time and real estate is expensive.

Thus remote coordination is so hard... that employers would rather pay for expensive real estate and expensive talent, including the burn on time for employees driving around.

at least where im working, team coordination was already dying to dead before covid lockdowns started because all the realted teams were moving to far off locations. the coordination improved with dedicated remote compared to conference room to conference room remote meetings

So what you're implying is that for roles where other companies do have managed to establish functioning remote work protocols, we should interpret RTO mandates as a public display of organizational dysfunction if they were unable to emulate those within the span of, oh, five years?

Also I'm pretty sure employers don't generally pay for, or care about, the commute times of employees…

Yes, especially for something creative and collaborative like engineering. Creating a culture where remote work works as well as in person is hard, and takes explicit effort and buying from management.

I agree to some degree - it's only hard at the very beginning. After that, it just becomes a part of the company culture. And you can feel it from the first days when you are onboarded or when you struggle with your first ticket.

Yes employers do care about commute. Commute time is one of the leading predictors of turnover, and it has a more dramatic effect on employee happiness vs higher salary. Also, it's de facto culture for programmers to work a little everywhere, on and off the clock (I'm not saying that's right, but it's reality).

A certain well known big defense company used to subsidize rent if you agreed to live closer.

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