196 sats \ 6 replies \ @Undisciplined 25 Apr \ on: Gradually then Suddenly- Is Suddenly almost here? econ
This reminds me of a hypothesis one of my colleagues ran past me: he called it a conspiracy theory, which it technically is.
The federal government is starting to make remote workers return to their offices. Ostensibly, this is about productivity, but neither of us believe they care about that very much.
He was proposing that this was happening to prop up commercial real estate demand (maybe just for select property owners). It makes so much sense, that I'm sure it's at least partly correct.
Desperate measures like this are generally a sign that things are about to go south.
He was proposing that this was happening to prop up commercial real estate demand
Unlike residential real estate, commercial real estate rental leases last years. And after lockdown, loads of businesses are either realizing they don't need as much office space or can't afford it. Businesses are not renewing leases.
Zoning laws in the US make it prohibitively expensive to repurpose the building for something else - say, apartment/mixed living.
And the landlords don't necessarily own the building.
To quote the NPR article above:
If office landlords can't make good on their loans and ultimately hand over the keys, banks would need to find new buyers, a tough task when interest rates are high, credit is tightening and concerns about the economy grow.
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If someone squats in your house you have to keep paying the mortgage, plus you have to find another place for you to live.
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I will say this. I don't think it is a coincidence that the big banks were the first of the public companies pushing back to the office.
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