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Comment by mft_ | Hacker News Reader

> bottom line is commercial real estate (CRE) is screwed and the sole driver of all of this

I suspect that alongside the obvious reasons (inflexible management styles, micromanagement, etc.) always discussed, this is a major driver: ongoing spend on office buildings needs to be justified, and is probably very difficult to get out of - e.g. long-term building projects, or ownership of buildings which would be difficult (or a big loss) to resell, or long-term leases signed when obviously the offices would be needed for decades, or senior leaders feeling personally invested in particular building projects, etc.

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I'm not sold on this one, although I see it pretty regularly. Its got the whiff of conspiracy theory to me in that it provides a simple answer to a complex question by having two faceless entities colluding with each other for unknown reasons. Dell has no incentive to support the real estate industry, and while I'm sure facilities departments are feeling pretty unsettled by the move to offices being unneeded I know of very few companies who don't consider facilities to be a liability they'd like to reduce the need for.

About the only bit of this I buy to some extent is very senior managers who've been closely involved in building out new office space only to find it's empty.

I think it's not a drive to support CRE per se. There are some state-level subsidies that companies get if they bring a certain amount of jobs into an area. Employment and showing up at the office can be a part of the deal there; if your employees don't show up at the office, your company would have to pay back the subsidies.

Think of it this way- a company has a CRE portfolio originally worth a hundred million dollars on their balance sheet.

If they sell it and take a massive loss, they'll take a big hit on the balance sheet. So, they want to hang on to it until times are better. But, people will criticize the company for hanging onto unused real estate if nobody shows up. So now the company wants to show people in the office.

I'm not sure that this is true, but it's the only realistic way I can see CRE holdings driving returns to the office

> whiff of conspiracy theory to me

Literally news from yesterday: Three compies conpired to impersonate millions of voters to influence federal policy

How many times do companies have to conspire to commit fraud before people stop claiming conspiracy and corporate fraud never happens??

https://news.ycombinator.com/item?id=35934504

> Its got the whiff of conspiracy theory to me in that it provides a simple answer to a complex question by having two faceless entities colluding with each other for unknown reasons.

There's no need for a "conspiracy theory" to explain it. The better way to look at it is:

Some VP at Dell leased X million sqft of office space on a long term lease that does not expire until the year 2030 (thereby getting a good deal and locking in a lower rent until that time) sometime before the pandemic flipped things to "WFH".

Now, post pandemic, with most employees in WFH status, Dell, the company, is paying $Y million/month for X million sqft of office space, which is going unused -- and they can't get out of their 2030 leases early without taking an even bigger loss. So from Dell executive's viewpoint's, this is office rent going to waste, so if it is going to be paid for anyway, we might as well force employees back to the office so we don't have to report the rental costs as pure losses on our quarterly reports to the SEC.

Yup, I think what's happened is we have a lot of upper level people are going to have bad numbers from WFH becoming the norm and thus they are fighting it. No need for a conspiracy, they're just a bunch of people responding to the same forces.

I'd hope business leaders wouldn't fall for the sunk cost fallacy.

Hah. Have you met many business leaders? They could be poster models for the Dunning-Kruger effect.

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