Comment on Why do people say that "return to office" is about raising commercial real estate prices?
HandwovenConsensus@lemm.ee 8 months agoBuying something to create artificial demand usually isn’t a good investment strategy. A “pump-and-dump” can work if you can set off a buying frenzy and sell before it wears off, but it’s not a long-term strategy.
Besides, if that was the plan, leaving the buildings vacant would be just as effective as using them.
I’m speaking from experience in CA;
Quite a few of these markets were moved on pre pandemic. Now it’s a question of how to offload. My prior company had a very nice multi story building in SoCal before they tried calling back. That was before covid, even then they had trouble securing a purchaser or renter. The market has only gotten worse.
There’s some sunk-cost fallacy; where you’ve already paid for the space, if you make the whole team drive 1hr+ to meet it’ll have been worth it.
What about modern business makes you think they have a long term strategy? All of them have been making only short term gain decisions for a while now.
Who cares if the company could be successful in the future if I can make a lot now by sending it into bankruptcy today?
chicken@lemmy.dbzer0.com 8 months ago
It’s CEOs doing this, they don’t necessarily have to make things work out long-term as long as it doesn’t look like they messed up.
Aceticon@lemmy.world 8 months ago
Some years ago the average tenure of a CEO was 18 months and it’s probably not changed that much since, so they really have no reason to worry about what’s going to happen in a 5+ year horizon: they will be long gone, bonus in the pocket and the stock options fully vested.