[HN Gopher] Someone has to foot the bill for empty offices
___________________________________________________________________
Someone has to foot the bill for empty offices
Author : JumpCrisscross
Score : 32 points
Date : 2021-06-10 18:39 UTC (4 hours ago)
(HTM) web link (www.economist.com)
(TXT) w3m dump (www.economist.com)
| Tsiklon wrote:
| Buying or building property with the sole purpose of lending it
| out is an investment, a gamble, a calculated risk.
|
| Same scenario but smaller scale: an individual purchases a
| domestic property with the purpose of renting it out as
| accommodation. Due to unforeseen circumstances the area becomes
| undesirable and they become unable to rent the property, what
| happens?
|
| They go underwater on the mortgage. The landlord doesn't get
| bailed out, they have the property foreclosed on by the lender
| who goes to recoup some of _their_ investment.
|
| Why should office landlords be treated preferably in this case?
| This is the risk involved in being a landlord; It's not a
| guaranteed money spinner.
| spoonjim wrote:
| When rents were high: _I_ must be paid market value for this
| property that I bought for 8% of its current value!
|
| Now: _Someone_ must foot the bill for this!
| version_five wrote:
| I was recently having the opposite discussion re residential
| real estate: where I live, there are artifical limits on how
| rent can be raised, even between tenants. Whatever one's
| opinion of that policy, it limits the upside of a landlord, but
| they keep their exposure to the downside.
|
| I'd be curious to know if there are any common restrictions on
| commercial real estate that limit the upside in the name of
| some public interest, same as rent control. If this is the
| case, there may be more of a case for limiting the downside
| too.
|
| Overall, I do agree with you, and what seems to be the common
| sentiment here, that investments are risky and the risk should
| be borne by the investor. But it becomes less clear when the
| investor is made to pay for some other policies out of their
| upside.
| spoonjim wrote:
| My policy preference for both commercial and residential real
| estate is that all rental contracts must include a 1%
| ownership transfer per year. That way if you rent a place for
| 20 years you own 20 percent of it. Yes it will shrink supply
| on the margins and maybe there needs to be some carve outs
| but I'm sick of seeing restauranteurs etc make a neighborhood
| cool and then get kicked out with all the value having
| accrued to the landlord.
| aidenn0 wrote:
| Does that mean that if you rent a place for 51 years, you
| have a controlling interest and can set your rent to zero?
| axiosgunnar wrote:
| I suggest this ,,someone" to be whoever would have profitted if
| these offices were full.
|
| We need to stop privatizing gains and socializing losses.
| johnp271 wrote:
| Weren't the two COVID bills passed by congress, each >
| $1trillion, a socialization of the losses incurred by folks?
| Wasn't the point of the $1400 (or whatever) checks and extended
| unemployment benefits intended to make up for losses incurred
| due to COVID?
| mc32 wrote:
| Uhhh:
|
| >" A market correction would probably slap [banks] in the face
| without knocking them out. Instead, more of the bill will fall
| on equity holders, not least pension funds and insurers which,
| in their hunt for returns in an era of low interest rates, have
| been loading up on property for years. The sooner they admit
| that losses are coming, the sooner they can try to limit the
| damage."
|
| So holders of that debt...
| engineer_22 wrote:
| REIC's own a lot of office space. A lot of shares of REIC's are
| owned by retail investors, 401ks, state pensions, etc. Our
| economy is highly networked.
| tomrod wrote:
| Correct.
|
| The fact remains we should not socialize losses.
|
| Insurance and reinsurance exist.
| engineer_22 wrote:
| I'm not aware of the mechanics of how that works. I have a
| state pension account from a previous job. Does my state
| pension manager buy an insurance policy? Please explain.
| tomrod wrote:
| If you're willing to pay, you can get basically anything
| insured.
|
| https://www.pbgc.gov/ as an example, but a bad one since
| it (to my understanding) socializing pension fund
| default.
| toomuchtodo wrote:
| If a single named security falls through the floor because
| they couldn't pivot from B&M to E-comm, there is no
| insurance that is going to pay out for an investor's loss
| (securities fraud aside). Likewise, if you made a bet
| that's going sour (office space), you are going to eat that
| loss.
| tomrod wrote:
| Agreed.
|
| "Insurance" in the financial market is hedging.
| toomuchtodo wrote:
| Words mean things! Insurance is when you pay someone else
| to manage the risk, hedging is when you do it yourself.
| Excuse my pedantry. Agreed that hopefully funds invested
| in office investment vehicles did not overexpose
| themselves in reaching for yield (because, heh, offices
| are sure things, right?), but, you know...
| tomrod wrote:
| > Words mean things!
|
| Do they? I've always found connotation to be an intimate
| and flexible concept, and serves as a limiting factor for
| true communication. Wittgenstein agrees, I think :)
|
| I can pay a hedge fund to hedge my risk.
| JumpCrisscross wrote:
| > _We need to stop privatizing gains and socializing losses_
|
| Nobody here is advocating this. The article is about measuring
| how the costs and benefits could get allocated in various
| scenarios.
| engineer_22 wrote:
| Doesn't the office tenant profit while they are occupying the
| space? They profited more by having more employees and filling
| more space. (butts in seats, a common measure of corporate
| size/growth)
|
| The building owners built the buildings to suit the demand of
| their tenants.
|
| The office tenant is paying someone else to take care of the
| details of managing real estate, which is a task requiring real
| managerial skill and should be compensated. The tenant is
| willing to pay for this because they do not want to spend time
| and resources dealing with it themselves, their time is worth
| more doing something else.
|
| So who should pay?
|
| The property owner/manager? They are wholly dependent on the
| commercial real estate industry for their profit.
|
| The tenant who was previously dependent on property
| owner/manager to provide space?
|
| Is the tech industry to blame for making WFH a viable
| alternative, should tech share in the cost?
|
| Should the pensioner invested in corporate bonds fairly take a
| haircut?
|
| EDIT: Not arguing your point, but there is some nuance that
| should be brought to light.
| version_five wrote:
| I think this is a fair point: say I sign a 5 year lease (no
| idea what industry norm is), I am presumably getting a
| discount over whatever the month-to-month or daily rate for
| rent would be, and accepting the risk that I need to find a
| way to use the property to make money throughout the lease
| period.
|
| If I'm the building owner, i probably debt financed the
| building, and I'm taking on the risk that i can get enough
| cash flow from tenants to pay my mortgage.
|
| If I'm the mortgage holder (this is my basic understanding)
| I've turned rue mortgage into some kind of security and sold
| that to an investor who is taking on the risk that the
| property owner will pay the mortgage. And there may be
| shareholders or other parties taking on the risk that whoever
| owns the securities will remain solvent and pay their pension
| or whatever.
|
| So it's not super obvious where and how the buck should stop.
| I own an condo that I rent out. Guaranteed I am in the hook
| for it - i have no recourse for a tenant that doesnt pay
| other that maybe an eventual eviction, and the bank will make
| me sell it if I dont pay my mortgage. I'm the weakest point
| in the chain above, and that's why I'll have to be
| responsible. I suppose in exchange for that I'm exposed to
| more upside than the bank or the bondholders. But it's not
| clear to me that I'm the one beneficiary who should bear all
| the risk.
| sicromoft wrote:
| https://archive.is/8hrll
| throw737858 wrote:
| Churches and malls were converted to residential buildings. Why
| not office space?
| throwawayboise wrote:
| It would be a lot of work, e.g. just the plumbing for
| residential (kitchens and bathrooms in every unit) would be
| very different from plumbing for offices (a few central toilet
| rooms).
|
| Electric, HVAC would be similar.
|
| However, still could be possible in some buildings and
| ultimately be worth doing. For other properties it might be
| cheaper to raze and rebuild rather than try to fit residential
| space into a commercial-plan building.
|
| Completely agree with other posts that the risk of loss should
| be squarely on the owners/investors. Property is an investment
| like anything else, and may lose value. And I'd guess
| commercial property is riskier than residential.
| mlyle wrote:
| Just converting a very small share of buildings to mixed
| commercial-residential might be enough to adjust for the
| reduction in office demand.
| walrus01 wrote:
| It's been done but very often "class A" office towers lack
| things which are needed for residential use, like windows that
| open, balconies, locations in the concrete walls and floor
| slabs for water and sewage pipes. Even basic things like if you
| take a floor of an office tower and turn it into 700 sq ft
| condos, how are you going to ventilate the bathrooms? Retrofit
| can be very costly.
|
| https://www.google.com/search?channel=fs&client=ubuntu&q=qub...
|
| I have seen some instances of older 1910s to mid 1930s era
| office towers in NYC retrofitted to (very high end, very
| expensive) condos.
| failwhaleshark wrote:
| Yep. It's not practical. It's often better to bulldoze,
| rezone, start over, and build high-density vertical housing.
| It's totally SimCity. :)
| engineer_22 wrote:
| I work for an engineering company, we lease our class A office
| space in a small professional office complex. We did share the
| building with an insurance company, they had approx. 50 employees
| in the building, but they left about a month ago. They decided
| those 50 employees will be WFH from now on, never to return to
| the office. The building is very quiet now. The management
| company laid off cleaning staff, turned off the water feature,
| and sold the art off the walls.
| erellsworth wrote:
| > Die-hard sofa-surfers can be persuaded back to the office with
| new rooftop pools, pet-friendly concierges and Michelin-starred
| canteens.
|
| No amount of perks are going to make an office more comfortable
| than my home. I don't care how good the coffee is or how many
| pizza days they have, it's not going to make up for wasting an
| hour or more of my life every day commuting.
|
| I'll never willingly go back to the office.
| greggman3 wrote:
| nice to be rich or live somewhere where you can have a nice
| office space in your home. I've never lived anywhere where my
| home was better than my office for work. My last job I had 4
| workstation class machines at my desk. 2 Windows boxes, one Mac
| Pro, One Linux workstation. 3 monitors. I don't have room for
| all of that at any place I've ever lived. In fact I barely had
| room for 1. Add to that a PlayStation and/or Xbox Dev kit and
| space for its display.
|
| to each their own
|
| can't wait to get back to the office.
|
| and I'm not willing to go live in some non walking friendly
| suburbia for a large house.
| not_jd_salinger wrote:
| > nice to be rich
|
| You don't have to be rich at all to have a nice office, you
| just need the flexibility to not have to be required to live
| in one of a handful a major metro areas where work is
| located.
|
| That's why we're in a housing boom, because you can pay 50%
| over asking for more than 2x your living space, _and_ reduce
| your monthly housing payment 20% or more.
|
| I'll have saved enough from moving to afford all of the
| office equipment you describe just in the difference between
| my old rent and current mortgage... not to mention that every
| tech company I've worked at would gladly provide that setup
| to remote employees that needed it.
| ufoolme wrote:
| > I'll never willingly go back to the office.
|
| I think there are alternatives to coming together in person
| than forcing everyone into an office, which if done with enough
| enthusiasm would be more productive and enjoyable for everyone.
|
| Teams might be better having mandatory lunches once in awhile
| at a nice restaurant instead having mandatory onsite office
| time. Better the team's performance, the better the restaurant.
|
| Think about the money that having an office costs, and then
| think about how it could be better spent on team based
| experiences and growth activities.
| silicon2401 wrote:
| Ditto. I'm not a sofa-surfer, I'm somebody who doesn't need the
| office to feel content or have a social life. You can have
| catered food 3x a day, a top of the line gym, a race track,
| zipline, whatever you want, and I couldn't care less. I have my
| home and my family and I have zero desire to leave it for work
| reasons. Hopefully you have more leverage; I'm not confident my
| currently remote employer will keep things remote forever. But
| I've definitely decided that after this job I'll never work an
| office-based job again if there's anything I can do to help it.
| Clubber wrote:
| Not to mention the amount of CO2 emissions from the ritual of
| driving to a place and back every day, then to a lunch and
| back. That seems to not be mentioned in this dialog.
|
| Early on in the industrial revolution, companies would send
| work to their workers for home work. Making cloth and whatnot.
|
| I'm guessing this batch of "pro office" articles is just paid
| adverts / propaganda from members of the commercial real estate
| industry to shift perspectives.
| MattGaiser wrote:
| If companies were willing to invest, they could do a decent
| job, but they usually have an open concept with rows of tables
| and cheap office chairs.
| MattGaiser wrote:
| I am quite interested in seeing how the pull by employees for
| more WFH plays out. There is lots of discussion of quitting by
| people over it, but how many actually will?
|
| I can see that deciding the future of offices. Do employees hold
| firm on these demands or just return to the office grumbling?
| svavs wrote:
| This is something that has come up within our company (we are
| still waiting on official guidance). I love WFH, for all the
| reasons you've read in other posts.
|
| If we have to return, I won't quit. That's reckless, imho. But
| my resume will be updated and I will be open to remote
| positions. Many of my colleagues feel the same way.
| MattGaiser wrote:
| > If we have to return, I won't quit. That's reckless, imho.
| But my resume will be updated and I will be open to remote
| positions. Many of my colleagues feel the same way.
|
| This is what I assumed it would mean. Not that people would
| spontaneously quit, but that there would be some 30% of the
| workforce looking to be out the door.
| Clubber wrote:
| I would assume that number would be substantially higher
| for at least IT department type workers.
| FearlessNebula wrote:
| Studies are showing closer to 55% than 30%
| svavs wrote:
| The reason I wanted to be clear about that is I have heard
| stories about people quitting on the spot.
|
| I believe the delay in my company releasing their plan for
| return to office has a lot to do with IT. We are having
| issues with finding enough folks as is. I couldn't imagine
| what it would be like if 30% put their notice in.
| otoburb wrote:
| >> _Do employees hold firm on these demands or just return to
| the office grumbling?_
|
| Many such employees from this vocal minority will be cajoled
| back by employers allowing 1 WFH day. Perhaps more senior
| employees will be offered 2 WFH days, which to be fair would
| cut long commutes down by 40% per week.
|
| In most such scenarios it seems companies will still require
| enough capacity for "peak" usage and instead of sharply
| reducing footprints will perhaps only delay their office
| expansion plans as they grow their staff.
| failwhaleshark wrote:
| I don't know. I know a VP Engineering who negotiated a 2 week
| office / 2 week remote WfH arrangement at his homestead in
| Oregon. I think people can negotiate if they have the
| leverage to do so, be it collective action with many "lowly"
| employees or individual, high-status employees.
| throwawaysea wrote:
| One issue that isn't addressed by hybrid work models is the
| cost of living, availability of space, and neighborhood
| character. Those seeking a more suburban life or rural life
| can make that happen with fully-remote jobs, and in doing so,
| they can also find cheaper houses, get more land, and have a
| community that is different from what an urban location
| offers. But if you still have to to the office a few times a
| week, then that means you need to live within a commute
| distance - which limits the kind of lifestyles employees can
| have.
| [deleted]
| cptskippy wrote:
| When it was announced that we were downsizing our offices
| and everyone was given the option to WFH if they wanted.
| One of my coworkers has been building his retirement home
| in a remote part of Maine. He immediately began looking for
| reliable remote high speed internet options to accelerate
| his timeline.
|
| Being able to move into his retirement home early would
| dramatically reduce his cost of living because he would
| sell his current home and actually hasten his retirement by
| a number of years.
| not_jd_salinger wrote:
| > Do employees hold firm on these demands or just return to the
| office grumbling?
|
| My career long experience has been that with any major hits to
| quality of life at a company: not every employee follows
| through, only the good ones.
|
| While the switch to WFH might be a new issue, there have been
| continually waves of quality of life changes at companies
| durning different stages of growth. An obvious one is direct
| cuts to benefits, but others include rapid decrease in perks
| offered, change in vacation policy, change of office location
| etc.
|
| In my experience good employees are quick to change whenever
| the signal from employers changes from "we respect you are want
| to reward you" to "we obviously don't care, or can't afford to
| care".
|
| This happens all the time in startups that lose their
| trajectory. Snacks disappear, flexible work hours become more
| rigid, bonuses shrink etc.
|
| So long as there are competitors out there who still offer
| these perks, good employees will leave often within a few
| months of the change. This causes a cascading effect where
| there are less good people on the team, so more and more people
| leave. Even if you don't care about perks, you care about good
| team mates.
|
| I have seen multiple companies where after a major shock like
| this nearly all of the best and brightest are gone within a 6
| month window.
|
| What's funny about WFH is that the people that like it, like it
| so much they'll take a lower total comp to WFH. In the case of
| all the other perks I mentioned, a company has to pay more to
| keep them (and top talent). Sometimes it's just not possible to
| do this. With the return to office you're effectively spending
| money in drive out your top talent.
|
| I'm sure plenty of companies will still do it, but I also
| suspect many companies that are looking for an edge will get an
| easy win by remaining remote friendly.
| seaourfreed wrote:
| Someone means the building owners.
| thrill wrote:
| "Someone" always, eventually, means the taxpayers.
| failwhaleshark wrote:
| Another point to consider: while one alternative is butt-in-seat
| mentality, WfH shifts the infrastructure, space, and
| social/professional networking costs onto employees while
| increasing domestic efficiencies, cutting commutes, emissions,
| and transportation costs. It does seems like turning employees
| into contractors, to a degree, like requiring Lyft/Uber drivers
| to provide their own vehicles and eat the maintenance and
| depreciation costs.
| silicon2401 wrote:
| I agree with your sentiment to a degree, but I disagree with
| your implication that any expense spent on work makes you a
| contractor. Almost all workers have to buy their own clothes,
| bring their own lunch, and find their own time to sleep and pay
| for medical needs. Personally I would even buy my own laptop
| for work if it means I don't ever have to go to the office.
| failwhaleshark wrote:
| I muddled the point. Not as a contractor literally, but as a
| "sharecropper" who must provide more things themselves
| instead of work providing them.
|
| > Personally I would even buy my own laptop for work
|
| This reduces your income if work would pay for it. This
| reminds me of some jobs where employees have to buy their own
| uniforms, equipment, etc. as the point I almost made.
| silicon2401 wrote:
| > This reduces your income if work would pay for it.
|
| I agree; I guess my personal point is that I don't remotely
| care about anything as much as I do the ability to wfh.
| After that is salary, after that is other comp. Offer me a
| fully-remote job at an acceptable salary and you've got me
| very interested. In contrast I've flat out turned down
| recruiters, including FAANG, when I asked about remote
| opportunities and they say they maybe will do a hybrid
| model in the future.
|
| At the end of the day if I'm making a good salary and can
| work wherever I want to in the US/world, nothing else
| matters to me too much.
| slavapestov wrote:
| Giving employees the choice to work remotely or come into an
| office is the best approach. There are tradeoffs to each, and
| it should really be up to the individual to decide what is best
| for them.
| fock wrote:
| so? Maybe get some more employees into the public service and if
| the funds go bust make sure that noone ever can try to play the
| game by making land public for eternity (land != buildings!).
| [deleted]
| alfiedotwtf wrote:
| Running a business takes on risk in return for reward. One of the
| risks of being a landlord is having no tenants. News at 11.
| mhh__ wrote:
| Given that my first proper programming job is going to be remote,
| I feel like I'll not only be less productive since I can get
| distracted but also unable to really meet the clever and
| interesting people that I'll be working with (I.e. a Jitsi call
| is not a proper conversation in my books at least).
|
| As far as problems go it's a fairly "first world" one (as the
| saying goes), but it is something I think about.
| onli wrote:
| A Jitsi call is totally a proper conversation. You learn by
| working with developers more capable than you, by getting
| advice, and most of all by planning feature and solving bugs.
| None of this needs an office.
|
| The "not getting distracted" thing can be a problem though.
| It's not for me, simply follow work hours. It's also less an
| issue I feel when you work closely with another (remote)
| developer. There will be PRs to review and PRs to deliver, that
| should motivate you easily. But for the record, you can also
| get distracted in an office - maybe more easily even.
| jbjbjbjb wrote:
| I think if you're lucky to work with smart people just being in
| the environment can be fulfilling and enjoyable for the
| atmosphere even if you're not directly learning anything. But
| for actual learning I don't think the office environment adds
| much. Pair programming is useful but today's remote tools are
| way better than crowding around a desk.
| silicon2401 wrote:
| Your fear assumes that working in an office is going to be the
| opposite of those things: more productive, less distracted,
| better socializing. At my first job, all of those were true. My
| coworkers were rude and unfriendly; I personally find any noise
| from other people distracting; and I focus better at home
| because I can take breaks as needed (like lie in bed for a few
| seconds if my back hurts).
| [deleted]
| FearlessNebula wrote:
| This is a logical fallacy. Studies show that there are fewer
| distractions at home.
|
| Also, anecdotally, my team lead and tech lead see no
| discernible difference in their ability to help teammates, and
| our interns are just as productive and participate in just as
| many help sessions.
| AnimalMuppet wrote:
| I suspect communication happens better at the office. Not
| necessarily formal communication - you can do that with a video
| call or an email - but the other stuff. That snippet of
| conversation you heard over a cubicle wall or in the break
| room, that told you about an infrastructure change that your
| code needed to handle? You're not going to hear that at home.
| That co-worker who saw you in the bathroom and asked how it was
| going, and you whined about the bug you were trying to find,
| and they gave you a suggestion that saved you two days? That's
| not going to happen at home.
| dmitrygr wrote:
| I am tired of hearing about "snippet of conversation you
| heard over a cubicle wall" nonsense!
|
| NO! We _all_ wear noise cancelling headphones to avoid that
| so we can ... work, so this is 100% total bullshit.
| AnimalMuppet wrote:
| I'm getting the opposite from my co-worker who spent a year
| out of the office, complaining about how out of the loop he
| was. And he's a manager.
|
| Oh, yeah. He was complaining about the noise, pre-Covid.
|
| So your last paragraph seems to be a bit overstated. It may
| be true for you, but you state it like it's true for
| everybody, and it's not.
| GiorgioG wrote:
| My first programming job was remote (the company had a tiny
| office at the time) - this was almost 20 years ago to this day.
| Distractions weren't a problem for me, the main issue was fear
| of asking questions (i.e. spinning my wheels because I was
| afraid to appear dumb.) Once I got over it, started asking
| questions on Lotus Sametime (chat system) - things got better.
| My only advice to you is...don't spend too long spinning your
| wheels!
| maxrev17 wrote:
| Wheel spinning is good advice! Working alone allows for
| concentration, not distraction. It also sometimes forces you
| to reach for resources which are close to figure stuff out.
| Reading is an old friend!
| cptskippy wrote:
| > I feel like I'll not only be less productive since I can get
| distracted but also unable to really meet the clever and
| interesting people that I'll be working with ...
|
| Honestly it's what you make of it. One of the teams I work on
| presently consists entirely of remote staff now. I originally
| worked in the office but no one else did, now we're all remote.
|
| The team is by far one of the better ones in our org and
| everyone gets along really well. It took me a while to warm up
| to everyone but some of the newer members eagerly engaged the
| group and have embedded themselves much more quickly.
| mhh__ wrote:
| I don't doubt I can be creative and write good code - I'm a
| good programmer, and I'm working on something that I'm
| interested in (I'll programming language implementation to
| keep it short), it's more of a thing where I like the idea of
| bouncing ideas off people and kind of maintaining a good
| separation of ideas - both things I'm not very good at when
| I'm basically alone at the desk.
|
| The point about networking is quite cynical but I'm working
| in a fairly nepotistic sector (but well-compensated) so a few
| connections can go a very long way.
| gota wrote:
| Your comment hints at something I think will be a major factor
| in tipping the scale for all-remote or all-onsite: office
| _culture_
|
| I know a lot of people twist their noses at the mention of an
| office culture (it does appear most when it is negative), but
| the value of positive-culture cannot be underestimated. Teams
| that bond well work best. Can people bond over video calls?
|
| These are going to be interesting times.
| mhh__ wrote:
| I can definitely bond I just need cues that the call doesn't
| give me
| korethr wrote:
| If there is a collapse in the market for office real estate,
| given the shortage of housing in various US markets, I would not
| be sad if some of these large office buildings were converted to
| mixed residential & commercial use. Yeah, being able to live in
| the same building as where you work and just take elevator or
| stairs to your employer's office would be an expensive luxury
| option that probably only upper-middle and upper classes could
| afford. But, it would take some pressure off less fancy housing
| options like regular apartments, duplexes, and single-family
| houses. It wouldn't address the problem of investment corps
| snatching up any and all residential real-estate they can in the
| face of other fiscal policies. But, when in your local market, a
| 1500 sq ft 1960s construction house with little-to-no insulation,
| yard filled with sun-scorched weeds, and in need of 10s of
| thousands of dollars repairs to the building envelope goes for
| half a million dollars cash sight unseen in less than a week
| after it goes on the market, any policy change that improves the
| supply and demand equilibrium helps those who just want to live
| in the available housing supply.
| failwhaleshark wrote:
| This would be very expensive since commercial office buildings
| and residential units are vastly different in terms of
| construction, building codes, utilities, and layouts. Sure, you
| could chop them up into artist studios and lofts, but they
| would be extremely expensive.
| majormajor wrote:
| Even if you have to tear down and rebuild, rezoning and
| conversion here seems much more politically achievable than
| up-zoning existing residential areas. On the one hand, you
| have to fight current residents who would be displaced, as
| well as their neighbors who don't like change. On the other
| hand, you have the ability to make the land valuable still by
| repurposing it for residential instead of having an empty
| wasted tower.
| failwhaleshark wrote:
| I guess it's an opportunity cost calculation of convert vs.
| rebuild. Some affluent areas where the inventory of fancy
| lofts is low would likely support it, while lower-income
| areas it would be best to demo and build a giant tower of
| micro apartments.
| nathantotten wrote:
| I think if somebody gets creative about it some of that cost
| can be reduced. Likely the big drivers in cost are going to
| be running utilities to support different uses (kitchens,
| showers, etc.) Maybe a new type of living space can exist
| where kitchens are shared? Or where there is a gym with
| private spa-like shower/changing space on a lower floor. I'm
| not saying these are good ideas (I certainly wouldn't live in
| that sort of place now), but maybe somebody can figure it
| out.
| korethr wrote:
| Oh absolutely. The collapse in the market for office real-
| estate would have to get particularly bad for the owners of
| those properties go for that option. The owners of these
| properties are in the business to make money. If nobody wants
| their property for offices anymore, they will have to find
| some new use for their property that they can profit from.
| The condos/studios/lofts/whatever resulting from a conversion
| would indeed need to command high rates to make such a
| conversion worth it. Like I said, the housing created by such
| an option would be an expensive luxury probably only
| affordable by the upper-middle and upper classes.
|
| However, given the (IMO probable) positive effects for less-
| than-rich, I would not protest such an outcome.
| bearjaws wrote:
| I doubt anyone with upperclass wealth will consider moving into
| a retrofitted office building. The quality of the housing will
| not be equal to a modern tower. Even running water and waste
| water will be very problematic. The complete lack of amenities
| of modern towers built for housing, gym, pool, recreation
| center, balconies... Depending on location parking could
| basically be impossible or they have to convert limited office
| parking into resident parking.
|
| IMO we are more likely to see these become "luxury apartments",
| which means the expense of luxury minus the actual luxury.
| swagtricker wrote:
| I highly doubt that could be done profitably. The water
| infrastructure support alone (increased water usage for
| showering, laundry, dishwashers) might kill it when you
| consider the sparse "office" kitchenette on every other floor
| and centralized shared restrooms (without showers) as they're
| currently designed. Then of course there's HVAC controls,
| external/internal wall insulation concerns, noise reduction
| issues, additional wear & tear on elevators through
| significantly higher usage... You get the idea.
| uncertainrhymes wrote:
| I lived in an ancient finance building that was converted to
| residential in the 80s. All the layouts were bizarre, twisting
| around to give every unit the barest slice of window. The bike
| storage in the basement was a vault with a 24" thick door that
| was just left there because it would have been impossible to
| move.
|
| Converting a modern building would be very expensive.
| Converting a hotel on the other hand -- perfect. They already
| have plumbing and fire separation. An open plan office is just
| a shell.
| X-Istence wrote:
| Anecdotal I admit, but I have a large group of friends who are
| currently shopping new employment because their company is
| looking to have them back in the office full time and they don't
| want that, they want to continue working from home and it is now
| a line they are drawing in the sand.
|
| In the past 4 weeks I have received 6 resumes for people looking
| for remote work because they much prefer to live outside the city
| center and have more room for activities, and they don't want to
| go back to commuting for hours per day or sitting in traffic.
| nobleach wrote:
| I'd say after reading about this phenomena in other media, it's
| fairly common for tech workers right now. I understand the
| frustration of management to a certain degree, "what do you
| mean you don't want to come work in this beautiful expensive
| office now??? We have coffee, video games, etc!"
|
| But the reality is I NEVER wanted to drive an hour for ANY
| office. I did simply because I had little choice. Now that I
| have a choice, I'm going to maximize it. It really is all about
| the travel time for me. I enjoy being in an office simply
| because it tends to make my day fly by... and I usually return
| home with great stories to share. But, the cost is way too high
| (time is money).
|
| When I worked for Overstock, the CEO made such a big deal about
| this beautiful edifice he had erected.... The Peace Coliseum,
| it's called. The thing is, no one ever ASKED him to build it.
| As an engineer, I was quite satisfied at our old rented office
| space. But I get it, often when you're at that level, the
| edifice is an extension of your ego.
| failwhaleshark wrote:
| This reminds me of the dotcom times. My mom worked in accounting
| for Harmonic Inc. when they signed a long-term lease for an
| enormous campus. That was a risky move during a time in the
| Valley when prices were high and vacancy rates were low. Much of
| the campus stayed vacant for sometime.
|
| IIRC, what do they call the primary cause of recessions? OXPC -
| Over eXpansion of Productive Capacity
|
| In residential real-estate, which is more inelastic, it makes
| intuitive sense that supply (inventory) and demand (occupancy +
| influx - outflux) moves prices more vigorously; look at SF and
| NYC.
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