[HN Gopher] Remote work is starting to hit office rents
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Remote work is starting to hit office rents
Author : warrenm
Score : 64 points
Date : 2023-03-22 19:55 UTC (3 hours ago)
(HTM) web link (www.axios.com)
(TXT) w3m dump (www.axios.com)
| e_i_pi_2 wrote:
| This seems good right? Lowering rental prices means lower
| operational costs, so more of the money can go to the employees
| ideally
| conanbatt wrote:
| If anything it increases company profits, why would companies
| give the rent money back to employees?
| xwdv wrote:
| Why would any profit go to the employees? You didn't want to
| come to the office and be a team player? Now you don't get the
| share of the profits.
| [deleted]
| toomuchtodo wrote:
| > Small and midsized banks (those not among the top 25) currently
| hold 67.2% of all outstanding commercial real estate loans, Axios
| recently reported.
|
| https://www.axios.com/2023/03/21/small-bank-struggles-could-...
| wwweston wrote:
| From what I've heard, certain real estate enterprises including
| a substantial portion of commercial real estate can get
| financing on their _nominal asking rent_ , whether or not they
| actually have tenants paying that rent.
|
| I'd imagine these enterprises still need to find a way to make
| their payments on any related loans, but one wonders what
| happens to banking revenue if a bunch of them get caught in the
| same crunch.
| onlyrealcuzzo wrote:
| > I'd imagine these enterprises still need to find a way to
| make their payments on any related loans, but one wonders
| what happens to banking revenue if a bunch of them get caught
| in the same crunch.
|
| I'd imagine the government will just bail out commercial
| landlords.
| balderdash wrote:
| The thing is the average duration of those loans is ~5yrs, so
| the ~15-20% of the portfolio that needs to refinance this year
| was stuff that got financed five years ago, and probably has
| pretty decent loan to values given that the property values are
| in most cases up from where they were 5 years ago.
|
| It's the stuff that was financed in the past couple of years
| that is going to be the most risky, but unless rents fell off a
| cliff, has a bit of runway to play out.
| Melatonic wrote:
| Yea this sounded scary to me at first but now that I think
| about it does not seem all that bad.
|
| If you were dirt rich it is probably a great time to be in
| the skyscraper buying market
| loa_in_ wrote:
| Armchair opinion: They should sell the properties to make up if
| they're having a deficit. Not predicting how this market
| situation would play out sounds like mismanagement.
| dylan604 wrote:
| who is buying these properties at this moment?
| sam_lowry_ wrote:
| I know, the discussion is US-centric, but last year Europe
| saw lots of binge buying of corporate office spaces by the
| local governments in view of conversion into refugee centers.
| biggoodwolf wrote:
| Who's gonna pay the real estate taxes? LOL
| escapecharacter wrote:
| Unhoused homeless people actually have a non-zero cost to
| the cities they're in, whether it comes to incarceration
| or other costs.
|
| Cities could convert these office spaces into homeless
| shelters and save money.
| InitialLastName wrote:
| I don't know if you're asking to be tongue-in-cheek, but
| this is a salient question.
|
| Normally, government buildings ("Held for public use")
| don't pay property taxes. This can be a serious issue in
| municipalities where large portions of the non-
| residential real estate is held by a higher-level
| governmental entity, such as Jackson, Mississippi, where
| the state government makes up a large bulk of the
| functional real estate, and thus does not contribute to
| the municipal tax base (while still making substantial
| infrastructural demands).
|
| [0] NY state example:
| https://www.osc.state.ny.us/files/local-
| government/publicati...
| jimt1234 wrote:
| The San Diego market is up? Anyone know why? Everyone I know in
| San Diego is WFH now. I thought we'd be closer to the San
| Francisco market.
| Melatonic wrote:
| Probably government jobs? There are a lot of military and
| contractors down there and spending is probably way up
| om42 wrote:
| Probably because of biotech, which similar to Boston also going
| up. And maybe defense.
| ianlevesque wrote:
| Good, this has been overdue for a massive correction for years.
| lsllc wrote:
| A little surprised to see Boston increasing rent activity, but I
| think Boston has been slowly losing its footing on the tech
| ladder in favor of Biotech (take a look around Kendall Sq). Can't
| really WFH in Biotech if you need lab space.
|
| Probably started when DEC was consumed by Compaq ... even YC
| moved out (maybe it's the weather).
| r_klancer wrote:
| (Sitting in Kendall Square right now). I'm not surprised,
| though we're saying the same thing. _So. Much. Biotech._
|
| This is why the WFH revolution didn't make me panic when I
| discovered how much it would end up costing to renovate a small
| house 1.5 miles from here. So much biotech, and for that you
| need to be in the lab at least some of the time. The MBTA's
| recent troubles ("global slow zone", anyone?) only make it
| "better", like I paid them off or something.
| neilv wrote:
| I'm sitting just up the street right now, and -- hoping to
| buy a walkable nice home in town someday -- wholeheartedly
| counsel the East Cambridge biotech people and the Kendall
| MSFT/GOOG/etc. outpost people to make a _luxurious and
| convenient commuter rail ride, between work and BFE_ part of
| their daily lifestyle.
| dbcurtis wrote:
| I think the "lab space" requirement is going to drive a lot of
| the WFH-or-not office space planning among employers that don't
| fall into the "come in for no reason other than I said so"
| category.
|
| In my case, I work in robotics. Somebody working on the
| perception stack software and going to the occasional zoom
| meeting has little reason to show up at the office beyond
| random hallway meetings and free micro-kitchen snacks. A
| machinist in the prototyping lab, on the other hand, needs to
| be in front of the giant, expensive CNC machine. For me
| personally, I have a mix of coding days and lab days, and WFH
| or go in according to the tasks of the day.
|
| Clued-in companies are going to adjust their real-estate mix. I
| predict a drop in the fraction of commercial space that
| consists of carpeted offices.
| flandish wrote:
| I agree. My role is software engineering, but in industrial
| healthcare automation - so I come in when I need to make
| stuff move in meatspace. Mostly a few days a week. We don't
| really have standard offices though - it's either a cube or
| in the lab 50/50 hoping the magic smoke doesn't leak out
| because I coded that thing wrong...
| phkahler wrote:
| >> I think the "lab space" requirement is going to drive a
| lot of the WFH-or-not office space planning among employers
| that don't fall into the "come in for no reason other than I
| said so" category.
|
| I wonder if there will be a another push for those jobs to go
| to lower cost countries.
| dr-detroit wrote:
| [dead]
| CrimpCity wrote:
| There may be a lot of cost savings in labor but there's a
| huge risk in technology transfer & following lab protocols.
| In biotech lab culture and best practices are actually a
| tighter package than "low" skill factory work. So you get
| really variable outcomes when you unbundle the lab.
| 908B64B197 wrote:
| > I wonder if there will be a another push for those jobs
| to go to lower cost countries.
|
| They are lower cost for a reason...
| gabythenerd wrote:
| Some of those jobs are already in lower cost countries but
| some can't be outsourced because they rely on military
| contracts (can only be worked on by US employees).
|
| I once worked on an offshore company that did staff
| augmentation for american robotics companies, we did mostly
| software because the hardware was illegal to export.
| bcrosby95 wrote:
| I don't know about biotech, but my brother works in a lab with
| lasers and he's still WFH 3-5 days/week. Experiments are done
| in the office, but planned and analyzed at home.
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