this post was submitted on 29 Dec 2023
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Work Reform

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[–] stockRot@lemmy.world 35 points 11 months ago (5 children)

Why are shareholders happy to hear that businesses are spending unnecessary money on renting office spaces?

[–] Duamerthrax@lemmy.world 39 points 11 months ago

Because they're disconnected from reality. Same reason they're fine with co2 emissions even though they live in the same biosphere.

[–] go_go_gadget@lemmy.world 29 points 11 months ago

Because most shareholders are boomers.

[–] Blackmist@feddit.uk 23 points 11 months ago (4 children)

Because they also hold shares in the companies that rent offices.

None of these businesses have given up their office spaces. They're also likely on very long term contracts. Not using them is wasting money.

[–] HauntedCupcake@lemmy.world 26 points 11 months ago (1 children)

I agree with you, but want to point out that not using offices is just perceived as wasting money. They don't actually lose any money if the office is used or not, they might even save money on utility costs and supplies. It's just sunk cost fallacy.

[–] el_abuelo@lemmy.ml 14 points 11 months ago* (last edited 11 months ago)

That's correct, and the board doesn't want to perceive wastage....so whoever is holding the bucket for entering into the lease will be pushing for mandated returns. This is likely the CEO or COO and so holds huge sway and likely ends up in said mandate being implemented.

My last company entered into a new lease during covid, while also making "the way we work has changed" noises. They then spent millions on the refit. And then were shocked that people weren't coming in to admire their amazing space they'd just spent millions on.

[–] KevonLooney@lemm.ee 3 points 11 months ago

But companies are owned separately. Reducing office costs would increase the value of the renting company while decreasing the value of commercial real estate, regardless of their ownership.

Investors owning both real estate and the companies renting that real estate are not colluding. One investor who owns 90% stocks and 10% real estate is not going to help out another investor who owns 90% real estate and 10% stocks.

[–] Ilovethebomb@lemm.ee 0 points 11 months ago

Because they also hold shares in the companies that rent offices.

Source?

[–] crsu@lemmy.world 5 points 11 months ago

They own REITs

[–] Ilovethebomb@lemm.ee 1 points 11 months ago

They don't, it's a statement that people are repeating because they heard it from someone else, with nobody stopping to actually think about it.

There is no conspiracy by CEOs to get people back to the office to prop up real estate values.