A lot of times, when people discuss the phenomenon of employers ending work-from-home and try to make their employees come back to the office, people say that the motivation is to raise real estate prices.
I don’t follow the logic at all. How would doing this benefit an employer in any way?
If nobody is using any buildings then there’s an indefinety supply and no demand.
Buying 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.
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.
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 stock options fully vested and cashed.
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 more successful in the future if I can make a lot now by sending it into bankruptcy today?