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?

  • DogMuffins
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    1 year ago

    So maybe they lower lease rates to attract new tenants.

    The golden rule of commercial leasing is that you never, ever, reduce the lease cost because the value of the property is calculated directly from lease value. Reduced lease cost is reduced property value. In valuing a commercial property the lack of a tenant is not important.

    tenants stuck in higher rate leases start doing the math on penalties for breaking their existing lease vs the new prices.

    Generally with a commercial lease your only real options to exit are to find someone to take on your lease. If lease prices have dropped then no one will want to take on your dud lease.