I like the model, but I question long term economic viability of owning that much office space with mostly low utilization and only occasional spikes.
For instance, even before the remote work shift in 2020 many cities were heavily competing on conference and hotel space allocations for an interesting variety of economic reasons (tourism dollars that float alongside, for instance). As more "corporate Downtown" downsizes their office footprints to go more remote, some of that real estate inventory is going to go to apartments and condos, but also I would expect that there would be just as much pressure to convert it to hotels and conference space and WeWork-style hoteling office space.
I wonder if that's going to snowball into dirt cheap conference prices in a growing list of cities. Especially if you start to factor in non-traditional "hub" cities (especially those non-traditional for tech). I've heard that's an appeal of Denver, Colorado as an annual onsite retreat city for remote first orgs as it has a large conference and hotel inventory that still has some very cheap periods outside of the usual tourist periods. I can point out that cities like Louisville, KY and Indianapolis, IN have massive inventories of hotel and conference (and exposition) space with some incredibly cheap calendar windows and still heavily competing among each other for more hotel/conference inventory every year. (I can also suggest which of those two cities in particular has better tourism options, but that may as much be hometown bias, so I'll save it.)
You could do a lot of travel with a 5-7k budget per month.
There are a ton of variables- agree more analysis is needed.
Or just downsize the office to the point where utilization is high and rent out co-working space themselves during the "spikes".
Oh for sure it doesn't make any sense, and is driven solely by the inertia of already having the office space. You'd let it go over time as leases lapse until you're down to just a tiny amount that's facing high utilization.
Would there be opportunities for further efficiency by fully closing them and renting space a few times a year? Possibly, yes. But that doesn't mean the current model isn't an improvement on the previous one.
It didn't really take off afaik, but with more bigger and stable tenants making a larger bulk of these it might actually take off a bit as a model.
1) Open offices for collaboration
2) Shared offices for collaboration (like co-working spaces) with reservations, as well as off-site retreats to places like Hawaii. This is cheaper than leasing in big cities.
3) Cost-cutting during the next recession killing those fancy co-working spaces and retreats
4) Loss of team cohesion
If you spend 10M/annum on salaries, is your 1M/annum for an office really a big burden?
