Technology

Because the executives have money in, or relationships with, investments funds that are heavily vested in commercial real estate. So it might save money for the company, but the knock on effect of devaluing that real estate is a threat to many wealthy. So no matter how wasteful it is for the companies in question, the personal conflicts of interest at exectutive/board levels will ensure the farce continues until those companies are replaced or have no alternative.

Yes but there are some complicating factors.

Companies may actually need to provide an office for some employees who really need a place to work. Most people want to work from home but there are some who don’t have a suitable space and need something. And think about your IT crew: they need a physical space to store and work on hardware.

An office also gives the company a space where they can conduct job interviews, sales presentations, or corporate meetings. They may not be willing to just exit an entire city have no physical presence anymore.

Then there is the issue of blame: if they eat the real estate loss and just the lights out, whose fault is it? Someone gets the blame or has to at least put that loss on their books. They’d rather direct the blame at employees for not wanting to work.

And finally there are some execs who actually believe the office is better and will die on that hill.

Add up these factors and I think sometimes it tips the balance.

Yes, for the companies offering remote work downsizing your real estate footprint can be a huge cost savings.

For the real estate industry, however, the effects are devastating and the future looks terrifying. These companies are absolutely shitting themselves.

Outside observers tend to get these effects mixed up, because there is some bleed over, albeit in weird ways. Basically, yes, Amazon would be better off using less office space, but Amazon share holders all have huge investments in real estate (because it's considered the safest bet in the universe) and they're watching their portfolios with mounting horror. So even though it doesn't benefit the company, the shareholders are all big on getting people back into the office so that the unbelievably valuable global office real estate industry doesn't face an existential threat.

This happens to align nicely with all the ways in which managers prefer having employees in the office because they prefer keeping people on a short leash (extra time to do all the shit you want to do means extra time for things like learning new skills and hunting for a better job), and of course many of those managers are also heavily invested in real estate themselves.

Its all a big complicated mess with many other factors that I'm glossing over. Real estate is in there, and it's certainly a reason, but people are oversimplifying when they say it's the reason, at least in my opinion.