Reading this blurb from the Business Review about the dynamics of commercial office space in 2024 suggests some interesting (and troubling) parallels between the direction landlords want to take the office space market, and the direction institutes of higher education have gone in this country over the last thirty years.
https://www.bizjournals.com/bizjournals/news/2024/04/15/office-market-survey-leasing-decisions.html
As in my last discussion on this topic, no mention was made of the location of offices relative to workers’ homes. (Short commute times do not seem to be considered an amenity, for the purposes of these articles.)
But consider two passages from the article. This one about the kinds of improvements landlords anticipate making in an attempt to make their offerings more appealing:
For many landlords, that means investments in tenant and common spaces at their buildings, with 47% of landlords surveyed saying property improvements were a key priority for them this year.
That includes technology investments, with 33% of landlords saying they were investing in tenant-experience technologies at their buildings. That percentage ranked ahead of 31% who said they were investing in outdoor communal areas, 30% who said property operations, 27% who said food-and-beverage options and 27% who said fitness centers.
Ashley Fahey, April 15, 2024
and this one from further down in the article:, regarding how they plan to fund those improvements:
“[Landlords are] trying to tie the amenities in the building to the lease, if you will, and make those as an additional concession,” Masiello said.
Ashley Fahey, April 15, 2024
As any member of the millennial or gen-z generations (or any gen-x or older millennial parent) can tell you: the cost of room and board and activity fees at college is absolutely enormous, and as many colleges move to make residence on campus mandatory for two or more years, it gets bundled into the increasingly untenable cost of higher education.
Much of that cost comes from the almost country-club like nature of modern college campuses. An essay1 I read several years ago pointed out that because comparing the actual pedagogical value of academic programs is really hard (and possibly quixotic), colleges seek to differentiate themselves in the eyes of prospective students with ever-flashier campuses and more elaborate student programs. These amenities don’t really do much to improve the actual acadmic offerings of the colleges (their ostensible raison d’être), but they do hike up the cost of attendance.
Similarly, I would expect the cost of an office lease to start rising, as landlords seek to pass onto tenants the increasing costs of these new amenities. They won’t do much to improve worker productivity (the ostensible reason a company wants its employees in an office), but they will increase a business’s cost, and much of that cost will be passed onto us as consumers or passed onto the employees of the company (whether they want the amenities or not).
- It could also have been a Twitter thread, and I don’t remember the author. I can’t find it at the moment, but if I do, I’ll link to it here ↩︎