In a remote world, when are offices useful to a company? One thing I haven't heard talked about much is using the office as a component of your financial strategy.

If the space is leased/rented, it's a bonus perk. Not required for work to get done but if you want to pay for it, great, fine, spend the money.

If the space is actually owned by the company, it's an asset. This changes the game a bit. In a pre-remote world it's a necessary asset for work to get done. In a remote world, it's not needed but it does bank equity in a hard asset on the balance sheet that can be depreciated. You can also sell it, refinance it, borrow against it, etc. etc.

So there are some implications from this.

1. If locked into a multi-year lease, there's some sunk cost fallacy in using the space. Especially if you don't want to or can't sublease it out.

2. The move-out switching cost of going remote is a can that can be kicked down the road to the lease end, creating no incentive today to operate full remote. "We might as well use it at least half the week".

3. Some people like to work in the office! It may not be the most rigorous cost effective way to operate the business - 100% possible to be full remote and not pay for office space - but if the CEO, exec team, likes to work face-to-face in an office, it's already an expense on the P&L and easy to justify keeping things the way they are as a lifestyle perk. Especially with decent net margins including the office.

4. If you own the office, you get zero marginal utility out of it sitting empty. So you can lease out the space to other companies, or use it for your own people in some way. Any minority of leaders advocating for using the office internally can push the decision to not lease it out. See points above about this being a perk.

5. In the current market, selling that office almost certainly will be at a loss, esp. if leveraged. So the alternative becomes, keep paying for it and use it as you can.

If you remote perks from the equation the most important thing however is the company's financial strategy. If you cut your lease, put 30% into remote perks, team lunches, "onsites", and put 70% into FCF would that be worth it? If you sell your office, even at a loss to "market value" when you bought it, can you put that cash to better use as a capital investment in other projects? If you take a loss on the sale, can you use the loss strategically for tax purposes?

Remote work makes the office a flexible financial tool instead of a requisite cost center. That's a big thing.

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