
Pinterest cancels office lease in unbuilt project, citing work-from-home shift - CaliforniaKarl
https://www.sfchronicle.com/business/article/Pinterest-cancels-huge-SF-office-lease-in-unbuilt-15523170.php
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papito
People will still need to get out of the house. I hate working from home. I
need my commute to wake me up, but not TOO much of it.

I think the future might be shared work spaces (WeWork) but in suburbia - so
people can come to work, but not necessarily having to spend 4 hours a day on
a commuter train.

~~~
echelon
> People will still need to get out of the house.

I'm not sure if you're in a California city mindset, but it's easy if you move
to a suburb of a city like Atlanta. You can have over an acre of wooded land
and be less than an hour's commute to the city. It's super affordable too.
300k gets you 3000sqft and sometimes more.

If you're willing to pay double, you can have the same within thirty minutes
of the city. And there are still spacious priorities within the city limits.

~~~
ethbro
If you don't need a decent school zone, can confirm.

38 minutes from downtown. 3 acre wooded lot. 1900 sq ft house (currently
refinishing full basement). $135 when I bought, probably $200 now. In the
process of selling a much more expensive intown house, because there's no
point.

The biggest things suburbs need to do these days is revolutionize malls. Tear
up all the parking and retrofit empty store space into community-centric
things people actually want.

Big box -> co-working space, as new anchor tenant.

~~~
paul_f
Interestingly, if you go north of Atlanta, you can find examples of the new
"downtown" areas that have been built in the last few years to replace malls.
Avalon: [https://www.experienceavalon.com/](https://www.experienceavalon.com/)
Halcyon: [https://www.visithalcyon.com/](https://www.visithalcyon.com/)
Alpharetta City Center:
[http://www.citycenteralpharetta.com/](http://www.citycenteralpharetta.com/)
All 3 within 5 miles of each other

~~~
ethbro
Used to live down the road from Avalon. I'd say it's better than a mall, but
still too profit-first to be when I'd hope we're pivoting towards.

As context for others, Avalon is a mixed-use development, with restaurants and
shops on the first floor (of ~3). Definitely still anchor-tenant focused
(movie theater, larger clothing retailers) & restaurant weighted.

IMHO, the type of place you visit to do things, then leave. Not the type of
place you live.

But then, my opinion is that Atlantic Station should be nuked from orbit for
the sin of isolating itself from the transit grid, so I'm probably on the get-
off-my-lawn side of the planner/developer split.

~~~
treis
>IMHO, the type of place you visit to do things, then leave. Not the type of
place you live.

But then people pay very high rents to live. $1600 or so for a studio.

------
Guthur
I'm wondering if we are on the verge of a commercial property apocalypse. If
rents are eventually forced down in large metropolitan areas it will wipe out
billions of dollars in property wealth. Could make the GFC look like a blip.

~~~
code4tee
Things will simply evolve. People said the same thing about industrial
buildings in cities which are now thriving residential complexes. Lord and
Taylor’s flagship store in Manhattan went bust and was going to become a
WeWork, then when WeWork imploded the building was bought by Amazon and will
become their offices. There won’t be a “property apocalypse” but there will be
a “property evolution.”

In cities with diverse economies and a strong talent base this evolution
happens quite quickly. Elsewhere it happens more slowly, and thus it’s more
painful, but it will eventually happen there too.

~~~
mjayhn
That evolution is coming strangely close to us becoming company towns owned by
billionaires. Little Vendorvilles everywhere. I wonder how much property
Amazon will accumulate in the next few years.

edit: Oh, yeah, I pay rent and insurance to Berkshire today, guess I'm there.

~~~
xwdv
Life could be better in company towns. They can create ecosystems of jobs that
could better support the company's goals, and as the company reinvests funds
to improve the quality of life and attract talent and labor, you could see
improvements in things such as mass transit or perhaps a privatized police
force with better accountability.

~~~
aneesh297
This is satire right?

~~~
topkai22
The history of the company town is not all negative. Many company model towns
were truly built to provide a better quality of life for workers, albeit with
some very paternalistic overtones and often a desire to make them better
workers as well.

Interestingly, the modern US military base still often resembles a company
town. While not perfect, my impression is that life isn't worse then off base.

~~~
cheschire
You're a lower enlisted. You live in an apartment complex, sharing a stairwell
with 5 other lower enlisted families. One of you is tagged as stairwell
coordinator. It's now your job to get everyone in that stairwell to clean the
area regularly. If you fail, your boss hears about it.

You get promoted, you're now given duplex housing in the NCO housing area. You
now have a yard. Your grass grows too long. The military police ticket you,
and notify your supervisor.

You goto the store on post. A coworker is there. He's with some girl who isn't
his wife.

You goto the dining facility. You have to go to the dining facility because
your paycheck is automatically deducted $300+ a month because you are forced
to have a meal card, regardless of how often you eat there.

Just a few examples from people I know. Everyone tries to get statement of
non-availability so they can live off base.

~~~
xwdv
A company town has no inherent need to police such vanities or moral
character. It would be no worse than living somewhere with an HOA.

------
iso947
Office management companies are worried. In the UK they, as well as commuting
companies like Daily Mail Group, and overpriced sandwich shops like Pret, have
realised their entire company is reliant on millions of sheep trudging 2 hours
a day to an office block with no space to fight for a desk to have a day’s
worth of meetings on skype.

A large anti WFH campaign run by the people behind brexit and linked to trumps
campaign is set to start next month in the UK (the feelers you’re judge public
mood have already gone out)

~~~
ethanbond
No need to call anyone sheep for having jobs to feed themselves and their
families.

~~~
danjac
The wording is maybe a bit off, but the point about a media campaign is spot
on. To quote Karl Marx: "The Tories in England long imagined that they were
enthusiastic about monarchy, the church, and the beauties of the old English
Constitution, until the day of danger wrung from them the confession that they
are enthusiastic only about ground rent."

For example:

[https://www.theneweuropean.co.uk/top-stories/richard-
littlej...](https://www.theneweuropean.co.uk/top-stories/richard-littlejohn-
work-from-home-covid-19-the-daily-mail-1-6813025)

~~~
ethanbond
I think it’s worth asking what even _is_ the monarchy? You’ll find your answer
right there.

They’re landlords. Extracting ground rent from some of the most valuable land
on the planet for generations, which has made that family a supranational
entity even as nation states rise around it.

It always comes back to land. It has since the advent of agriculture: he who
owns the land owns everything.

~~~
danjac
For that matter, one could also include the Church of England:

[https://www.lovemoney.com/gallerylist/72713/the-
uks-50-bigge...](https://www.lovemoney.com/gallerylist/72713/the-
uks-50-biggest-landowners-revealed)

------
m0llusk
Some potentially interesting or amusing details: This project would make use
of a tennis club. Club members and tennis enthusiasts pressured the developers
to make room for a series of underground tennis courts so valuable recreation
space would not be lost, except of course during construction. Also, Pinterest
has two other large buildings nearby one of which was built such that it can
be extended upward as needed. Both of these buildings are now essentially
empty.

~~~
shuckles
Part of why they weren’t fully built out is that San Francisco’s Prop M caps
the square footage of office space which can be built in any given year.

------
lsb
Notably, they _paid $90M_ to cancel the lease.

~~~
stingraycharles
Which is perfectly normal between businesses; pay $90MM to get rid of a $440MM
lease contract. Heck, as a consumer, if I want to get rid of my car lease I
need to pay a hefty penalty as well.

~~~
Hnrobert42
The notable part is not that they _had_ to pay it. It’s that they _chose_ to
pay it. It reveals the magnitude of shift to WFH.

~~~
HenryBemis
Assumption: same performance, increased employee satisfaction, lower costs,
fewer expenses (company and employees).

Companies now just need a skeleton crew for IT Ops, HR, Accounting.

Especially for companies like Pinterest that have probably seen their revenue
explode, it's a win win win.

~~~
tonyedgecombe
Has their revenue exploded? I thought advertising revenue was down this year.

~~~
ckdarby
Etsy & Pinterest are both public companies and this info can be found in their
quarterly filings.

TL;DR Yes, revenue has increased. Etsy is spending very strong in advertising
with Pinterest getting large amounts of it.

Disclaimer: Position in both companies.

~~~
tonyedgecombe
Actually it seems to have flattened off:

[https://www.statista.com/statistics/995107/pinterest-
quarter...](https://www.statista.com/statistics/995107/pinterest-quarterly-
revenue-worldwide/)

~~~
ckdarby
I didn't entirely write what I meant correctly.

Etsy's revenue has greatly increase:
[https://www.statista.com/statistics/409407/etsy-quarterly-
re...](https://www.statista.com/statistics/409407/etsy-quarterly-revenue/)

A lot of Etsy's money did go to advertising. This has ended up in Pinterest's
pocket. The fact Pinterest is flat during covid and entirely being an
advertising company I consider still growth of revenue. The global advertising
spend has greatly decreased, it'll eventually pick back up.

But, yes, you are entirely correct, on a direct statement level, revenue is
flat.

------
vondur
I keep thinking this does not bode well for California. As more of these
software companies embrace work from home, we may see an exodus of high paying
jobs leaving the state for locations that are cheaper and better run.
California currently gets a large chunk of the state budget from income tax.

~~~
SpicyLemonZest
California was already a rich state before Silicon Valley, so while individual
cities might run into trouble, I don't think we should expect changes in
software job patterns to be a disaster for the state as a whole.
Pharmaceuticals, Hollywood, and agriculture can't really go remote.

~~~
vondur
I wouldn't bet on it. Hollywood has moved tons of filming out of the State,
and agriculture here is now being threatened by water reductions to farmers.
Pharmaceuticals I think is still doing well.

~~~
bluedays
There is not going to be a mass exodus from high paid workers in California
unless there is a mass exodus of perfect weather.

------
mherrmann
I see a lot of vacant street-level real estate here in Vienna, Austria. These
used to be shops and restaurants that I suppose we already on the brink before
the crisis. Does anybody have an idea what will happen to all this space after
the crisis is over?

~~~
purple-again
Augmented reality and or virtual reality “game consoles”. If I had a spare
billion or three laying around I would buy up some nice spacious commercial
real estate in all of the metro areas of the US. Construct the piping and glue
to present a uniform framework for every single one of those locations. Think
for now a single 20x20 square room, something achievable regardless of whether
it was an old Best Buy or an old grocery store.

These locations become your PlayStation or game console. You need your own
killer content like Zelda or something to get off the ground, but once you can
offer development tools that offer access to such a large audience, the
entrepreneurs will come and start building content for you.

You provide a set number of props like staircases, blocks, etc that can be
arranged into a specific game rooms layout and then painted by the developers
game giving you much more room than just a big open area to work with.

There are some really good POC’s out there, but it’s just a single location
like a laser tag place servicing a single area. That’s not enough to build a
critical mass of developers or players.

~~~
aphextron
This has been the dream since consumer VR took off 5 years ago. It never
materialized because it turns out people just don't care that much. The tech
is impressive, but it simply isn't good enough to be compelling beyond the
first 10 minutes of wow factor for most people. VR will remain a niche within
a niche until the hardware is truly ready for the mainstream, which will
require feather light fully wireless headsets with 100% FOV, depth perception,
and perfect controller-free hand/pose tracking.

~~~
ecshafer
I have seen vr arcades similar to this, but only in super high traffic tourist
areas. Orlando and Vegas both have places you can rent a vr booth. But I think
you really need some place you can charge a lot and have a huge amount of
potential customers constantly.

------
fencepost
It'll also be interesting to see the impact on housing. Lots of people
probably don't have the space to set up for working from home well,
particularly if you're talking about families with 2 people working plus kids
doing some amount of remote schooling.

Single? Viable. Young couple in a 1-bedroom apartment? Who's working at the
new desk in the bedroom and who's at the kitchen table? Add a couple kids in
and it just gets tougher.

Even if they weren't doing it before people are now going to be looking for an
extra office-suitable bedroom.

~~~
mmckelvy
If you no longer have to commute to an office, presumably you can swap that 1
bedroom apartment for a house located a bit further afield.

~~~
bobthepanda
that's assuming the only thing driving your desire for a 1 bedroom apartment
is the desire to be next to an office.

the current situation is weird in that COVID has disrupted nearly all non-home
spaces, not just the office. But once restaurants, theaters, museums,
nightlife etc. are back in business some will still desire to be near
activities they're doing all the time.

I'm personally interested in how this will really impact important working
"third places" like coffee shops, libraries, and WeWork style spaces once
people are allowed to go to those again.

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SpicyLemonZest
I think this is less of a seismic shift than a lot of people are reading,
since the building in question isn't expected to finish construction for
years. I think even the most pro-office people would admit that pre-pandemic
forecasts of office needs 3 years in the future are now unreliable.

~~~
ghaff
As a company, you don't need to be committing to 100% remote to take the very
prudent step of putting any real estate expansion plans on hold for which it
makes financial sense to do so. If nothing else, it's a fair bet you'll have
more negotiating leverage in 6 months or a year.

~~~
baskire
Exactly. Pinterest still is holding onto existing sf office space.

They are right that it probably doesn’t make sense to pay top dollar for this
spot when other spaces in east bay, South Bay and Seattle are cheaper with
access to same talent.

The Bay Area will still thrive but sf proper-city will have a rough time

------
eezurr
Many commercial properties and apartment complexes are owned by pension funds
and REITs. There is an incentive to keep increasing profits to gain customers,
payout the pension costs, etc.

What will happen if retirees lose this income? Or on the flip side, how will
cities be affected when its citizens' income is not siphoned away from the
city?

------
CommanderData
Speaking with two business partners (UK and Aus). Retail retail rental prices
have not seen a reduction due to Covid in large cities. Granted the businesses
here are in retail but I would imagine rental prices to drop.

My Aus partner mentions Westfield often and how arrogant their attitude has
been during the crisis. Especially when many stores in these flagship centres
are still closed and some even face bankruptcy.

------
cblconfederate
Bay area employees have a strong incentive to return to the office, since a
major shift in location of their companies will lead to a major shift in their
compensation, fast. It's likely that the rest of the world , cash starved,
will move faster to embrace remote. Inevitably it seems in the medium term
even bay area will be dragged along.

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kc-rush2049
I think that some of this WFH stuff is like Pandora's box. Employers are not
going to be able to stuff it all back in the box now that it is out. There
will still be offices, and people will still attend in person. I'm just not
sure if it will ever be "The Norm" again.

Take a generic local tech company for example. Its employees are now all WFH,
some enjoy it and few others don't, while some really need it for
precautionary health reasons. Does HR have enough legal room to tell everyone
that the health crisis is over and that they HAVE to return to an office "or
else", do they get to choose who needs and doesn't need WFH? I see litigations
surrounding personal safety and fairness down that road. We haven't even
gotten to the part of the pandemic where there is a vaccine available, but
anti-vaxxers are all over... I'm staying at home thanks... Even if the local
tech company has HR figure out how to pull this off, and moves to force those
workers back; the employees now have the option of other companies that WILL
offer the WFH that they want. And these companies can possibly draw from
state-wide or possibly even national talent pools. Those are the companies
that will attract and retain the top talent.

~~~
ergocoder
All superstars will leave if forced.

My friend who is a staff engineer. He lives close to the office.

Before covid, his kids meet with their parents often. They live close to each
other.

You can bet that he would not increase the risk of the grandparents getting
covid. Not even by 0.0001%. It's a known risk that can be avoided.

Forcing him to come back to the office will immediately result in him leaving.

Working life will never be the same again.

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thrwn_frthr_awy
I'm curious if newly remote employees are getting monthly stipends for
internet and electricity? Is that pretty normal or are those costs being
pushed on to the employee?

~~~
sulam
If your employer _requires_ you to WFH, say because their office is not open
due to COVID-19, California law requires you to be reimbursed for reasonable
expenses associated with WFH, including Internet access. Many employers
already had this kind of reimbursement in place, though.

~~~
thrwn_frthr_awy
Interesting. I was the only remote person (by choice) on a team before covid.
Now the whole team is remote because of closed offices in LA. Feels weird to
now start expensing these things only while the office is closed, but it
sounds legally I could?

~~~
sulam
Legally you absolutely could. It’s like anything else you expense in the
course of doing your job. In fact your HR/exec team is falling down on the job
if they haven’t announced new policies, since your office is closed.

------
adrianmonk
The big question that nobody can answer is whether this shift is permanent.

Part of the shift comes from the fact that we are in a temporary, exceptional
situation. However, views about remote work may have been changed through
first-hand experience.

People have been working in offices for literally thousands of years. It would
be an epic, once-in-a-millennium historical change if we moved away from that.

But that doesn't mean it's impossible. People have also been using paper for
the written word for literally thousands of years, and we've made a partial
but permanent shift away from that. Maybe remote work will follow a similar
pattern.

~~~
cblconfederate
people have been working in offices for a few decades. Before that they worked
in factories, before that they worked at home, either in the field, or in the
shop in front of their house (roman times).

Whether it's permanent or not depends on how much energy has been expended to
switch habits. Once people settle in a new routine, there are some benefits of
remote work that are simply irresistible and probably irreversible (such as
taking back control of time).

------
likeabbas
Hooray! The tennis club is spared (for now)

------
CaliforniaKarl
The article's actual title—Pinterest cancels huge SF office lease in unbuilt
project, citing work-from-home shift—was 6 characters too long.

~~~
dang
I've put the comma back in and sacrificed SF.

------
macspoofing
What shift? The pandemic?

