What Dropbox’s $400 Million Real-Estate Loss Says about Office Rents in San Francisco’s Biggest Office Glut Ever

But working from anywhere has cost cutters drooling: “All expense categories benefited from lower facilities related costs, driven by our employees working from home.”

By Wolf Richter for WOLF STREET.

When Dropbox, the San Francisco cloud services provider, released its earnings Thursday evening, it added a delicate and very costly morsel on top of the commercial real estate gloom pervading the office sector in San Francisco and other cities.

After announcing in October that it would switch to permanent work-from-anywhere, and after announcing in its Q3 earnings release in November that it would therefore not need all of its office space and would therefore book heavy charges associated with it, and after announcing in January that it would therefore cut 11% of its workforce, Dropbox announced yesterday evening in its Q4 earnings release that it would therefore try to sublease the unneeded office space to some other company, and that it had therefore booked a $400 million charge “related to real estate assets.”

This is the cascading nature of the permanent switch from working in an office to working from anywhere. During the earnings call, CFO Tim Regan said, “as part of moving to a Virtual First work model, we are taking steps to de-cost our real estate portfolio by subleasing our existing facilities.”

“De-cost our real estate portfolio” – that is the key here. Paying rent for years to come on vast amounts of very expensive corporate palaces that have mostly been vacant from get-go, especially in hyper-expensive San Francisco, and that are no longer needed at all, is a big unproductive expense.

So the cost cutters are at work. But it’s hard to cut the expense of a long-term commercial lease. You have to put the space on the sublease market and hope for the best.

Dropbox is just the tenant in this office space. Its real estate losses are that of a tenant with too much space, and are a result of office rents having plunged since it signed the lease.

The $400 million loss is the estimated difference over the remaining term of the lease between the rent it thinks it can obtain from a future sublease tenant in this unneeded office space and the rent Dropbox is paying to its landlord on the space plus other expenses associated with that space.

This estimate indicates by how much office rents are thought to have plunged from the time Dropbox leased the property.

Dropbox, like just about all tech companies and many other companies in San Francisco, went on an office leasing binge in past years, leasing far more office space than they needed at the time. The logic was that there was a permanent shortage of office space in San Francisco, that rents would always go up, and that it was better to grab all you could get now, and sit on it vacant, and hope to grow into it over the years, thereby warehousing office space for later use. This hogging of massive amounts of unneeded office space caused the office shortage.

And now, as these unused offices are being dumped on the sublease market, San Francisco suddenly has the biggest office glut in history.

So which office? Last November, Dropbox put about 472,000 square feet of its new 750,000-square-foot headquarters building in San Francisco on the sublease market. Even though Dropbox didn’t mention what cities these office properties are in, it is likely that the sublease of its San Francisco headquarters accounts for a large portion the $400 million charge.

Regan said that the company expects a smaller portion of charges, in addition to the $400 million, to hit earnings in 2021, including potential charges for its offices in Europe, “depending on the then current market and economic conditions.”

In its earnings release, Dropbox said: “As part of the Virtual First strategy, we will retain a portion of our office space to be used for team collaboration and a portion will be marketed for sublease,”

“We reassessed our real estate asset groups and estimated the fair value of the office space to be subleased using current market conditions,” it said.

“Where the carrying value of the individual asset groups exceeded their fair value, an impairment charge was recognized for the difference,” it said.

“As a result, we recorded total impairment charges of $398.2 million in the fourth quarter of 2020 for right-of-use and other lease related assets,” it said.

But the cost cutting is already bearing fruit, said Regan: “I’d like to note that all expense categories benefited from lower facilities related costs, driven by our employees working from home.”

So it appears, working from anywhere is cheaper for the company than maintaining office palaces – including Dropbox’s gorgeous and free gourmet cafeteria, the Tuck Shop, which in 2018 was enshrined in an ooh-and-ahh CNBC video, and which is now closed. That was a quarterly expense that is now off the income statement. An employee perk now gone. Now work-from-anywhere employees get to raid their own gourmet fridge and pay for their own gourmet lunch.

As Dropbox shows, working from anywhere has successfully shifted expenses from the corporate income statement to the household. At the same time, employees don’t have to spend money and time on the commute, except when they periodically go to the new meeting places for “team collaboration” that are replacing the sea of desks. Some hate it, some love it. But for corporate cost cutters, the logic is irresistible.

Meanwhile, corporate cost cutters have to figure out how to present to investors the costs of all that vacant office space, much of which had been vacant even before work from anywhere took off. Big charges to book the expense right up front is what Dropbox has chosen, rather than a quarterly bleeding for years to come.

This is just so relentless: “We’re not going back to the way things were.” Read…  Salesforce, San Francisco’s Largest Employer, Switches to Hybrid “Work from Anywhere,” Won’t Need All that Space in Salesforce Tower. Uber, Old Navy, Yelp, Oracle, Dropbox… Dump Office Space

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  114 comments for “What Dropbox’s $400 Million Real-Estate Loss Says about Office Rents in San Francisco’s Biggest Office Glut Ever

  1. matt says:

    “De-cost our real estate portfolio”. That’s a new way of saying it. I guess the next they’ll “de-cost our labor overhead” by hiring Bangaloreans instead.

    • Nacho Libre says:

      I guess the standard response is “learn to code”. Oh, wait.

      • roddy6667 says:

        कोड करना सीखें।

        Fixed it for ya.

        “Learn to code” in Hindi.

        • Nacho Libre says:

          Big tech companies are the richest special interest group of the party in power now.

          Given how much cost would be saved by shifting jobs offshore, these ‘drooling cost cutters’ will do exactly that.

          Interestingly, most tech minions support the same party. So, in that sense they have voted to outsource their own jobs.

        • Joe Saba says:

          of course NONE of these tech companies make $$profit
          spending OPM is way to get rich – just ask elon
          no VIABLE product needed, just car salesman pitch they fall for

    • K says:

      My intuition tells me that this is a pandemic-fueled trend that will reverse itself the instant that the pandemic is behind us, unless some new virus is released to prolong the pain. There will be opportunities to eventually get real estate for a song when the business collapses start to fall like dominos, since the government aid proposed is not enough.

      After the pandemic, that real estate will regain a large portion of its value, when people return to work in offices, since working from home for every job is impractical.

      • Boatwright says:

        It’s delusional to think we will return to an imagined normalcy. IMO most of the big office towers, trendy furniture arrangements, and employee climbing walls, etc. are nothing more than stock market hyping. When all of these phony “businesses” go the way of past follies it’s going to be weeds growing through the cracks and the swing of the wrecking ball; the real value in those towers being so much scrap steel.

        Suggested reading: Bullshit Jobs: A Theory, 2018, by anthropologist David Graeber. He writes about meaningless jobs and looks at their societal harm. He argues that at least half of societal work is pointless theater.

        • K says:

          That is an excellent point. Companies that survive will realize that they were often overstaffed and that means many, many jobs will never return. Automation will replace many jobs sooner than expected.

          Nonetheless, assuming remote work is definitely the future for all ignores basic human nature. People often hate working by themselves. A lot of office buildings will eventually return to somewhat reduced capacity.

        • K says:

          One last, clarification, many, many, many over leveraged companies will soon end. Their office space may remain empty.

      • Mira says:

        Do you think so … ??
        Isn’t real estate .. the best investment .. bricks & mortar .. tangible stuff.
        Buy a house & you can’t lose .. you’re set .. a real asset to utilise as a founding stone to wealth .. the 1st of many & your laughing all the way.
        So what happened here ??
        A pandemic shut down business .. when will the need for shut down be over ?? .. who knows .. it could be the beginning of a never ending soapy story .. chapter after chapter of crisis episodes leading to shut over & over again.
        If everyone is moving their business abroad .. the pickup will be over there & not where we are.
        We are left wallowing in the pit of despair .. still.

  2. Absur Ditty says:

    The federal govt should just buy all the unused office space at cost so the companies don’t have to suffer any loss and then convert it to free housing and move millions of families into it from the USA and also move in millions of immigrants from over the world. I think a lot of people would love to live in San Francisco.

    • Annette says:

      San Francisco for its size, already does that. It hosts more of the nation’s homeless, as well as those from Latin America, attracted by bizarre laws, generous money and weather. The high rise tower slums around Paris are a peek into the future of San Francisco.

      Couldn’t happen to a nicer political regime!

      Sure glad we got out when we did, selling a three unit building that our grandfather paid $36,000 for a nice clean 100X multiple. Took 20% of that and bought a nice little family compound in Gerstle Park near a newly remodeled school the grandkids can walk to.

    • Cas127 says:

      So, Absur, how many years did you work in gvt planning?

      • Wolf Richter says:

        Cas127,

        Please read Absur’s alias quickly and in total, with stress on the u: “Absur Ditty”

        This will tell you that the comment was sarc

    • Swamp Creature says:

      Yep, The Fed should buy the unused office space and convert it into housing and move all the prisoners from the local prisons into it. Then they can save money by closing some of the prisons. I’m going to recommend this to De Blasio. NYC has the same problem as San Francisco. If they don’t have enough local prisoners then they can go out of state and bring them in from there.

      • Seen it all before, Bob says:

        Wasn’t that a movie with Kurt Russell? Escape from New York.

        • Swamp Creature says:

          Yep, saw the movie when it came out. Excellent movie. They need a second iteration of the movie. Kurt Russel could be the star of the movie again. It would be a blockbuster hit. De Blasio and Cumo can audition for the role as President of the United States. They could film it under the Eades bridge in St Louis where the first one was filmed.

        • lenert says:

          The sequel is “Escape from L.A.”

        • Joe Saba says:

          only one SNAKE PLISKIN

      • Ted says:

        Swamp:
        Send it to Cuomo, he makes all the big decisions in NY.

    • Brian pawlak says:

      Excellent! Then the Government can bail out people who can’t make their house payments too.

    • JC says:

      how about hydroponics towers, the new green revolution…

      • 728huey says:

        Don’t laugh. That actually would make sense for a lot of smaller dying former industrial factory towns with lots of vacant factory buildings. A lot of fruits and vegetables could be grown in these spaces with much less water than regular farming practices.

    • Mira says:

      With who’s money ??
      It will be with Hard Earned Tax Payer Dollars & not any of that funny money in such abundance that’s for sure.
      I’m thinking about Australian practice here .. we the people / the common man always get stuck with the bill .. trust me.

      • Mira says:

        Besides .. it has just come to my attention that the Fitzroy commission flats .. Napier St – Gertrude St – Fitzroy Vic: etc are at least 50% empty
        .. google & have a look at how large an area it is on prime / billion dollar real state .. therefore I wonder exactly how much of the surrounding area is occupied .. if the poor don’t want to live there.
        Over supply ?/ & therefore what a waste .. who’s doing the town planning & to what aims.
        & I might add that some of that prime real estate is car parking space .. multi story building housing cars .. expensive parking that is most likely tax deductible.

  3. CreditGB says:

    Analysts seem to focus on one main “popular” cause at a time. A large wound has appeared on the body so they myopically probe and tear at the new wound as if it were the only wound on this body.

    Could it be that the decades long decline in life quality, safety, and heavy tax burden, along with the release of thousands from a required office appearance, have all come together to form a perfect storm of exodus?

    Death by a thousand cuts.

  4. Seneca's cliff says:

    If I didn’t know better I would think it was kind of evil scheme by some dark overlord to herd many of the residents of SFO to Texas, then trap them in a state wide favela of no electricity, no heat and maximum chaos. Then San Fran can return to its former glory as a great city by the sea with fair rents, great views and cutting edge culture

    • Thomas Roberts says:

      Nope, the real plan is to lower employee wages to low cost of living in America standards (some will have to move and others will be laid off and replaced with new more rural located employees) and then to make them subcontracters and then make many positions gig workers and outsourced.

      If the plan is to have no real central location, there new mailing address will likely be in las Vegas and will share the address of hundreds of other major headquarters, all stuffed in a small building. I could imagine major companies having a much smaller headquarters (not their legal headquarters though) they might lease it, but, I’d expect major companies to own their own new much smaller headquarters. It would probably look even fancier, but, have less perks.

      A company like Dropbox though, could be very easily replaced by someone else though, not having a central location, also means that they have no special culture and little special to offer to employees. For an app company, this is a risky move.

      If someone wants to return San Fran (and California in general) to former glory, they will have to do something about imigration, the issue is very simple, America designs it’s cities in a way that takes up alot of land and resources and as the population density increases, it will eventually spiral the cost of living, out of control. This leads to many many problems, because of population density.

      • Pablo says:

        “I could imagine major companies having a much smaller headquarters (not their legal headquarters though)”
        Biden’s Delaware will be the legal headquarters for tax and regulatory avoidance. (America’s Cayman Islands.)

        The New Grenfel Economy, straight ahead.

  5. Stephen C. says:

    I need a new desk for my home office. Does anyone know where all these unused desks, sitting in downtown San Francisco, are going to be sold? I can’t imagine a Craigslist posting will get the job done.

    • KGC says:

      I don’t know about S.F. but in Seattle you can’t hardly give away office furniture. Desks, chairs, partitions, as well as appliances, beds & mattresses, etc are offered daily for free on CL or offerup. Covid has stopped the major trash haulers from taking large items for over a year now. “Free” is often the only way people can clear offices and apartments when the lease is up.

      The used furniture market is a massive sucking sound, and places like Goodwill and the auction houses are turning away stuff.

      • Annette says:

        Used restaurant equipment too! We got commercial grade glass front refrigerators for our garage, five cents on the dollar. Illumination at night, great savings on being able to buy multiple items on sale, and my husband placed a pipe behind them to use the waste heat to prewarm water on the way to the water heater.
        Transportation is the biggest problem and cost with things like this. You would have to be crazy these days to buy any new appliances, mixers, furniture, shelves, pots, pans, stoves whatever.

        • b says:

          Totally agree!Sounds like a sweet setup!! :-) Anyone with extra decent office furniture/restaurant items should contact local domestic abuse charities,homeless shelters,or lical govt.,someone could use the stuff.

      • Depth Charge says:

        If something is listed “free,” it doesn’t generate nearly the interest that it would with a price. People figure it’s garbage. Now, put it out on the road with a sign “$50” and watch it get stolen immediately. That’s the best way to get rid of “free” stuff.

        • RightNYer says:

          Haha, yup. I had an old laptop I didn’t want anymore, but could still work for someone for basic web browsing. I knew if I listed it on Craigslist for “free” I’d get all sorts of people wasting my time, so I listed it for $10.

          Some kid who needed it showed up. I told him I didn’t want his money, I just put a price to eliminate the BS.

          Amazing how human psychology works.

      • SpencerG says:

        I just had several hundred chairs and desks to get rid of. Couldn’t even get $5 a pair at a flea market for kids desks at home. But the scrapyard gave me $8 per hundred lbs.

        To the scrapyard it all went!

    • Swamp Creature says:

      The hell with selling them. Just open the doors and let the looters come in and clean them out and file a theft claim with their insurance company. That’s what they did where I worked at the Naval Observatory next to the VP’s residence. Its quick and easy.

      • Swamp Creature says:

        Do the same thing they do here in the Swamp when they evict someone fro no-payment of rent. Instead of putting the persons personal effects in storage and letting them come an get it later, they usually put it right out on the sidewalks for the looters and thieves to help themself. It usually goes quickly,

      • Thomas Roberts says:

        Swamp Creature,

        That would mean paying a deductible though.

    • AlamedaRenter says:

      Over in all those furniture warehouses by the Hayward airport. My wife’s office in SF closed down, so over the summer we down there and got a used sit/stand desk for the extra room…now office.

  6. lisa2020 says:

    I love that “work from anywhere” reference. Such a sense of humor!!

    I just finished reading the FED RSRV:https://www.federalreserve.gov/monetarypolicy/files/20210219_mprfullreport.pdf
    RE: Page 6- Although the FED is probably restricted from reporting any conclusion from that immediate drop in Employment to Population Ratio, the Labor Force Participation is really a lot more than just a 2 percentage point drop. The FED chart really indicates an 8-percent drop. This brings total employment down to under 58% of the US population. I expect that “leading indicator” to be NOT very pretty in the near and long term for any work any where scenarios!

    • lisa2020 says:

      from page 9 of the. FED RSRV report that came out today:
      “However, new business applications started to rebound notably during the summer, and for the year as a whole, they were higher than the average over the previous three years, a pattern that differs dramatically from previous business cycles.5 The increase in applications appears to be concentrated in industries that rapidly adapted to the landscape of the pandemic, such as online retail, personal services, information technology, and delivery. It remains unclear, however, whether these business applications will lead to actual job creation at the same rate as in the past.6 ”

      Remains to be seen just how those new business applications really do anything at all to change any of the real job picture that pays anything for more than an interval of a 3 months or so part-time duration.

  7. 2banana says:

    So…since home is now your official office and there is no office for you at the office…that would be an expensed business trip.

    Mileage, tolls, lunch, etc.

    If the meeting runs late, maybe even a hotel room.

    Plus OT, depending on your compensation arrangement.

    “As Dropbox shows, working from anywhere has successfully shifted expenses from the corporate income statement to the household. At the same time, employees don’t have to spend money and time on the commute, except when they periodically go to the new meeting places for “team collaboration” that are replacing the sea of desks.”

    • Wolf Richter says:

      Taxes are going to be interesting with WFH, including the home office deduction.

      • Swamp Creature says:

        Home office deduction isn’t worth a s#it. I use about 20% for business and never take the deduction. If you do, your tax return is flagged for an audit automatically. Also, when you sell your house the depreciation is added to your tax bill for the year you sell as ordinary income.

        • AlamedaRenter says:

          My cpa has been using the home office deduction for my side 1099 work for about 6 years now. Never had an audit or heard a single peep from the IRS. Nothing.

        • Up & coming SSA recipient says:

          I just take the safe harbor deduction.

          I don’t have many expenses to make it worth my time to deduct it off the 1040. The expanded Standard Deduction is more than my itemized deductions even if Biden restores the SALT deduction soon. Safe harbor does help with my CA taxes. No depreciation deduction but then I don’t have to deal with it when I sell my house.

          Wonder what this will do to the CA state budget now that we’re all mini commercial sites?

        • Swamp Creature says:

          I stand by my previous statements. Most of the advise from these so called expert accountants is just total BS. It is done to justify their own fees. I never use them never paid them a dime, and have been doing my own taxes for many, many, years (Schedule C) and never been audited.

      • taxgirl says:

        home office deduction is no longer allowed if you are an employee [paid on a W-2], only if you are self-employed and file a Schedule C. been that way for several years now

        • Up & coming SSA recipient says:

          Not true if you’re a remote worker who works full time at home for you employer’s convenience. Been taking the Safe Harbor for years now.

        • Island Teal says:

          You just need a sharp CPA and you set up multiple side businesses,all on schedule C and LLC’s as appropriate. Anyone can do that in addition to being a W2 employee. Have done it for decades 🤠🤠

        • Wondering How says:

          Island Teal, what does your CPA show as Revenue/Income for these multiple S-corps and LLCs? Also, in CA, each S-Corp will cost around $1000 to maintain.

      • VintageVNvet says:

        Don’t know about any state rules, but we used the home office standard deduction on our Schedule C from ’81 to ’19 and never had any problem with IRS.
        We did not ever take some of the out of town expenses allowed (for food or entertaining clients) , kinda as a ”sand bagging” effort in case of ever being audited, so perhaps IRS personnel looking at the over all profit every year on which we paid SS, Medicare, and Income tax was one reason.
        Have had 3 ”discussions” with the IRS during that time,, twice told to go away, once sent a check when they accepted what we did.
        Always found the individuals at that agency to be fair.

    • Thomas Roberts says:

      2banana,

      I’d say that the way I handle my taxes, personal finance and business deductions is making art.

      Most of the work from home employees and especially new employees for major work from home companies, will probably become independent contractors, especially as they spread around the country. These “new companies” will either master the craft of business expenses or be the loosers.

  8. lisa2020 says:

    That link about the small landlord squeeze-play is where the real battle will play out across the US. There won’t be any justice in any court cases. There is no justice through the courts, just depends who gets to walk away with whatever gets taken.

    Who really cares about Dropbox and their un-needed office space when it gets down to the real on-the-street evictions, and who winds up buying out the small landlords that are really gonna get the real squeeze “experience” daily?

  9. Michael Gorback says:

    Am I the only one who sees the irony of a cloud-based business having so much physical office space?

    Someone please introduce their right hand to their left hand.

  10. gorbachev says:

    This is all fine and dandy until a Gorilla forces every one back
    into offices and makes a fortune by whipping these lazy asses
    back into shape. Then the I can do that herd takes over and
    we’re back where we started.

    • TimTim says:

      Couldn’t agree more.

      Like with so many things, it’s just about watching the pendulum swing.

  11. RightNYer says:

    Hopefully Powell will print that $400 million and give it to DropBox. Their shareholders need to be made whole.

  12. MCH says:

    At some point, the office space in SF and all these markets are going to crash down. And it will be a windfall for someone who buys up that land.

    • Candyman says:

      The windfall becomes the city’s shortfall in taxes. As real estate taxes fall, what services and social programs get cut? Especially in s.f., this will not end well.

      • Cas127 says:

        “what services and social programs get cut”

        School renaming staffers?

        • polistra says:

          Best comment of the year!

        • Stephen C. says:

          I’d love to know what these school re-naming committee members make, and if they get benies. It must be hard work, when you think about it, trying to find a name that won’t be offend, or be controversial 17 generations from now.

          Maybe like NYC, just give them numbers. PS 145 or whatever.

        • Tony22 says:

          “what services and social programs get cut”??

          SF Supes Approve $14 Billion Budget That Includes Funds For COVID-19, Homeless, City Workers, Afr. Am. Community
          September 22, 2020

          “In addition to the $120 million investment in the African American community, other investments in the budget include $60 million for Mental Health SF; $14.7 million for the city’s continued COVID-19 response; $17.3 million for housing subsidies for seniors and homeless families; $10.7 million to expand the Right to Counsel program; $5.3 million for the new Community Learning Hubs intended to help some 6,000 students with distance learning; and $2 million for food security initiatives for families impacted by COVID-19, according to Fewer’s office.”

          None of these have to do with maintaining streets, nor schools or public safety.

    • Ethan in NoVA says:

      Then the buildings will sit empty forever.

      If commercial real estate did crash and people could rent it cheap think of all the cool things that would be born. But at last, it won’t happen. Buildings that have been empty for years will remain empty for years.

      • Anthony A. says:

        Go have a look at the outskirts of downtown Detroit as that’s the end result.

    • KGC says:

      I’ve been saying that about the empty houses in Spain for almost20 years now with no luck.

      They can’t sell cheap, the banks won’t let them. The banks are propped up by these ridiculous real estate valuations and if those get exposed as to their real value the banks will fail. And the banks aren’t allowed to fail, because that would kick the props out from under the gov’ts and the IMF.

      • MCH says:

        What you guys have said about letting the buildings sit empty is true. But sooner or later, those assets will change hands at steep discounts. The only question is what organization. Will acquire those assets.

        The buildings themselves are nothing but recyclable materials, the land might be more valuable. Although that will depend on the cities themselves. SF might be more challenging in some ways because of its geographical situation.

  13. Old School says:

    Isn’t the plan to just lower rates by putting everything on the government balance sheet at a negative real rate. Mortgages, student loans, airlines, state budgets. Draghi already showed you can pin sovereign debt to zero for a bankrupt country as long as there is some wealth somewhere in Europe. Slowly run through the real savings of the oldsters to fund it all. It’s the government’s money, til people stop using it.

    • Rcohn says:

      Negative interest rates can be attractive to buyers only if the amount of deflation exceeds the negative interest. For example if deflation is -2% and the negative interest rate is -1%, a buyer benefits .
      There was a fear that US would encounter deflation ; that is no longer the case and rational fears of higher inflation are starting to dominate the bond market.
      By the end of this year ,the debt/ gdp of the US will be at 140% and will be approaching Italy’s 154% . Without the backing of Germany and some of the other stronger EU countries , Italy would be paying much , much higher interest rates.
      The US does not have a Germany to mitigate its irresponsible fiscal policies ; the recent bond market moves are telling us that the bull market in bonds is over and much higher interest rates are coming

      • Stephen C. says:

        We, the people of the US of A, need a Germany. Is it time to invade Canada yet? Shoulda got that job done in 1812, no?

        • w says:

          Ha,Ive been half jokingly saying we should invade Canada just a bit for years,Seriously,we want Toronto! :-)

      • WES says:

        The US doesn’t need Germany. It has New York, Illinois, and California!

  14. David Hall says:

    Banks and life insurance companies own over half of commercial real estate mortgages. In the late 1980’s so many S&L Thrifts were failing due to a collapse in commercial real estate prices, the Resolution Trust Corporation was formed to take over their assets and auction them off.

    In 2008 and 2009 many banks failed due to real estate loan losses. The government took over their assets and merged them with bigger banks. Shareholders of bankrupt banks lost their investments.

    Citibank shares were worth over $500 in 2007. They are worth little more than $65 today.

  15. Twinkytwonk says:

    Does anyone actually use Dropbox. All the places I’ve worked lately ( UK universities) prohibit storage of research data on Dropbox .

    • AlamedaRenter says:

      That was my thought reading this…personally I used GoogleDrive which is easy to use.

      At work when I installed the Dropbox app on my work phone to get pictures a contractor took…IT called me the next day telling me they saw it was installed and to immediately remove it.

    • Wolf Richter says:

      They had $500 million in revenues in Q4. Someone is using them.

      • Anthony A. says:

        I use the free version with 2 GB storage for stuff I want to keep handy that I can access from any computer. But nothing in there is important. It’s mostly pictures, pdfs, etc.

    • Laurence Hunt says:

      Dropbox is excellent. I’ve used it for years. I can buy a new computer anywhere and be up and running automatically in hours, with no work on my part.

  16. Tom S. says:

    First paragraph really made me chuckle! It reads with the legalese of an emergency executive order.

    Will there be any societal cost to ever increasing isolationism? I have to think that some aspects of mental and physical health would decline tremendously in a permanent wfh environment. Less face to face interaction has to come at a cost, right?

    I participated in a brief psych study at school where we ate some chips and salsa before a surprise negotiation task. The other group didn’t get any chips. The study showed that people who shared food before a negotiation task were far more willing to compromise. Maybe they need more free food in the capitol building.

    • MonkeyBusiness says:

      Yeah, like those 100K a plate fundraisings. The people participating are certainly willing to compromise on our wealth and health!!!

      • Tom S. says:

        After the steak and wine put a crying child at the end of a slide show and listen for the soft rustle of all those wallets opening up. Funding secured!

      • b says:

        Funny what photos of illegal,compromising interactions can do to control elected officials!!

    • No1 says:

      Mine does during our Melbourne lockdowns. But as long as someone important benefits, I doubt anyone cares. It will attract the same hollow handwringing as the rise of wealth inequality or high real estate prices.

  17. OutWest says:

    12% of Americans have had their first jab and new cases are down 44% over the past 14 days.

    The thought of going back to an office setting turns my stomach. How many people having now developed a new skill set that includes working remotely will refuse to go back to an office setting if asked? I would perhaps for one day a week max. The smartest people in tech have more options going forward.

    • lenert says:

      No kids at home, huh?

      • OutWest says:

        I’m too risk averse for kids. After the GFC, I cut living expenses by two thirds assuming that another crash was on the…been wrong for the past 5 yrs.

        • Mr. House says:

          No it happened, you just didn’t notice. What was the cares act? Was that a bigger bailout then 2008? You might have been preoccupied with something else at that time. Some day this war is gonna end, you can’t print forever and they’ve been printing for about 12 years straight now.

  18. otishertz says:

    “De-cost our real estate portfolio”

    That’s a brand new verb there folks!

    It means, “we screwed up.”

  19. roddy6667 says:

    I have noticed over the years that businesses like to invest in real estate, even though it is outside their area of expertise. Bankers and other financial services end up in the commercial real estate speculating and landlording business decade after decade. Software companies are also guilty. They tend to plunge into the market just before the peak and it drags their primary business into a lake of red ink.

  20. Seneca's cliff says:

    Nothing lasts forever. Once the Coliseum in Rome hosted huge crowds and was the center of the known universe. A few years later sheep and goats grazed there. Perhaps the skyscrapers of the big cities are just another passing phase and are quickly becoming obsolete. In a few years they may be nothing more than roosts for pigeons and crows. But the Sanf Francisco will go on. Fishing boats will leave from the wharf, scrap metal will be traded at the docks and in the low rise buildings of China Town gold and silver will be bought and sold.

    • Marko says:

      Tens of thousands more people, by some estimates as many as 100,000, are living in hundreds of abandoned buildings across downtown Johannesburg. Could be a harbinger of the future for many cbds.

  21. edmondo says:

    One of the big dividing lines as to whether or not the IRS considers you a gig worker or an employee is “does the employer provides a working space?” If so, the people are considered employees and the employer is responsible for half the social security contribution as well as other “employee costs”.

    This WFH may be causing a real upheaval in the employee-employee relationship.

  22. Stephen C. says:

    Passing from desks and other office furniture to gym equipment . . .

    For the last 11 months I’ve walked by 24 hour fitness here on Larkspur Landing (just across the bay from San Francisco.) The facility has a large footprint and before the pandemic it was nearly always packed. Peering through the windows these 11 months, all that equipment looked so lonely and in need of loving adoption. I foolishly thought one day I’d see a big sale sign on the street corner and a line down the block. Nothing, until just the other day, boom! I see a totally empty space. I wonder if used equipment stores got some financing to swoop in and take it all. Or maybe 24 Hour Fitness is storing it, and will come back when the landlord finally capitulates on the rent.

    I think anyone paying 500K and up for a home should have a built in gym room. Maybe someday that will be as expected as a 3-car garage.

    Fortunately, before the pandemic, I had bought enough equipment and had tricked out a bedroom for my wife and myself. I for one had already made the decision to never set foot in a public gym again. The gyms up here had been pretty popular with Boomers, so I wonder if we’ll see less of them.

    • SpencerG says:

      About twelve years ago or so I started buying up used Nautilus machines from gyms that were “upgrading” their equipment. I airquote the word because those Nautilus machines were built like tanks and the newer machines from the newer brands… not so much.

      I only paid $50 to $100 for each of them because there is no market for used gym machines. My garage is now the best gym in town… if not the entire state. Sadly it is only 1100 sq feet or I would have a couple more in there. If I get rid of my washer and dryer then maybe I can get them anyway!

      • w says:

        Love Nautilus,used to use it and other healthclub equipment.Maybe sidegig as cash only workoutspace for locals?! :-)

  23. Thomas Wolfe says:

    “After announcing in October that it would switch to permanent work-from-anywhere”

    ‘Anywhere’ includes Bangalore and Beijing…and Zoom pink slips for US remote workers.

    • Great Point says:

      My thoughts exactly; this might actually stop the H1-B visa scam.

    • Sierra7 says:

      Thomas Wolfe (and others)
      Best comment on this article!
      You can bet your life and your family’s that American labor (jobs) is going thru a world revolution. Brought on by the advent of globalization that has only one objective:
      “Level American (manufacturing etc) labor to a world level playing field” so that global corporations can continue to plunder the globe.
      Historical periods sometimes take many decades and even generations to play out. This is one of them.
      The larger questions is how do we cope with the changes?
      Empty promises by leading politicians to “….bring back those good paying manufacturing jobs” is just pure bunk.
      They’re gone. Period.
      The “De-Industrialization” period is here for the US.

      • Elke says:

        Complicated subject. Here’s how we protest non American workers in our environment:

        Stay in a motel and the maids can’t speak a word of English, or worse, pretend to, and screw everything up? Leave a cash tip for them in Mexican pesos. Use online review sites to comment on their employment practices.

        Use your imagination to perform other such acts of rebellion, to and including identifying what the employment practices of a local small business are before you spend your money there.

  24. Mira says:

    “Dropbox, like just about all other tech companies …. went on a binge …. grab all you can & sit on it vacant.”

    In times of feast anything goes .. 😁
    The famine time are long gone & forgotten .. old fashion.
    It’s like having a baby .. ouch ouch .. never again !!

  25. Mira says:

    With all this working at home shift .. how many persons have actually lost their jobs & how many have been moved to lesser hours / part time work.
    Is it also a clever juggling of employment hours ??
    Maybe not to alarm anyone .. why I don’t know .. just a thought.

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