Actually building these things is non trivial. It's not just walls, it's air con vents, electrics, etc. I also think you may be underestimating the extra space required to make an office not feel like a closet.
Then there is natural light. In a big open plan space light travels to the entire space. With offices you either need to build on the edge of the building and have a window, or make at least one wall out of glass (expensive). Even doing that you still can't just take a big room and turn it into partitioned offices.
The capital outlay for a company to fit out a space with individual offices is actually really high and it all comes in one big hit. I'm sure if it was a matter of just paying 5k per employee extra per year the story would be different, but that isn't really a reality.
Amazingly this is also an argument from working from home. I've been at two companies during a WFH transition and they act surprised at the increase in productivity. Often times it's this very reason, less babbling and nerf-gun fights and more actual work.
Of course this doesn't cover those who "work from home" by watching Netflix and jiggling the mouse on their laptop every ten minutes or so. I'm talking about the more responsible people.
It's probably still more productive because now they are not distracting anyone.
And yet not only are employers embracing it but extending the model with hoteling and virtual desktops. A good friend of mine at Shell checks into his locker every morning and then goes and finds a random desk to work from for the day. I'll give you 10:1 the guy whose idea that was isn't sitting at a cube.
You also run into tax and other accounting issues by making permanent improvements to the office vs. buying modular cubes and such. Portable equipment gets deducted over a few years... permanent improvements get depreciated over long periods of time (30+ years!)... So you get to pay taxes on profits that you didn't make.
Most companies don't have the cash flow to pay a 30% premium in a high tax state on expensive construction, so cubes are a no brainer.
I work from home 75% now. When I'm in the office, I get next to nothing done.
I still don't think that sort of generalization is fair, though. I think a normal, sane office could be open, but without the ongoings that seem to be present in the environments you and the parent witnessed. Well, I can definitely vouch for that being the case in the office I work in.
They said they had trouble finding senior people. If I had been more aggressive I would have told them "have you considered having an adults table?"
At one SF shared workspace area, this guy always brought his dog in. Damn thing would go sniffing around and most people thought it was cute. I found it very annoying, especially when I had food. While I could tell him to piss off and keep his dog away, then I'd come off as the dick.
[1] http://www.mnn.com/family/pets/photos/10-companies-that-let-... [2] http://www.quora.com/What-San-Francisco-startups-allow-emplo...
Of course it doesn't. Most of them have no choice.
I think you're off by quite a bit with your price-per-square-foot estimates: http://therealdeal.com/blog/2013/10/01/manhattan-leasing-str...
That is from last year and the average price in Manhattan was about $60/sf.
$60/sf/yr works out to $5/sf/month, not far from your parent poster's assertion.
Commercial real estate is about $3/SF (per month) in San Francisco (Class A) and $4/SF in Manhattan. Open plan offices save about 75-100 SF per employee (more, if you're looking to be sadistic and impractical, but at this point, the productivity loss is obvious.) So the employer is saving, at absolute most, $5000 per employee per year. It's not worth it.
I bring this up because I just really truly don't get the occasional open office boosterism here. My current theory is that most of it comes from people who are still in the honeymoon phase of their career (like, the first few years after college when everything about the workplace still has some novelty to it).
That's basically what it is. The open-plan layout is reminiscent of college and the all-nighters in the computer lab. But work is not college. A bad grade on an assignment is much more fixable than getting fired. The stakes are higher, and that's why a certain brand of professionalism (or, more bluntly, divorcing oneself from behaviors that are acceptable for 18- to 21-year-olds) is necessary.
I say this because it seems like many/most of the people I talk to in person who like the open office idea have either literally never had a private office, or are relatively fresh out of college and get a job at Google (or a startup, or wherever), and they're still so excited about everything that even the things that are hassles (like open office plans?) seem like they're brimming with novelty.
Well, private offices make nerf-gun battles harder. And you hear less juicy gossip. And you don't have an audience for self-important rants about Lena Dunham. It might get so "boring" (in the sense of a lack of distractions) that you might be tempted to actually work to pass the time.