Re:The Open-Office Trap
by Spooky23 on Wednesday December 03, 2014 @08:45PM
(#8697474)
Rent is only the beginning of the costs. You need to build out the offices, which in a place like NYC means dealing with union BS and potentially carrying two rental costs if the market is tight. You're easily spending $100/sqft
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.
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.