Nokia Selling Its Headquarter

The news came to a shock to me.

There is no technology company in the world who has sold their HQ before they are out of business. So why would Nokia do it? The obvious reason would be they need cash.

Indeed the reason given was owning real estate was not their core business, but don't forget that every business needs an icon and a HQ is important. But that reason is acceptable. The problem is that the trouble ahead might be bigger. Firstly, as my mom always says, property prices would generally go up. They never go down unless under fluctuation or crisis. This is because in Economics (here we go again, school) scarcity drives price up, and as population and business grow, less space is available thus higher prices. This means Nokia would never be able to buy its HQ at the price they sold it. Secondly, the new owner of the HQ can really make big bucks. How? Just threaten Nokia that if they don't want to pay more, they need to get out. Unethical indeed, but that is the profit point of view. Would Nokia go out of their HQ? Most likely not, since every company must be proud of their HQ. Would they pay more? Most likely yes! What does that mean? They need to pay more whenever they need to renew the lease contract. This is true because as the property price goes up, the lease price would go up, too, because selling would be profitable thus if the lease price does not go up, it would be "unfair" to the property owner.

This is assuming the owner is really in the property business. Let's say the owner is a nice guy who just want to help Nokia. What if there are rival companies (you all should know) want to play the bad guys and offer a very high lease? If Nokia could not pay that much, they lose their HQ. If Nokia could pay that much, they just lose more money. Would Microsoft, Nokia's latest partner, help them pay? We would never know. So? I think the decision to sell the HQ is a desperate measure indeed which would only take place in times of danger, because it is quite irrational for the reasons above. Let's just hope Nokia stays in the game because they revolutionized mobile phone in the early mobile phone era, and we hope them to continue revolutionizing it.