The answer to the expense of office space varies widely based on arrangements and location. Outside of the coasts, there are definitely areas where commercial space that startups use is cheaper per sq ft than residential. A couple of years ago, I was talking with a VC from New York about his (non-fancy) Manhattan office space being $80+ per sq ft while there were good spaces in my city for $1 per sq ft without tenants.

Well it does, but when most of your org wants / needs to work in person, you need to pay that. The cost of an office is probably less than the value added by the employees who would leave if you went remote-only, at least in many firms.