There is a certain amount of posturing in discussions.
Formalized respect and professionalism (with visual cues you are willing, and have the capability, to do what is necessary) go a long way, even when you strongly disagree with the other side.
For another leader accustomed to extravagant offices, to see us not willing to spend money on our offices... it sends the message that we are running out of cash, or fading into history, and that we might not be able to back up our position for long. (They already worry about that with our 4 year policy cycles.) It communicates weakness. Or, maybe they wonder if they are being slighted by being shown secondary facilities, and walked out the back door instead of the front.
You'd be surprised how much superficial things like this have an effect.