Office real estate crash will be so sharp, values unlikely to recover by 2040
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Re: Office real estate crash will be so sharp, values unlikely to recover by 2040
#2On track to follow Mall real estate.
Probably why the push for RTO is so strong in some business areas.
Re: Office real estate crash will be so sharp, values unlikely to recover by 2040
#3Re: Office real estate crash will be so sharp, values unlikely to recover by 2040
#4This is why changing zoning laws is so important. These buildings and their underlying values can be saved by 'going condo' or conversion to smaller unit spaces for the purpose of housing so many who are struggling with massive increases to rent. Most rent does not increase because of increased asset expenses, it increases because of increased owner expenses and that quickly becomes a slippery slope in the face of advancing inflation and housing prices.
Rent is becoming a social tool for class stratification and it began in classically liberal cities when they started asking for First+Last+1Mo Dep which often equaled $5k+ in one shot. That used to be a down payment for a house and it's absolutely ridiculous given the amount of money rental income sucks out of the economy that would otherwise be used for production and consumption.
In the United States, the government holds hundreds of millions of acres of land in trust and it needs to be relinquished in part to help grow the actual base of humanity they hold stewardship over, even if it means reducing investment values for the rich and powerful who have amassed so much through manufactured crises. Blackrock and other hedge funds should have never been given the power to buy homes the way they did by the Fed; it was just another shell game to hide their incredible myopia.
So much so, they are now backtracking on a labor advancement which is remote work in order to stabilize their personal portfolios in real estate. That's a conflict of interest that can be tantamount to investor fraud considering the Board is not acting in the best interest of the shareholders, but in the market for which they are beholden through consolidated power at hedge funds and banks.
Re: Office real estate crash will be so sharp, values unlikely to recover by 2040
#5Current market prices for a lot of commercial real estate seems to be a ponzi scheme especially in the US. It is not in the interest of any of the players to decrease prices only the renters.
Local government need higher prices as without the high property prices their property tax receipt will tank making them unable to meet their budgets. Banks need higher prices as they are highly leveraged and will be on the hook for billions. Same for most landlords they cant decrease the rent too much as that would decrease the value of the property and make the bank come after them to top up as they are also leveraged. Then we have got black money parked in real estate of western countries where such owners do not care much about rental income they are okay with their money being safe so dont care about renting. Then we got the countries themselves they turn a blind eye to this black money parked in their countries as it helps their economies. Plus if the black money/corruption money is from a politically exposed person they are able to be controlled/blackmailed by the 3 letter agencies of these countries.
Re: Office real estate crash will be so sharp, values unlikely to recover by 2040
#6crazy idea: us govt scoops up all the office real estate at the crash and converts to low income housing for free. Solve two crisis at once, the obviously coming real estate crisis and the homeless crisis. All for the cost of a handful of F35s
If only politicians had an iota of strategy.
Re: Office real estate crash will be so sharp, values unlikely to recover by 2040
#7Zero sympathy. Happy for the tyranny of the office to fade away.
Re: Office real estate crash will be so sharp, values unlikely to recover by 2040
#8crazy idea: us govt scoops up all the office real estate at the crash and converts to low income housing for free. Solve two crisis at once, the obviously coming real estate crisis and the homeless crisis. All for the cost of a handful of F35s If only politicians had an iota of strategy.
Lack of affordable housing is not a crisis for the ownership class.
Re: Office real estate crash will be so sharp, values unlikely to recover by 2040
#9This is why changing zoning laws is so important. These buildings and their underlying values can be saved by 'going condo' or conversion to smaller unit spaces for the purpose of housing so many who are struggling with massive increases to rent. Most rent does not increase because of increased asset expenses, it increases because of increased owner expenses and that quickly becomes a slippery slope in the face of ad…
> the government holds hundreds of millions of acres of land in trust and it needs to be relinquished
How would relinquishing that help, is access to land a real issue? You can probably already buy a lot for cheap right now, but it will be far from urban centers and won't be habitable without a ton of investment. Would have zero effect on housing.
Re: Office real estate crash will be so sharp, values unlikely to recover by 2040
#10crazy idea: us govt scoops up all the office real estate at the crash and converts to low income housing for free. Solve two crisis at once, the obviously coming real estate crisis and the homeless crisis. All for the cost of a handful of F35s If only politicians had an iota of strategy.
It’s not so easy to convert offices to living areas, although I think it’s been done in a few places