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Office real estate crash will be so sharp, values unlikely to recover by 2040

fortune.com

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Re: Office real estate crash will be so sharp, values unlikely to recover by 2040

#111

Post by BeFlatXIII »

xbmcuser wrote: post #5

Current 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…

Those are all reasons why I hope the crash is as big as possible. Let's enjoy the show.

Re: Office real estate crash will be so sharp, values unlikely to recover by 2040

#113

Post by dmbche »

hotpotamus wrote: post #79
m0llusk wrote: post #74

Earlier quoted context omitted.

Strictly speaking it is true that the F-35 is an air superiority fighter. At a more general level it is only a component of a larger war machine. Air superiority is typically asserted as part of a planned force projection. Civilian mobility and assets are commonly lost during military operations. None of this has much application to urban land use policy either way.

> Strictly speaking it is true that the F-35 is an air superiority fighter. I wonder, does it have more kills in the air or on the ground?

Probably more ground - but that's not the point. The f-35 is built to be good in all conditions, have long range and carry quite a lot of ordonance, all the while being quite stealthy. It's a do-it-all plane.(80-120M usd)

The f16 is made to stay close to airbases and defend against intrusions. Kinda cheap - relatively.(60 M usd)

The f22 is the peak stealth air superiority fighter. It's made to go anywhere and murder anything. Much, much more expensive. Does not carry that much ordonance.(150M usd)

F18A are made to be do it alls on carriers.(66 M usd)

(I'd love to be corrected if i'm wrong)

Re: Office real estate crash will be so sharp, values unlikely to recover by 2040

#114

Post by salawat »

kryogen1c wrote: post #69
bell-cot wrote: post #12

Earlier quoted context omitted.

Ponzi scheme? Yes. Lots of major players who really don't want the Ponzi pyramid to collapse? Yes. But, long-term, no Ponzi pyramid can avoid collapse. Black money is not infinite, and can get skittish when the music starts fading. A central bank printing money can prop the pyramid up...for a while. But that only makes the collapse bigger, and takes more of the central bank's economy down with it when it finally does…

>> Current market prices for a lot of commercial real estate seems to be a ponzi scheme > Ponzi scheme? Yes. How in the world are these the top comment and top reply? Commercial real estate isn't a ponzi scheme. Like, at all. In any way, shape, or form. There are disparate actors making separate, uncoordinated decisions. There are single transactions being made delivering real value. There's no long term holdings fal…

>There are disparate actors making separate, uncoordinated decisions.

You sure about that?

https://www.propublica.org/article/yieldstar-rent-increase-r...

Would not completely write out the possibility of collusion, even if non-Ponzi in nature. DoJ has been sniffing around various actors that have been increasingly found to be acting in a cartel-like manner to keep rents high.

Re: Office real estate crash will be so sharp, values unlikely to recover by 2040

#115

Post by endisneigh »

dmbche wrote: post #84
endisneigh wrote: post #80

Earlier quoted context omitted.

Why would the owners of the office space sell? They could do this themselves if it’s that lucrative.

Sure - that's also a great option, the government will make money on the permits and taxes from converting and selling/renting. Still better than keeping everything empty. It's possible the owners wouldn't want to start running a renting to tenants business if they were renting office space, since it's less money per client and more maintenance/running costs. The governement could very well be better at handling this…

From what you’re saying it doesn’t sound like it would be lucrative. Lotta conjecture and hand waiving here

Re: Office real estate crash will be so sharp, values unlikely to recover by 2040

#116

Post by WillPostForFood »

eganist wrote: post #15
spokeonawheel wrote: post #6

crazy 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.

Code requirements for housing are far more strict. One of the reasons you don't regularly see office building conversions is because homes require things like windows for each bedroom or at least one bathroom per home. While the bathrooms can be fixed with effort, windows mean a lot of office spaces would have empty cores as only the square footage near the outer edge of the building would be used. (This isn't my are…

windows mean a lot of office spaces would have empty cores

Just change the code.

Re: Office real estate crash will be so sharp, values unlikely to recover by 2040

#117

Post by [deleted] »

simple-thoughts wrote: post #99
kryogen1c wrote: post #69

Earlier quoted context omitted.

>> Current market prices for a lot of commercial real estate seems to be a ponzi scheme > Ponzi scheme? Yes. How in the world are these the top comment and top reply? Commercial real estate isn't a ponzi scheme. Like, at all. In any way, shape, or form. There are disparate actors making separate, uncoordinated decisions. There are single transactions being made delivering real value. There's no long term holdings fal…

In common parlance, an asset bubble is called a Ponzi scheme. Actual Ponzi schemes should be referred to as “rob peter to pay Paul” scams to prevent confusion.

[deleted]

Re: Office real estate crash will be so sharp, values unlikely to recover by 2040

#118

Post by dmoy »

capitalsigma wrote: post #107
Jabrov wrote: post #83

Earlier quoted context omitted.

That still doesn’t make it a Ponzi scheme . Don’t just throw the word around.

Ponzi scheme is when the price collapses for something that I don't like, and the more that I don't like it the Ponzi-er it is

That is not what a ponzi scheme is

Re: Office real estate crash will be so sharp, values unlikely to recover by 2040

#119

Post by klodolph »

andsoitis wrote: post #85
xbmcuser wrote: post #5

Current 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…

> Current market prices for a lot of commercial real estate seems to be a ponzi scheme especially in the US A ponzi scheme is fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors. Where is the nonexistent enterprise? How is money from later investors used to hoodwink the first investors by pretending…

> A ponzi scheme is fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.

If you’re going to copy/paste a dictionary definition, you should probably cite the dictionary you are using (Oxford, it looks like).

I think the correct term here is “speculative bubble”, but there are deep similarities between a speculative bubble and a Ponzi scheme. The similarities run deep enough that I do not think it is worth fighting over the difference between a Ponzi scheme and a speculative bubble. In both a speculative bubble and a Ponzi scheme, early investors are paid out with funds taken from later investors, for an asset which does not have enough utility to justify those payouts.

In a Ponzi scheme, it’s one person or entity running it, and in a speculative bubble, it’s just “the market”. But the market is just a bunch of people. And I don’t think the bad faith component of Ponzi schemes should be considered a necessary component.

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