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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

#151

Post by leetcrew »

hotpotamus wrote: post #55
2OEH8eoCRo0 wrote: post #53

Earlier quoted context omitted.

I don't want more low income housing and fewer F-35s though- in fact I want the exact opposite. Low income housing comes with associated costs to the city and the people who inhabit them pay essentially no taxes so everyone else's taxes need to go up.

I never really thought about the tradeoffs, but given that the F-35 is mostly used to destroy low income housing of government undesirables, I suppose there is some tension there.

the f-35 is mostly used for training. it has very few combat sorties to date.

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

#152

Post by nine_zeros »

snow_mac wrote: post #121
BeFlatXIII wrote: post #111

Earlier quoted context omitted.

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

This is a stupid response. Remember 2009 when the housing bubble popped and it effected the entire economy? With billions tied up in commercial real estate, it will have a wider impact then just office buildings and retail locations

> This is a stupid response. Remember 2009 when the housing bubble popped and it effected the entire economy? With billions tied up in commercial real estate, it will have a wider impact then just office buildings and retail locations

A lot of people are so disenfranchised from the wealth that the world could crash and they could care less. They are already at the bottom with nothing to lose.

Such is the inequality in America these days.

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

#153

Post by yazaddaruvala »

CydeWeys wrote: post #123
simple-thoughts wrote: post #99

Earlier quoted context omitted.

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.

Or we could just use the actual definitions of words rather than make everything worse and harder to follow along with.

Or we could just be flexible and evolve with any reasonable colloquialisms of the time.

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

#154

Post by cm2012 »

andsoitis wrote: post #144
bushbaba wrote: post #140

A collapse or real estate would be a good thing for the economy. It would free up middle class paychecks to be spent on more goods, driving long term growth of our businesses. The risk is without the correction you end up like many EU countries whos main GDP growth is real estate which only takes you a few generations to fall apart.

> The risk is without the correction you end up like many EU countries whos main GDP growth is real estate which only takes you a few generations to fall apart. What is an example country whose main GDP growth stems from real estate? The EU economy as a whole is driven mostly by the services sector, which accounted for 70% of value added in 2020. https://www.visualcapitalist.com/16-trillion-european-union-...

China right now. Massive real estate crisis brewing. Local government in China is funded by land sales, which encouraged rampant speculation.

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

#155

Post by ClumsyPilot »

bushbaba wrote: post #140

A collapse or real estate would be a good thing for the economy. It would free up middle class paychecks to be spent on more goods, driving long term growth of our businesses. The risk is without the correction you end up like many EU countries whos main GDP growth is real estate which only takes you a few generations to fall apart.

> main GDP growth is real estate

Its an abberation. This is a failure of GDP as a measurement tool. Growth in realestate prices makes us poorer

This is like saying that economy has geown because food got more expensive, so people can lo longer save.

its like saying that when I give poor people mt used clothes, I am damaging the economy because they no longer have to buyt clothes, so gdp will go down.

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

#156

Post by zonkerdonker »

gedy wrote: post #139
zzzbra wrote: post #130

The reasoning in this article seems specious. Malls and offices are not the locus of the same activities. fwiw I've RTOed for three to four days a week and I love it. I think it will continue to gain currency with a lot of folks who are serious about their work at companies with other employees who are also serious about their work.

> employees who are also serious about their work. Come on, office attendance is not a sign of being "serious about their work." Farting in an office chair all day is frequently a performance to feel busy or fill other needs in their lives.

I only go into the office when I'm not feeling serious about work. If I have shit to get done, I do it at the place with zero commute time and substantially less distractions. When I'm light, it's nice to go into the office to shoot the shit and hang out with coworkers.

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

#157

Post by dmbche »

endisneigh wrote: post #148
dmbche wrote: post #138

Earlier quoted context omitted.

Yeah - I'm spitballing on what to do with empty office space that no one would possibly want to buy if we don't go back to offices. I garantee you that keeping em empty isn't lucrative, so we gotta do something with them. Housing makes some sense. What are you suggesting?

I’m not suggesting anything. I don’t think turning office space into housing makes sense. I also don’t think getting the government involved makes sense either. The government is responsible for the current housing crisis to begin with with excessive zoning and enablement of small communities to block development.

Sweet. Thanks for the input.

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

#158

Post by the_optimist »

cm2012 wrote: post #154
andsoitis wrote: post #144

Earlier quoted context omitted.

> The risk is without the correction you end up like many EU countries whos main GDP growth is real estate which only takes you a few generations to fall apart. What is an example country whose main GDP growth stems from real estate? The EU economy as a whole is driven mostly by the services sector, which accounted for 70% of value added in 2020. https://www.visualcapitalist.com/16-trillion-european-union-...

China right now. Massive real estate crisis brewing. Local government in China is funded by land sales, which encouraged rampant speculation.

Perhaps, though this potential Ponzi has been brewing for nearly two decades. If they grow out of it, it’s definitionally not a Ponzi.

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

#159

Post by johnyzee »

jdross wrote: post #20
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.

Cheaper to tear down commercial RE and rebuild multi-family than to attempt a conversion. Floor plates made of high tension steel can’t be broken up for replumbing, usually you’ll want or need elevators & interior courtyards needed for lighting. There are very different water & electrical requirements Maybe there’s a creative way to do low-income housing meaning only a window or two in the whole unit, no individual H…

There are solutions that redirect actual sunlight from outside, into dark interior spaces. They use them in many modern metro stations, and they work pretty well to get the feeling of actual overhead windows. AFAIK some of these solutions successfully channel almost the entire spectrum of real sunlight. I always feel that this is way under utilized - I could hardly name a building that wouldn't benefit from additional sunlight in some of the interior spaces. The systems are currently quite expensive, so that's probably part of it.

As for plumbing, like you I also speculate if they could not just do a raised floor, or possibly inside/along walls, to increase the reach. They already do this in some renovations of very old buildings where they want to create a large central kitchen (resulting in almost horizontal plumbing that clogs like nobody's business).

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

#160

Post by xbmcuser »

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…

It is a ponzi scheme in the sense where the last person to buy in will be left with something that is worth a lot less than what they bought it for. In practical terms they lose all their money as most people would buy real estate with financing now. You pay $10million for $50million property. The property value drops to $35-40 now the bank owns the property you have $0.
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