Office real estate crash will be so sharp, values unlikely to recover by 2040 • Hacker News Board

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

#191

Post by lost_tourist » Sun, Jun 25, 2023, 6:07 PM UTC

jprete wrote: post #46

spokeonawheel wrote: post #40

Earlier quoted context omitted.

ignoring code for a minute, for the most vulnerable, having a roof over their head is a serious challenge, and only getting worse as more and more people get kicked out onto the streets. Additionally, I am suggesting that this would be a government social service. USA is a deplorable example of how to view and treat homeless.

It can be better than the status quo, but there will still be major newspapers running stories about the homeless being warehoused in lightless holes with bad bathroom access and no kitchens.

Lol I lived in a basement with no windows for half of my college education, it was fine. People adapt. Shelter is almost as important as food and sometimes more important, otherwise you freeze to death.

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

#192

Post by phendrenad2 » Sun, Jun 25, 2023, 6:10 PM UTC

The prices will crash and foreign companies like Samsung and Huawei will scoop them up, opening offices and bringing much-needed careers to distressed areas.

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

#193

Post by htss2013 » Sun, Jun 25, 2023, 6:32 PM UTC

lamontcg wrote: post #134

williamcotton wrote: post #49

Earlier quoted context omitted.

How is it a ponzi scheme? There is actual real estate being bought, sold and rented. What has happened is that demand for office space has dropped dramatically. The proper market reaction is to spend the money to convert these office spaces to some other use, perhaps residential. Then these properties will more likely find tenants.

> The proper market reaction is to spend the money to convert these office spaces to some other use, perhaps residential. That would be very expensive. To be able to afford that, the prices need to crash seriously hard.

It would be expensive but so would a banking and general financial crisis caused by empty office buildings and CMBS turning into toilet paper. The government will pay for it either way and the currency will be inflated either way. God forbid the money be used for housing instead of never ending wars.

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

#194

Post by thepuppet33r » Sun, Jun 25, 2023, 6:33 PM UTC

We were told (unofficially) that the whole reason we were being brought back into the office three days a week was because they needed to make their real estate holdings worth something again.

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

#195

Post by thepuppet33r » Sun, Jun 25, 2023, 6:35 PM UTC

adhesive_wombat wrote: post #167

ClumsyPilot wrote: post #155

Earlier quoted context omitted.

> 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.

Bill Bryson had it right. > Here's another arresting thought. None of this really matters because GDP is in any case a perfectly useless measurement All that it is, literally, is a crude measure of national income - 'the dollar value of finished goods and services', as the textbooks put it - over a given period. > Any kind of economic activity adds to the gross domestic product. It doesn't matter whether its a good a…

Always love a Bill Bryson quote in the wild. And it's true: I contribute less to GDP by living frugally with my family than I would spending away my savings in Vegas while paying alimony and managing messy divorce.

Pure economics does not incentivize stability.

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

#196

Post by fdye » Sun, Jun 25, 2023, 6:39 PM UTC

What I think is interesting, at least in the case of Veritas default in SF, is that they are then allowed to bid to buy the debt at a discounted price. They are using a different financial backer and likely just management on the properties, but still it seems like if you mismanage your portfolio so bad you default you probably then shouldn't be allowed to rebuy those same properties. If they wanted a debt restructuring they should have been forced through bankruptcy.

https://therealdeal.com/sanfrancisco/2023/05/31/veritas-to-b...

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

#197

Post by klipklop » Sun, Jun 25, 2023, 6:42 PM UTC

Good. The US commercial real estate bubble is killing small shops and small business owned retail.

It's pretty unlikely it will actually crash though. Too many of the elite have too much money dumped into it. We will continue to see small closet sized shops with rents of $20,000 for the foreseeable future I suspect.

Too big to fail, etc.

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

#198

Post by baremetal » Sun, Jun 25, 2023, 6:44 PM UTC

heywhatupboys wrote: post #67

baremetal wrote: post #36

Earlier quoted context omitted.

Are you joking or serious? We have had multiple bank failures this year. And so many banks are holding large amounts of commercial real estate and also long term bonds they can't mark to market without suffering monster losses.

> We have had multiple bank failures this year. that is the whole point. We had a top-10 bank fail, and you know what? our financial institutions did not cascade into failure. There WILL always be failures, ups and downs, the question is how it is mitigated.

>There WILL always be failures, ups and downs, the question is how it is mitigated.

Privatized profits, socialized losses.

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

#199

Post by hrnnnnnn » Sun, Jun 25, 2023, 6:46 PM UTC

ClumsyPilot wrote: post #155

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.

"The more stitches, the less riches."

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

#200

Post by lamontcg » Sun, Jun 25, 2023, 6:46 PM UTC

htss2013 wrote: post #193

lamontcg wrote: post #134

Earlier quoted context omitted.

> The proper market reaction is to spend the money to convert these office spaces to some other use, perhaps residential. That would be very expensive. To be able to afford that, the prices need to crash seriously hard.

It would be expensive but so would a banking and general financial crisis caused by empty office buildings and CMBS turning into toilet paper. The government will pay for it either way and the currency will be inflated either way. God forbid the money be used for housing instead of never ending wars.

I mean I agree, but I can also predict the screaming at politicians if the government starts giving handouts to developers (particularly from the people with vested interest in keeping residential real estate inflated).