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The world’s empty office buildings have become a debt time bomb

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Re: The world’s empty office buildings have become a debt time bomb

#151

Post by tehjoker »

kibwen wrote: post #133
ajmurmann wrote: post #129

Earlier quoted context omitted.

That is definitely true. On the other hand, we also aren't fully accounting for the cost of sprawl. All infrastructure gets much more expensive with sprawl and that cost is usually equalized over an entire metro area with the urban core incurring very little infrastructure cost per person while the suburbs frequently come out negative on contributing tax$ - infrastructure cost. Carbon emissions which are higher with…

Yes, I'm not advocating for unchecked sprawl, all I'm saying is that there's a middle ground between suburban hell and Blade Runner dystopia, which brings me back around to my recommendation for six-ish-story buildings. European cities are the natural experiment that show how well even relatively "short" buildings can leverage the benefits of density.

For what it's worth, I thought blade runner was cool in that respect. Parts of Blade Runner were dystopian, but not the idea of having a big city (the advertising was dystopian iirc). My feeling is that if we have a strong urban core, we can rescue the countryside and nature from over-development. It's also nice to walk around cities. I have to drive everywhere outside of urban areas which sucks.

Re: The world’s empty office buildings have become a debt time bomb

#152

Post by closeparen »

kibwen wrote: post #149
closeparen wrote: post #145

Earlier quoted context omitted.

Yes and these buildings are awful to live in. Paper mache boxes with no sound isolation. If you are going to live in an apartment in the US, it's very important to live in a tower, even on a low floor, and not a mid-rise, because extreme engineering and exotic materials (relative to US construction norms) are necessary to make multifamily living tolerable.

The exotic materials and construction required for a skyscraper are due to a need for massive strength:weight ratios, and are a separate consideration from sound insulation. A desire to use less material overall (and therefore need to support less weight) will naturally drive a skyscraper to have as little of this material as it can get away with, which means poor sound insulation is the default. Naturally, low build…

Steel and concrete buildings are way quieter than wood in practice.

Re: The world’s empty office buildings have become a debt time bomb

#153

Post by smileysteve »

ambicapter wrote: post #95

So when is this time bomb exploding? We've been reading about this since Covid ended.

Since Covid Started.

My company had a sublease for 2 years; but Google says the average is 8 years for commercial leases. 2020+8 = 2028; which could align with the ~30% increases in vacancy rates; and climbing in 2023.

Re: The world’s empty office buildings have become a debt time bomb

#154

Post by onlyrealcuzzo »

ghaff wrote: post #139
onlyrealcuzzo wrote: post #113

Earlier quoted context omitted.

> People want to live close to work, and without sufficient housing in cities, commercial real estate in big cities was very likely to suffer in the long term. Your logic doesn't really follow. Assume that you can't develop cities any more and growth is stifled - this isn't really happening nationally - it is in some cities - but let's assume it's happening nationally anyway. Office values would still go up (nominall…

A lot of technology companies are in suburbs/exurbs. Silicon Valley is a suburb. Boston/Cambridge basically didn't have a single tech company of note in the city by the mid90s and that mostly just changed when pharma/biotech moved in, the Seaport developed, and west coast tech companies opened up mostly Kendall Square satellites. The whole era of Route 128 computer companies never had material real estate within the…

Cambridge being a suburb is like calling Brooklyn a suburb of NYC.

It's just a technicality of Boston not eating all the surrounding small cities like most larger cities eventually did.

The peninsula in The Bay is decidedly suburban - but it is sandwiched between two of the biggest cities in the US.

Re: The world’s empty office buildings have become a debt time bomb

#155

Post by [deleted] »

closeparen wrote: post #145
kibwen wrote: post #99

Earlier quoted context omitted.

> I wish we could solve zoning and permitting and just build our cities up. Lest people think that building up necessarily means skyscrapers, it doesn't. You can build a six-story building without any of the extreme engineering or exotic materials that skyscrapers require. Paris, Barcelona, and Amsterdam all manage high levels of density where the average resident will be living in a building of approximately six sto…

Yes and these buildings are awful to live in. Paper mache boxes with no sound isolation. If you are going to live in an apartment in the US, it's very important to live in a tower, even on a low floor, and not a mid-rise, because extreme engineering and exotic materials (relative to US construction norms) are necessary to make multifamily living tolerable.

[deleted]

Re: The world’s empty office buildings have become a debt time bomb

#156

Post by nunuvit »

closeparen wrote: post #152
kibwen wrote: post #149

Earlier quoted context omitted.

The exotic materials and construction required for a skyscraper are due to a need for massive strength:weight ratios, and are a separate consideration from sound insulation. A desire to use less material overall (and therefore need to support less weight) will naturally drive a skyscraper to have as little of this material as it can get away with, which means poor sound insulation is the default. Naturally, low build…

Steel and concrete buildings are way quieter than wood in practice.

Yeah, but they make shorter buildings out of steel and masonry, too. Next time you're apartment hunting, you can call ahead and ask whether the building is lumber construction, if you're not sure.

Re: The world’s empty office buildings have become a debt time bomb

#157

Post by HeyLaughingBoy »

ryanwaggoner wrote: post #128
klyrs wrote: post #123

Earlier quoted context omitted.

Like I said; I'm not sure about all jurisdictions but it's true where I live: https://www.canada.ca/en/revenue-agency/services/tax/busines... New York: https://www.tax.ny.gov/pit/letters/rental-loss.htm

No, you can deduct actual expenses, or uncollectible rent. This does not include theoretical rents that you would have received had the property been rented. No part of your deductible expenses is contingent on the market rent, or the last rent you charged.

> does not include theoretical rents

If only you could do that then I might still be a landlord :-)

Re: The world’s empty office buildings have become a debt time bomb

#158

Post by ghaff »

onlyrealcuzzo wrote: post #154
ghaff wrote: post #139

Earlier quoted context omitted.

A lot of technology companies are in suburbs/exurbs. Silicon Valley is a suburb. Boston/Cambridge basically didn't have a single tech company of note in the city by the mid90s and that mostly just changed when pharma/biotech moved in, the Seaport developed, and west coast tech companies opened up mostly Kendall Square satellites. The whole era of Route 128 computer companies never had material real estate within the…

Cambridge being a suburb is like calling Brooklyn a suburb of NYC. It's just a technicality of Boston not eating all the surrounding small cities like most larger cities eventually did. The peninsula in The Bay is decidedly suburban - but it is sandwiched between two of the biggest cities in the US.

I didn't mean to imply Cambridge was a suburb. (Hence Boston/Cambridge or really Boston/Cambridge/Somerville.) Cambridge also didn't have significant technology companies--as opposed to universities--in the late 90s.

Re: The world’s empty office buildings have become a debt time bomb

#159

Post by marcosdumay »

vkou wrote: post #104
marcosdumay wrote: post #54

Earlier quoted context omitted.

> But then your rent/sqft number goes down Yeah, that's the issue. I'm sure there's plenty of demand for commercial space on a lower rent. Commercial space is much more than offices, but those things are priced so that only high-margin artificially high-density knowledge work can afford them. Our modern cities are clearly not economically viable (proof of that is that people can't afford to live in them), so yeah, so…

> Our modern cities are clearly not economically viable (proof of that is that people can't afford to live in them) No, that's not sufficient proof. You'd need unaffordability, and high rates of rental vacancies to prove that. Most of the unaffordable cities have near-zero vacancy rates. "That place is too crowded now, nobody goes there anymore."

Well, you can only have high rates of vacancies if you have plenty of housing.
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