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Fearing losses, banks are quietly dumping real estate loans

nytimes.com

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Re: Fearing losses, banks are quietly dumping real estate loans

#81

Post by _sys49152 »

theandrewbailey wrote: post #22

> It’s an early but telling sign of the broader distress brewing in the commercial real estate market, which is hurting from the twin punches of high interest rates, which make it harder to refinance loans, and low occupancy rates for office buildings — an outcome of the pandemic. And that's what I think is behind much of the push for RTO. While a lot (if not most) office space is rented, corporate executives are the…

all those 'we are all in this together' billboards you saw posted up in 2020 wasnt for the frontline workers or cashiers.

Re: Fearing losses, banks are quietly dumping real estate loans

#82

Post by level1ten »

_sys49152 wrote: post #81
theandrewbailey wrote: post #22

> It’s an early but telling sign of the broader distress brewing in the commercial real estate market, which is hurting from the twin punches of high interest rates, which make it harder to refinance loans, and low occupancy rates for office buildings — an outcome of the pandemic. And that's what I think is behind much of the push for RTO. While a lot (if not most) office space is rented, corporate executives are the…

all those 'we are all in this together' billboards you saw posted up in 2020 wasnt for the frontline workers or cashiers.

Why would frontline workers need further encouragement after their 12 hour shifts when they were already being rewarded in the form of window displays [1] and gift cards [2] to Chipotle and Bed Bath & Beyond?

[1] https://www.travelandleisure.com/travel-news/monuments-hotel...

[2] https://newsroom.chipotle.com/2021-04-27-Chipotle-Invites-Fa...

Re: Fearing losses, banks are quietly dumping real estate loans

#83

Post by jjav »

charlie0 wrote: post #79
jjav wrote: post #71

Earlier quoted context omitted.

I know it's not what seems like the most fun solution but there is merit in this. For anyone in their 20s or 30s.. you only have so many years even if it seems life is long. If your current city makes it impossible to have the housing you want you have two choices. Try to change it, which is noble but can take many decades. Or move. I can't fault anyone for trying to change it since improvement is a great cause. But…

The compromise here could be you can now have vacations in Manhattan. There's an odd thing that happens to most of us where we become convinced we HAVE TO live in certain places and we get tunnel vision because of that. Personally, I think the sweet spot is living 20-40 minutes of such places. It tends to be more peaceful further from downtown areas, considerably more affordable, yet still close enough you could day-…

> I think the sweet spot is living 20-40 minutes of such places

Well it's more than that (where is it cheap 20 minutes from Manhattan?), but in general you're right.

Move out to the suburbs, far enough that it's cheap(ish) but you can still visit.

Re: Fearing losses, banks are quietly dumping real estate loans

#84

Post by jjav »

yunwal wrote: post #73
jjav wrote: post #71

Earlier quoted context omitted.

I know it's not what seems like the most fun solution but there is merit in this. For anyone in their 20s or 30s.. you only have so many years even if it seems life is long. If your current city makes it impossible to have the housing you want you have two choices. Try to change it, which is noble but can take many decades. Or move. I can't fault anyone for trying to change it since improvement is a great cause. But…

There are really really good reasons why certain places are expensive vs. cheap. Having no access to walkable areas, fresh food, education, safe water, or public amenities in general is not a dignified way to live for most people. It's not about fun, it's about your health, community, support system. Changing that situation in cheaper areas is not necessarily going to be easier than changing housing affordability.

> Having no access to walkable areas, fresh food, education, safe water, or public amenities in general is not a dignified way to live for most people.

These things are easily found outside of Manhattan (in my example, or whichever large downtown area you prefer).

In my little suburb I can walk to just about everything I could need, multiple farmers markets for fresh food (probably more than in Manhattan since there are many farms within an easy drive; not too many farms in Manhattan!), top rated schools, public parks, libraries, theaters, etc.

The only thing missing here compared to Manhattan is tons of bars within walking distance for the nightlife. There are a couple breweries within walking distance so that's good enough for me, given all the tradeoffs.

Re: Fearing losses, banks are quietly dumping real estate loans

#85

Post by ffgjgf1 »

killingtime74 wrote: post #66
dotBen wrote: post #36

I live in perpetual wonder that here in the US I have locked in a 30 year 2.3% mortgage, which I use for leverage, whereas back home in the UK people have to refinance every 2-5 years and so their mortgages trend roughly over the prevailing base rate for the term of the mortgage. Yes this article is about commercial real estate but it shows something is actually very broken from a credit market perspective - my loan…

You can get a fixed 30 year mortgage in the UK. Most people choose not to. There's nothing intrinsicly different about mortgages in the UK compared to the US.

Was there any point when you could get a 30 year fixed loan at 3% in the UK?

It makes sense that some banks might be offering them now at 7% since they have little to lose but I don’t think low interest longterm fixed mortgages are really possible without significant government interference (like in the US).

Re: Fearing losses, banks are quietly dumping real estate loans

#86

Post by nordsieck »

yowzadave wrote: post #64
nordsieck wrote: post #32

Earlier quoted context omitted.

None of that would be a problem if people could just build. We need to double the number of bedrooms in most major cities.

You probably mean we need to double the number of bedrooms available for sale/rent

> You probably mean we need to double the number of bedrooms available for sale/rent

No. I mean double the total number of bedrooms.

It is absolutely necessary public policy to completely gut the price of real estate across the country. I am aware that it'll be painful.

Re: Fearing losses, banks are quietly dumping real estate loans

#87

Post by nordsieck »

majormajor wrote: post #56
nordsieck wrote: post #44

Earlier quoted context omitted.

> There aren't enough people in most major cities to come anywhere occupying that many bedrooms. Right now. But that's because it's too expensive to live there, so people move to outlying areas. But if the cost of housing starts to drop, people will start moving in, which will stymie the cost declines. I'll admit that I'm not intimately familiar with all of the large cities in the US, but Seattle would be a slam dunk…

You ain't gonna make it cheap , exactly, in those places. Look at Manhattan compared to Seattle - there's ALREADY far more dense housing in NYC than Seattle, yet prices stay high. People will be willing to pay more for those places with more amenities. That will continue. But you're gonna make it a lot more livable and arrest the rate of inflation.

It may never be cheap, but it should be possible to drive down the cost of housing to the cost of construction. A big part of getting lots of building done is to take a chainsaw to existing regulation.

* No minimum lot size

* No parking space requirements

* No single family zoning in the city - minimum is multi-family, 15 stories.

* No requirement to match the character of the neighborhood

* No height based additional setbacks

* No rent control

* Get rid of the anti-dorm laws[1]

* No historical preservation without the city buying the property in question

* No building plan for the city - replace it with a "shall issue" policy where the city has to have some affirmative reason to block the permit or it gets issued by default.

There's probably a bunch more that should probably be done away with; those are the ones I can think of off the top of my head.

---

1. It's very common in cities to ban dwellings that house more than x (typically 4) un-related adults.

Re: Fearing losses, banks are quietly dumping real estate loans

#88

Post by cowsandmilk »

qwertyuiop_ wrote: post #2

These articles don’t provide the complete picture. Who are the buyers of these loans and what is their motivation knowing full well these are future underwater loans.

The article literally lists many examples of buyers of the loans, one in the first few sentences. I find it hard to believe you even opened the article.

Re: Fearing losses, banks are quietly dumping real estate loans

#89

Post by krageon »

jjav wrote: post #63
theandrewbailey wrote: post #22

> It’s an early but telling sign of the broader distress brewing in the commercial real estate market, which is hurting from the twin punches of high interest rates, which make it harder to refinance loans, and low occupancy rates for office buildings — an outcome of the pandemic. And that's what I think is behind much of the push for RTO. While a lot (if not most) office space is rented, corporate executives are the…

> corporate executives are the kind of people who could have a lot of money invested in commercial real estate Sure, many of them do. But there's something else they are far more invested in: their company (through huge pay and even larger stock option grants). I don't buy this meme that CxOs are willing to hurt company efficiency just to protect personal real estate investments, when for nearly all executive (I'm su…

You shouldn't assume this much competence of anyone, including anyone in upper management. This is a fallacy both you and the GP make, though it is a bit easier to believe that they think their company suffers because people work from home. It is a fairly incompetent attitude, with very little if any basis in real data.
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