Can any of these be turned into residences? I'm sure there's zoning and similar nonsense, but in the real world there's also problems like having enough water hookups.
Commercial property deals in the US are starting to pick up at deep discounts
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Re: Commercial property deals in the US are starting to pick up at deep discounts
#12Can any of these be turned into residences? I'm sure there's zoning and similar nonsense, but in the real world there's also problems like having enough water hookups.
How about temporary housing for immigrants and refugees?
Re: Commercial property deals in the US are starting to pick up at deep discounts
#13Earlier quoted context omitted.
New York now has the lowest apartment vacancy rates in 50 years. But there’s a lot of empty storefronts and office space for lease - especially in the older office buildings. One could say that those should be fast tracked for conversion to residential properties - but those are a multi-year projects. So no help for housing in the short term.
A lot of commercial property can’t be converted efficiently due to regulatory requirements in how the structures are constructed. It would be better to tear it down in many cases.
Or change the regulations? That seems a lot easier and cheaper?
Re: Commercial property deals in the US are starting to pick up at deep discounts
#14Can any of these be turned into residences? I'm sure there's zoning and similar nonsense, but in the real world there's also problems like having enough water hookups.
I think the problem is that, even if you could convert them, it's a massive investment to do so. And money is real expensive these days.
So first the buildings have to lose so much value that the math works.
Re: Commercial property deals in the US are starting to pick up at deep discounts
#15Only speaking from my personal travel experiences, not any hard data, but: I feel like this issue is nearly non-existent in places with mixed use zoning. If the office values go down in a place with equal amounts of housing, they are repurposed as new apartments. The problem is when the office architecture isn’t interchangeable with apartment architecture, which usually happens because certain areas are zoned as office-only.
Re: Commercial property deals in the US are starting to pick up at deep discounts
#16Can any of these be turned into residences? I'm sure there's zoning and similar nonsense, but in the real world there's also problems like having enough water hookups.
The specific buildings mentioned? I have no idea.
It is possible in some though, this is an example from London - https://en.wikipedia.org/wiki/Centre_Point
I worked for one of the last companies out in ... I think it was 2014. Three years to refurb and now it's one of London's ghost towers - full of apartments bought by overseas investors, standing largely empty.
(Or in this case, from reports in about 2018, standing empty because it turns out that very few people actually want to pay 1.8 million pounds for a one bedroom flat, even in London. It's quite fitting as apparently the block spent nearly a decade empty after construction too.)
Re: Commercial property deals in the US are starting to pick up at deep discounts
#17Can any of these be turned into residences? I'm sure there's zoning and similar nonsense, but in the real world there's also problems like having enough water hookups.
There have been many articles in the last few months about conversions. The regulations make it extremely expensive to turn in office into a home. There was an article last fall where someone backed out of doing that for a tower in San Francisco because in addition to the standard regulations there was also requirement that some of the units be set aside for low rent and that made the conversion economically unfeasible even for the biggest optimist
Re: Commercial property deals in the US are starting to pick up at deep discounts
#18Can any of these be turned into residences? I'm sure there's zoning and similar nonsense, but in the real world there's also problems like having enough water hookups.
They can, with enough money. The problem is that these will need to be sold at an even steeper discount so that throwing enough money at the renovation makes sense. That means whoever currently holds the loan will eat a huge loss, whether there is a conversion to residential or not.
Re: Commercial property deals in the US are starting to pick up at deep discounts
#19Paywall: https://archive.is/meem7 >
Archive doesn't seem to work for me for bloomberg articles anymore, I dunno why. I can only access ones archived by others
Re: Commercial property deals in the US are starting to pick up at deep discounts
#20Can any of these be turned into residences? I'm sure there's zoning and similar nonsense, but in the real world there's also problems like having enough water hookups.
They can, with enough money. The problem is that these will need to be sold at an even steeper discount so that throwing enough money at the renovation makes sense. That means whoever currently holds the loan will eat a huge loss, whether there is a conversion to residential or not.
What was i told... the market is always a gamble? Or should we once again bail out smart "investors" on the backs of hard workering Americans tax dollars?