Posted on 04/03/2024 7:38:05 AM PDT by Kaiser8408a
Bidenomics is also a Highway To Hell for commercial real estate. Let’s say real estate is thunderstruck under Bidenomics.
There are more dormant office towers in the United States than at any point since 1979, according to a new report from Moody’s Analytics, which began tracking office leasing vacancies that year.
The rising supply of office space is due to a combination of surging remote and hybrid work that forces companies to reduce corporate footprints. Also, companies are exiting imploding progressive cities and high-taxed blue states for red ones while downsizing space.
In the report, office tower vacancies rose to a record 19.8%, up from 19.6% in the fourth quarter of 2023.
Even with the increase, there is an eerily calm across the commercial real estate sector. This comes as the Federal Reserve’s interest rate hiking cycle is higher for longer, indicating that the pain train is nearing (perhaps after the presidential election).
“The office stress isn’t quite done yet,” Thomas LaSalvia, Moody’s head of commercial real estate economics and one of the authors of the report, told Bloomberg in an interview. He noted recent positive economic indicators stave off a “perfect storm in the office sector.”
The high office vacancy rate continues to be terrible news for landlords and developers eager to fill their buildings, and the Fed’s hiking cycle has made refinancing very challenging.
Last month, Goldman’s Vinay Viswanathan penned a note explaining how “office mortgages are living on borrowed time.”
Viswanathan said there have been no major fireworks in CRE tower debt because the debt is being “extended and modified rather than refinanced,” which “mitigates a default wave and a sharp pick-up in losses on CRE loan portfolios.”
Yes, both residential and commercial real estate are thunderstruck under Bidenomics.
(Excerpt) Read more at confoundedinterest.net ...
These liabilities will, for the most part, eventually end up on the Federal Reserve’s balance sheet
ie) if the crisis becomes significant or “systemic,” banks, especially the large money-center ones, will be bailed out.
LOL. There is talk in blue cities such as San Francisco to use the empty office buildings for housing for the homeless.
My son works in tech - the owner of his firm sold the office building during COVID so there IS no office to return to, everything is now done remotely and online - and looks like there will be no going back. My son tells me this is happening all over in the tech industry.
The US Treasury will protect and fund the banks who are carrying collectively over one trillion in loans and mortgages that cannot be paid until election day. A collapse before hand will result in an unbelievable Democratic rout. The Biden cabal and Wall street will do all they can to prevent it from happening before November ,2024.
This started with all the stupid covid lock downs. (not trumps fault) Businesses realized their work force was at least productive enough that dumping the office space was a net positive to the balance sheet.
Technology has come to a point you don’t need an office. I’ve worked from Home since 2007 for 5 different multi-nationals and national corporations. I work in a small start up technology company now, all 44 of us work from home. I’ve never once met any of my co-workers face to face. Not my manager, not the CEO, no one. We jump in video meetings 2-3 times a day, log into conference calls, message each other in group slack conversations.
There are still productivity and performance expectations. The company is excelling. It works as well as any office setting I used to be in. Arguably better without all the BS wasted chit-chat hall gossip time.
Caveat - We don’t hire new college grads with no track record. We don’t use DEI, it’s strictly meritocracy.
Loaf from home is certainly alive and well and getting better every day for feral grifters, formerly known as employees.
Seems that at least half of what was once a sort of workforce is now at home in their underwear doing something besides working.
wait till they figure out that job can be done from india. The downside to a job that can be done remotely it that it can be done from anywhere.
A collapse before hand will result in an unbelievable Democratic rout.
and one after can be blamed on republicans.
We identified one of the biggest problems of loaf from home being the inability to train and mentor new workers.
The only people that are butthurt about WFH are the legacy midlevel managers who never really had any point in life to begin with, but remote lays it bare.
I work “remotely” in a STEM field, and I have just started work on a major contract that will last through the end of 2026. I’m working for a client whose biggest customer called them and practically begged them to bring me on board.
Most of my competitors do their work from the comfort of an office — either “on-site” or “remote.” I do, too … but it seems that I’m also the only one who takes the time to visit project sites in person. I’ve still got the mud on my truck from the site visit I did on Monday.
Sounds like the last and final replay of the 2008 depression level event is about to begin....
.
Offices exist today so that incompetent managers can torture mediocre employees.
The world of competent managers and employees are virtual.
India and Pakistani replacements have a few ah issues.
They are best discovered the hard way.
oh I know. I deal with them daily.
There have been several former office buildings in downtown Manchester, NH that have been converted to apartments.
Here is an example owned by a major apartment renting company in NH & MA called Brady Sullivan. When this building was originally constructed it was the tallest in the city. The apartments are not cheap.
https://www.zillow.com/apartments/manchester-nh/the-residence-at-1000-elm/96T6r2/
This is not the first office building in Manchester converted to apartments in the last five years. The Citizens Bank building was done about four years ago.
Serves these businesses right. They followed the edicts of a complete psychopath and are dealing with the consequences.
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