Posted on 03/11/2024 7:10:22 AM PDT by Kaiser8408a
Holders of commercial real estate (CRE) debt are riding the tiger. Meaning that if interest rates don’t come down, there will be a lot of pain and suffering.
“We’re far from neutral now,” said America’s Fed Chairman, Jerome Powell, to the Senate Banking Committee. As The Fed moves closer to cutting rates.
All those rent-seekers stacked up with commercial real estate holdings nodded in violent agreement. That of course includes the nation’s regional banks, which continue to succumb to the power of their systemically important rivals, now so big that they cannot possibly be allowed to fail.
Sometimes neutral rates have no effect at all. Which is to say that the economic impact of real rates simply depends. Like now when signals are far from uniform. Stock markets hit all-time highs despite collapsing commercial real estate, crypto and gold prices are soaring to records, massive government stimulus programs like the IRA are cranking up, student debt is being forgiven in successive waves, unemployment is near record lows, core inflation is starting to rise again, and the budget deficit is around 6% despite robust GDP growth.
All of which screams that a 0.50% real rate is preposterously low to everyone but economic PhDs.
(Excerpt) Read more at confoundedinterest.net ...
Beware the Ides of March.
“Vanbarton Group and the architecture firm Gensler. They’re currently finishing up their transformation of 160 Water Street, a 1970s office tower in lower Manhattan that will become 586 apartments. This comes after Vanbarton worked with the architecture firm CetraRuddy to convert a similar building at 180 Water Street into 574 units back in 2017.”
https://www.businessinsider.com/how-nyc-office-buildings-towers-became-housing-2023-9
“Most of the estimated 96 million square feet of vacant office space in New York City would be prohibitively expensive, or illegal, to turn into housing.”
The FDIC needs the legal power to void any & all affordable housing requirements, non-structural integrity building code and energy efficiency requirements on buildings with mortgages issued by federally insured institutions.
Well maybe we shouldn’t be adding a $1 Trillion of debt to the deficit every 100 days? Our country is run by morons.
Holders of commercial real estate (CRE) debt are riding the tiger. Meaning that if interest rates don’t come down, there will be a lot of pain and suffering.
“We’re far from neutral now,” said America’s Fed Chairman, Jerome Powell, to the Senate Banking Committee. As The Fed moves closer to cutting rates.
All those rent-seekers stacked up with commercial real estate holdings nodded in violent agreement.
Is the Gensler of the SEC related to the architecture firm?
What they might do is to sell a floor at a time to foreign investors.
Where would they eat? At a restaurant on the first floor. Where would they sleep? In a nearby hotel.
The 10,000 square feet make a nice studio for the wife, she’s very artistic, almost as talented as Hunter Biden. The very nice furnishing inspire her. Sometimes she has friends over for mutual inspiration.
We would have paid ten times the price for an apartment elsewhere in Manhattan. The hotel room for sleeping is less than the real estate taxes would be and we only have to pay for the hotel room when we are in the city.
What they might do is to sell a floor at a time to foreign investors.
Where would they eat? At a restaurant on the first floor. Where would they sleep? In a nearby hotel.
The 10,000 square feet make a nice studio for the wife, she’s very artistic, almost as talented as Hunter Biden. The very nice furnishing inspire her. Sometimes she has friends over for mutual inspiration.
We would have paid ten times the price for an apartment elsewhere in Manhattan. The hotel room for sleeping is less than the real estate taxes would be and we only have to pay for the hotel room when we are in the city.
I have some business associates who are selling their commercial buildings at a steep discount now. The typical scenario involves a commercial mortgage that comes due at the end of this year, and the landlord knows he’d have to come up with a pile of cash to pay down the balance before refinancing the loan. They all expect the appraisals on these properties to be about 25% to 40% lower now than they were when the loans were originally cast five years ago.
“Gensler is a global architecture, design, and planning firm with 53 locations and 6,000+ professionals networked across the Americas, Europe, Greater China, Asia Pacific, and the Middle East. Founded in 1965, the firm works globally with more than 3,500 clients across 33 practice areas spanning the work, lifestyle, cities, and health sectors.”
I didn’t find the founder’s first name there.
“Gensler was born into a Jewish family in Baltimore, Maryland, one of five children of Jane (née Tilles) and Sam Gensler. Sam Gensler was a cigarette and pinball machine vendor to local bars, and he provided Gensler with his first exposure to the real-world side of finance when Sam would take Gensler to the bars of Baltimore to count nickels from the vending machines.
“Gensler graduated from Pikesville High School in 1975, where he was later given a Distinguished Alumnus award. Gensler graduated with a degree in economics, summa cum laude, after three years at the Wharton School at the University of Pennsylvania, followed by a master’s in business administration the following year.”
“In 1979, Gensler joined Goldman Sachs, where he spent 18 years. At 30, Gensler became one of the youngest persons to have made partner at the firm at the time.”
“While at Goldman Sachs, Gensler led a team that advised the National Football League in capturing the then-most lucrative deal in television history, when the NFL secured a $3.6 billion deal selling television sports rights.”
https://en.wikipedia.org/wiki/Gary_Gensler
The overseas Chinese need a place to park their money.
Vacant office space in the US is cheap and there’s a lot of it.
WIKI
Gensler is a global design and architecture firm headquartered in San Francisco, California. It is the largest architecture firm in the world by revenue and number of architects.
Art Gensler founded the firm in 1965, along with his wife Drue Gensler and their associate James Follett. They originally focused on corporate interiors, for newly constructed office buildings including the Alcoa Building (1967) and the Bank of America Building (1969), both in San Francisco. The firm has since diversified into numerous forms of architecture and design, including commercial office buildings, retail centers, airports, education facilities, entertainment complexes, planning and urban design, mission-critical facilities, consulting, brand design, and other areas.
Gensler grew rapidly with offices opening around the U.S. in the 1970s and 1980s and then overseas in the 1980s and 1990s. In 1972, the firm established an office in Houston to provide interior design services for Pennzoil Company’s 600,000-sq-ft corporate headquarters. In 1979, the firm opened its New York office to provide interior design and production services for Mobil Oil Corporation’s corporate headquarters in Fairfax, Virginia. In 1988, the firm launched its first overseas office in London, followed by new offices in Tokyo and Hong Kong in 1993. In 2002, Gensler opened an office in Shanghai, establishing a permanent presence in China. By the early 2000s, Gensler was the largest architecture and design company headquartered in the U.S.
https://en.wikipedia.org/wiki/Gensler
I am constantly amazed TPTB can keep those plates spinning. Any minute now.....
At least the fat lady looks happy.
Millions of illegal aliens need free housing
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