Massive 40% drop in US office building prices, 30% in a year, 1 in 5 vacant, signaling bankruptcies.

Citizen Watch Report ^

[cgbg]

The numbers I would like to see is what portion of these involved government loans and/or grants—federal, state or local.

[libertylover]

“Atlas Shrugged” immediately comes to mind.

[EVO X]

I’ve been retired from IT for some years now. Not sure how it works now, but OEM tech support was fairly decent for business class computers back then. If the computer was a home machine, more often than not I was sent to tech support hell.

My elderly parents started having major Comcast problems a few months ago. The signal would dropout sporadically. The problem is the cable and splitters exposed to the weather degrade every 10 to 15 years or so. Also, squirrels like chewing on exposed cable. When I made it into town for a visit, I saw what was going on. So I call tech support and they say they can’t do anything because the equipment is online. I had to read them the riot act and threaten to cancel cable. Sure enough when the tech came out, he had to replace the outdoor components. Offshored tech support can’t think on their feet. If the problem isn’t on their flow chart, it causes an endless loop.

[RoosterRedux]

What about property tax breaks? Isn't it better for a city to offer a property tax break than to have a building torn down or sit vacant?

You can't blame a developer for asking for a deferment or reduction of property taxes.

I have had many RE developer clients (top national developers). They always seek money from every source available. They would be foolish to leave money on the table.

But to say that projects make no sense without such breaks, grants, or loans is to project an opinion without knowing the facts.

The economic viability of ALL of the large projects that I financed over the years were affected by, for example, a rise or fall of interest rates. Projects become more attractive when a seller lowers his price or when a city provides a break in property taxers. That's the nature of business

As a banker, you know that for a fact.

[cgbg]

Here is one article that discusses some of the reasons the deals will not “pencil out” in many cases:

https://www.smartcitiesdive.com/news/office-residential-conversions-often-hinge-government-cooperation-affordable-housing/642366/

Btw—the article also mentions tax credits—those would require affordable housing which I discussed earlier.

Imho on a national level the number of new units created with totally private financing and no affordable housing requirements as a result is very small as a percentage of all new units, whether condo or apartment.

[cgbg]

I have nothing against tax breaks if they do not come with affordable housing requirements.

That is the key—because the future of the project imho depends on not having those requirements.

[AlaskaErik]

This and POLITICS is the real reason a lot of companies are trying to force employees back to the office against the wishes of most workers.

If the cost of leasing office space exceeds the loss in productivity of WFH employees I would think companies would be glad to reduce the amount space they lease.

[FLT-bird]

Offshored tech support can’t think on their feet. If the problem isn’t on their flow chart, it causes an endless loop.

This! They're nowhere near as flexible. They do a great job of teaching them technical skills but nowhere near as good of a job at teaching them to think for themselves, come up with creative solutions, etc. That's just tech. I can tell you in banking, there are roles you have to be a US Citizen for.

[FLT-bird]

If the cost of leasing office space exceeds the loss in productivity of WFH employees I would think companies would be glad to reduce the amount space they lease.

You will see plenty of companies make that calculation....as their long term leases expire.

[RoosterRedux]

And, while they’re at it, companies should weigh the advantages/disadvantages of turning WFH employees into contract workers.

[EVO X]

Tech problems can be subtle. My mom had been complaining she was getting notifications she was just about to have her cell phone data rate throttled. After the cable fix, the cellphone error messages went away..

[RoosterRedux]

My point is that the economics for an office-to-condo conversion make a heck of a lot more sense when the building in question is on the verge of bankruptcy or is a candidate for demolition.

I think working with any government is a pain in the neck, but if my client didn't look at all the angles, I would lose confidence in him.

FWIW, I wasn't a lender...I was an investment banker. I raised capital via private placements and/or public offerings.

[kiryandil]

clickbait garbage

[Alberta's Child]

One of the big challenges with office-to-residential conversions is that they really have to be done on a large scale involving multiple types of lane uses. Think of all the nearby services you require at home that aren’t usually available in an office complex or a dense urban center. Retail stores and commercial services in these areas, for example, are oriented toward workers who live somewhere else and work in the area for no more than 10 hours per day, 5-6 days per week.

The last time I worked in a large city, I could find dozens of coffee shops, restaurants, drug stores and office supply stores within 300 yards of my building … but not a single grocery store, clothing store or day care center.

[griswold3]

After SVB failure ,3/2023 federal reserve creates “Bank term funding program” effectively nationalizing the banks
https://www.swfinstitute.org/news/100795/behind-the-scenes-banks-are-tapping-the-bank-term-funding-program
There should never be another bank failure

[minnesota_bound]

#43 My sister has Xfinity in Robbinsdale, Minnesota and she was having bad internet speed with dropouts. She called and called and they did send someone out at times but did not fix the issue.
She called again and again, you do not want her calling.... : )
They came out and replaced the line from the telephone pole to the house. The issue was fixed. The tech guy said it probably had not been replaced in decades.

[Pajamajan]

bttt

[Pappy Smear]

My employer was going to not renew the lease on my office. (My boss is there, I've been remote since 1997) Pre-covid there were typically 40 people in the office. Today, any given day might have 3 people in there.

But the building owner made an offer my company couldn't refuse, and they kept the space. My company figured the value of having a place to store crap, have conference rooms for the occasional in person meetings was worth the low low price they got to renew.

The suburban office park where this is at probably has 50% vacancy right now.

[EVO X]

A 20 something tech support “specialist” isn’t likely to fathom that 40 year old cabling as being a potential problem. This is 2024 dammit. Recent cable company equipment and third party equipment approved for use should be able to detect substantial signal degradation..