Employees working for firms located in large cities are adamant about not returning to the office. Getting used to working from home along with the increased crime in inner cities (also caused by democrat policies) has them putting their foot down and insisting that "No, we aren't returning to that commute and rat-race and risk being mugged or killed". The employees attitude is that if the employer thought they could work from home and still get their job done for the past three years, then they can still do the same for the foreseeable future.
The commercial buildings remain vacant. Companies are locked into loans on buildings they can't sell and can't lease.
It’s not just employees who previously worked in the office. We’ve expanded our recruiting to include employees many states away. There is no “return to the office” for them.
“they failed to take into account unintended consequences.”
If it wasn’t intended then I am sure they view it as a bonus.
The commercial real estate problem was aided by the Federal Reserve’s money printing/low interest rates and now Federal Reserve high interest rates together with conditions that began with the Covid lock downs, conditions that are still persisting (remote work).
In reality, even without Covid I think the commercial real estate industry over built for a decade, betting, in grave error, the Fed’s easy money policies would go on forever.
I try to show humility in my professional dealings, but on this one I’ve become so vindictive and arrogant that I find myself occasionally saying something along these lines: “That’s why I warned you THREE YEARS AGO that sending your staff to work from home wasn’t a good idea, you moron.”
Homeless shelters for all of our new “immigrants”.
So if I default on my obligations, it’s because of fictional weather analogies?
Looks like “flattening the curve” was the match that lit the flattening of the commercial real estate market. Kind of ironic really that a NYC real estate tycoon struck the match.
You can bet most of the real estate developers left holding the bag gave a lot of big donations to the Democraps.
If the World Trade Center had been made of reinforced concrete it would have fared far better.
Welcome back, President Trump.
“Surging interest rates and the rise of remote work have combined to create a nightmare scenario for commercial real estate investors.”
They should have better managed their risk.
they failed to take into account unintended consequences.“
Because they didn’t care. One thing and one thing only mattered. Getting rid of Trump by whatever means necessary
Companies are locked into loans on buildings they can’t sell and can’t lease.
Further up the food chain are the companies who bought debts, loans and paper. [And I think those are the ones who are most worried] They bought instruments at near zero rates now have to pay upwards of 5%.
So they are losing their asses. Think 2008...again.
Commercial real estate, particularly class-a office type is getting smashed.
One major problem is income property is valued, most often soley, on income. It also often needs to be refi’d after short term loans and balloons come due.
Owners will be forced to try to refi devalued property at much harsher terms and higher rates, which mostly won’t happen... even if anyone - banks or owners - wanted it to.
Most will just walk, which is happening now, with office *and retail.
We are ruled by a single monoculture of overprivileged, leftist idiots who cannot understand the consequences of their beliefs, actions, and behavior. I guarantee you that most of the executives of corporations pushed for Biden’s lockdowns and now they get to pay the price for their stupidity and viciousness. I hope they burn.
The big investors took the risk of making figurative hay while the Fed shined — and now are getting caught out in their fields, unhedged, if you will.
Yawn.
This was a Pizza Hut, now it’s all covered in daisies.
In NYC they converted many old factory buildings into loft apartments. I could see them doing that with some office buildings.
Perhaps convert half the building and keep the other half office. Give people a short commute.
Since the invention of the combustion engine and the automobile, building dense cities with vertical buildings has made less sense with each passing decade.
There are entire industries that could never operate in a city, from clear examples such as agronomy and mining, to less obvious ones such as logistics.
Manufacturing, starting more than a century ago, has increasingly required high-ceiling single story buildings spread out over acres.
Stadiums and arenas for entertainment have moved out of many cities decades ago.
Much of advanced education had already moved to isolated campuses. While large towns have sprung up around them, they tend to be one-industry towns. Remote learning may accelerate the trend for schools to move.
Healthcare might be the last industry holding on in dense areas, although as it worsens, people are more likely to travel for non-emergency treatment.
House homeless there.