Posted on 02/28/2024 8:56:00 PM PST by SeekAndFind
Canadian pension funds have been among the world’s most prolific buyers of real estate, starting a revolution that inspired retirement plans around the globe to emulate them. Now the largest of them is taking steps to limit its exposure to the most-beleaguered property type — office buildings.
Canada Pension Plan Investment Board has done three deals at discounted prices, selling its interests in a pair of Vancouver towers, a business park in Southern California and a redevelopment project in Manhattan, with the New York stake offloaded for the eyebrow-raising price of just $1. The worry is those deals may set an example for other major investors seeking a way out of the turmoil too.
“It’s the opposite of a vote of confidence for office,” said John Kim, an analyst tracking real estate companies for BMO Capital Markets. “My question is, who could be next?”
Anxiety over office buildings has swept the financial world as the persistence of both remote work and higher borrowing costs undercuts the economic fundamentals that made the properties good investments in the first place. A wave of banks from New York to Tokyo recently conceded that loans they made against offices may never be fully repaid, sending their share prices plunging and prompting fears of a broader credit crunch.
But the real test will be what price office buildings actually trade for, and there have been precious few examples since interest rates started rising. That’s why industry-watchers see discounted deals like CPPIB’s as an ominous sign for the market.
(Excerpt) Read more at fortune.com ...
If this happens a few more times it will really hurt NYC real Estate
I love a happy ending
Good as New York City deserves and demands to be bankrupt!
The expression he is struggling to remember is "vote of NO CONFIDENCE."
Regards,
Markets tend to be a pendulum. Movement changes direction and swings too far in that direction. The key to such investment is to determine how far is too far and start doing the opposite. We appear to now have an event with the possibility to extend the movement in a further negative direction. I think NYC and possibly all of NY commercial real estate will be severely damaged for years. I wonder if AG James has caused exactly what she charged Trump with for other commercial real estate owners. Building values drastically decline, lenders are scared, owners will need to disclose those reduces for fear of AG James or shareholders coming after them and taxing authorities are going to be forced to lower valuations which mean lower tax revenue. The AG James recession has now hit NYC.
Some people look at empty office buildings and see economic decline. Others look at empty office buildings and see homes for illegal aliens.
Seattle bought an old, large motel awhile ago for a bunch of money. $60 million I think? Plan was to turn it into a place where the homeless (oops - I mean “un-housed”) could live.
Except the motel can’t handle that many meals (either no restaurant, or too small). And the homeless people should be able to have a kitchen like a “real” home.
Well, that is too expensive to do, so the motel sits empty. Paying $330,000 a month to keep heat on and pay the loan.
Sold to whom?
Are you suggesting an accidental result or an intentional ?
I had never considered the latter until I read your post. To intentionally crash the market for the profit of others would be truly diabolical.
I really don't think the stage actors in this story (James & crooked courts) are that smart. But the people that hold their strings probably are.
Hat tip to you for the best "what if" of the day.
Folks might want to reconsider the happy dance.
Use your noggin.
This won’t bode well for any of us.
Bingo cards everywhere are flashing...
I see a good set for a dystopian SciFi movie…
Same as the shitbirds saying you get what you vote for, while never addressing the 40% of people who didn’t vote for it.
Or the “you should move to a red state” crowd.
Because fleeing and never planting roots is so wonderfully American.
Demographics is destiny. We will be outnumbered, and there will be no place of solace.
I did not consider your idea of intentional crashing. Seeing how these people think I would not put that past them. Get Trump and damage the current building owners. Why? Ultra rich (lib supporters) scoop up the distressed properties? Reward their puppets, the politicians. Or Government take over for housing the illegals? Interesting point, we shall see.
That is a reasonable expectation except........ Mayor Adams is apparently purposely avoiding the action. He simply has not and is not commandeering the empty real estate to house the human flood.
He knows better.
Bottom line is that he is screwed regardless of what he does
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