Posted on 01/02/2024 8:05:20 AM PST by george76
Hundreds of loans on office buildings are about to come due at a very bad time..
Loans were taken out in time of low interest rates and are now hard to refinance..
Too many of the loans defaulting could trigger banking crisis and hurt economy
...
About $117 billion worth is expected to be due this year and needs to be repaid or refinanced,
...
A big chunk of it is at risk of defaulting and costing banks and developers huge sums, sending some into insolvency.
Owners of office space around the country took out their loans when interest rates were half what they are now, and may not be able to refinance them at higher ones.
...
One example is the Seagram building on Park Avenue in Manhattan, which was mortgaged at $760 million in 2012. The loan assumed the building would bring in $74 million in revenue a year, but the best it ever did was $69 million in 2018 - and only $27 million in 2022.
...
Commercial mortgages, unlike home loans, are almost always paid interest-only, leaving the original price to be paid at the end, or refinanced to start the process again.
...
Economists last month found 40 per cent of office loans on bank balance sheets were underwater - owing more than the property is worth.
Smaller regional banks who loaned the money to buy them could themselves be at risk if the loans default as they are not big enough to handle the losses.
Moody's Analytics estimates 224 of the 605 loans that will expire soon will be tough to repay or refinance because their owners have too much debt or the buildings aren't making them enough money.
(Excerpt) Read more at dailymail.co.uk ...
That's a *hell* of a lot of expensive...empty...office space.
Businessman said to the minister, “I need help! My warehouse burnt to the ground, my product is all gone, my customers are leaving, and I am losing everything!”
The minister told him, “You can find all the answers to your problems in the Bible.”
The guy asked, “Where should I start?”
The minister answered, “If you do not know where to look, just open the book and place your finger on the page, and start right there. Sooner or later you will find your answers.”
He opened the Bible to a spot, looked down, and found his answer staring him right in the face - “Chapter 11.”
“Pin money.” Front-hall-closet-top-shelf-cigar-box-money.
We send this much to Ukraine evey few weeks.
Quick! Tax something!!
Consequences for the Covid reaction. Let them go bankrupt.
A great time to reduce costs. Terminate any who won’t return to their assigned office space and don’t replace them. Every government employee needs “eyes on” supervision and working from home doesn’t do it. Our government payroll is bloated and must be reduced - including the Pentagon.
Start with 10% per year for 4 years.
Maybe those commercial landlords can get loans from Ukraine.
Loans? Aid, like the parts of Europe, other than just Ukraine, that have been getting from us for the last 70 or so years.
We all saw this coming.
With an amount that large, banks will be in trouble. Whicn means that many depositors will be in trouble.
Government will bail out the insured accounts, then be pressured to bail out the uninsured accounts.
More money printing. More inflation.
Bankruptcies that large won't solve anything. They'll just spread the pain.
Sounds like the President needs to declare a moratorium on those mortgage payments and then declare debt forgiveness for the debts.
The Seagram building is a famous Ludwig Mies van der Rohe building from the ‘50s. It is undoubtedly restricted from modifications as a landmark, and it likely is hard to remodel to suit current office space designs.
17 of 24 federal agencies use an estimated 25% or less of their headquarters’ office capacity.. The General Services Administration, which manages all federal buildings, was operating at 11%, as was the Department of Agriculture.
https://freerepublic.com/focus/f-news/4205318/posts
LOL
It ain’t 50%
Closer to just under 25%, like San Francisco...
My guess
I can see Manhattan cams and they look abysmal compared to pre CCP-19(2020)
I only visit NYC occasionally...and I’m usually in after morning rush and leave before evening rush...so I can only depend on the reports of others. Mark Simone is,however,very good so I suspect he has sources.
He opened the Bible to a spot, looked down, and found his answer staring him right in the face - “Chapter 11.”
= = =
Interesting.
I am curious (do I have the time) to check out what is in Chapter 11 of each book (some don’t have 11 chapters so that burden is lightened).
I’ll bet God has something applicable to say in each.
Sometimes focused and demanding, and sometimes humorous, in my experience.
Sounds like the President needs to declare a moratorium on those mortgage payments and then declare debt forgiveness for the debts.
= = =
Oh, are you angling for a Cabinet Post in the Biden Administration?
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