patrick.net
An Antidote to Corporate Media
1,193,311 comments by 13,877 users - PeopleUnited, Someone_else online now
The coming collapse of commercial real estate
invite response
2023 Jun 26, 5:29pm 261 views 1 comment
Comments 1 - 1 of 1 Search these comments
1
UkraineIsTotallyFucked
2023 Jun 26, 6:50pm
UkraineIsTotallyFucked
2023 Jun 26, 6:50pm
Cities impacted will have to engage in some aggressive rezoning and redevelopment incentives to convert these buildings into apartments and condos/coops pronto. And do it fast.
With a few exceptions, they won't. Just like they haven't for all the abandoned malls out there.
With a few exceptions, they won't. Just like they haven't for all the abandoned malls out there.
Excerpted from the article by Andrea Widburg The American Thinker
... commercial real estate is empty. Small businesses don’t renew their leases, and large businesses simply forfeit them. Building owners are walking away from mortgages, leaving their empty office towers to the banks, which cannot possibly find tenants for them. The result is that we are looking at a coming commercial real estate collapse that could make 2008’s home real estate recession look like a cheery block party:
Commercial real estate has become a debt timebomb, experts have warned, as office towers remain empty in once-bustling cities.
The new era of remote work means ‘zombie’ workspaces remain vacant - while higher interest rates make it more expensive to buy or refinance buildings.
Some $1.5trillion in real estate mortgages are due this year and next, bringing the market to a dangerous precipice. When the deadline arrives, experts warn owners may be forced to default instead of borrowing again to cover the bill.
Earlier this month, the landlords of downtown San Francisco’s Westfield mall stopped making mortgage payments on its $558million loan amid rising crime and tanking sales.
Meanwhile in New York, building owners are being forced to negotiate extensions on millions of dollars of debt after failing to secure financing.
According to building security company Kastle Systems, only about half of office workers in the Big Apple are back at their desks.
And a joint study from researchers at New York University and Columbia University found that offices in the city will lose 44 percent of their pre-pandemic value by 2029 because of the impact of remote work.
Across the country, values for offices have decreased by 27 percent since March 2022, according to data analytics company Green Street.
In 2008, with the home real estate collapse, the American economy still had some resilience. This time around, it does not, and the damage done to the financial system, when it starts radiating out to the employment sector, could be devastating. I have no advice whatsoever for how to weather the coming storm. It’s like watching a massive tornado heading your way and knowing that your storm cellar has already flooded. There’s no way out.
For the full article: https://www.americanthinker.com/blog/2023/06/the_coming_collapse_of_commercial_real_estate.html