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re: The actual upcoming real estate crisis. CRE loans and vacant office buildings
Posted on 9/26/23 at 9:36 am to Buryl
Posted on 9/26/23 at 9:36 am to Buryl
And now you have the real reason they want a return to the office. Workers who earned increased flexibility must sacrifice for the greater good to clean up the mistakes of idiot bankers.
Some things never change.
It was a Black Swan event, NO banker or person could have foreseen it. I have no love for the big banks but they did not cause Covid. Now the 2008 Crises- 100% on the banks and AIG et al.
Some things never change.
It was a Black Swan event, NO banker or person could have foreseen it. I have no love for the big banks but they did not cause Covid. Now the 2008 Crises- 100% on the banks and AIG et al.
1
Posted on 9/26/23 at 9:37 am to Paul Allen
quote:
I agree with you. This board is very negative now.
Sign of the times
Posted on 9/26/23 at 9:41 am to stout
Cities all over the world are becoming socialist shite holes. Funny you mention San Francisco. Crime, lawlessness and the homeless have convinced many SF businesses to either move, close, or stick with the work-from-home model.
Posted on 9/26/23 at 9:44 am to stout
From a macro perspective- the developed world is massively overbuilt per future demographic expectations. There is far too much inventory.
In the US, the small/ regional bank exposure on commercial real estate is going to implode. It’s just a matter of when. My money guy has been telling me this/ sending me data for 2 years now. It’s going to be just another joy we will get to experience because of State/Business financial recklessness.
In the US, the small/ regional bank exposure on commercial real estate is going to implode. It’s just a matter of when. My money guy has been telling me this/ sending me data for 2 years now. It’s going to be just another joy we will get to experience because of State/Business financial recklessness.
Posted on 9/26/23 at 9:49 am to Lsupimp
I attend a decent amount of pension fund trustee meetings. The investment consultants usually just mumble something about "re-purposing" this inventory for residential property. But, I would think that will take a lot of investment and time. And, it might work in a downtown setting. But, I don't see people living in a suburban office complex.
Posted on 9/26/23 at 9:53 am to Bunk Moreland
I had a conversation with a guy who walked me through just the plumbing challenges involved in a “ repurpose” from large commercial to residential units and I understand now why it makes sense to just bring out the wrecking ball.
Posted on 9/26/23 at 9:53 am to secfballfan
quote:
It was a Black Swan event, NO banker or person could have foreseen it. I have no love for the big banks but they did not cause Covid. Now the 2008 Crises- 100% on the banks and AIG et al.
Not only was it foreseeable, it was inevitable. And it isn't the job of taxpayers to cover businesses for not mitigating their risk. Failure is one of the most fundamental aspects of capitalism. We are quickly becoming a plutocracy.
Posted on 9/26/23 at 9:56 am to BluegrassBelle
quote:
Right now there’s IT groups with Humana they’re trying to push back into the office up to 3 days a week.
They had the audacity to say they weren’t productive from home and when asked for that data they couldn’t come up with it. Shortly after, they found out one of their higher ups was pushing for the return to justify a building they utilize.
Solution: everybody else has to work in office 3 days a week. Him? He has to be in office 6 days a week.
This post was edited on 9/26/23 at 9:57 am
Posted on 9/26/23 at 9:58 am to dandyjohn
quote:
And now you have the real reason they want a return to the office. Workers who earned increased flexibility must sacrifice for the greater good to clean up the mistakes of idiot bankers.
Can you elaborate on this? I don't see what you are saying makes a difference. If I actually go into the office, there is an actual higher cost to my employer for that. Slight, but higher. I'm not charged a fee to be there, so there is no revenue stream ... Employer doesn't pay for my Internet. What economic benefit does it make for your implication that it's about taking in for the team to bail out bankers. Unless I'm missing something
Posted on 9/26/23 at 10:01 am to stout
Most sheople are not aware-enough to grasp what the above means, especially when combined with the high rate of credit card default that is happening right now ... but it ain't good.
It's gonna be a long drawn-out mess correcting itself and .... well, I'm not sure it ever will. The country is in decline.
I hope I'm seeing some semblance of a swing back towards rational thought and frugality amongs some Millennials and even some Gen Z types but ... I dunno. I hope they wake up and see the light.
Commercial real estate tanking. Not just office space but retail space as well.
Credit Card defaults at record paces, all-time worst, and there are always repercussions that follow.
Residential home values are hanging-on but demand in half the country is down as people flee blue states and mortgage rates continue to climb.
Inflation absolutely through the roof especially with the big two ... food and energy.
I've seen it before, in the 70s and early 80s and, to a far lesser extent in 2008-2012 ... but this is gonna be a bad one. People are losing hard earned money, leaking it like a sieve.
It's gonna be a long drawn-out mess correcting itself and .... well, I'm not sure it ever will. The country is in decline.
I hope I'm seeing some semblance of a swing back towards rational thought and frugality amongs some Millennials and even some Gen Z types but ... I dunno. I hope they wake up and see the light.
Commercial real estate tanking. Not just office space but retail space as well.
Credit Card defaults at record paces, all-time worst, and there are always repercussions that follow.
Residential home values are hanging-on but demand in half the country is down as people flee blue states and mortgage rates continue to climb.
Inflation absolutely through the roof especially with the big two ... food and energy.
I've seen it before, in the 70s and early 80s and, to a far lesser extent in 2008-2012 ... but this is gonna be a bad one. People are losing hard earned money, leaking it like a sieve.
Posted on 9/26/23 at 10:19 am to stout
quote:
Commercial Real Estate (CRE)
Commercial Real Estate has always been a weird space to me. Seems like they are willing to sit vacant for years but still ask crazy high rent prices.
I wonder if this is generally true, but in my industry virtually every office was owned say 30 years ago. Now if you see a business for sale it is shocking if there is any real estate in the offer. Almost everyone is just leasing a spot in a strip mall now.
Posted on 9/26/23 at 10:20 am to stout
quote:I see you posting all these graphs daily, it obviously seems pretty dire, but what exactly does it mean?
The actual upcoming real estate crisis.
I'm assuming house prices crash, but when do you think we see the actual crash? I know it's just guessing, but are we thinking homes come down by 20%...more?
And then what does that do for interest rates? Not that I expect them get back to the 2.5% level I got in at 3 or so years ago, but I assume a crash is going to eventually make rates come down somewhat, right?
Posted on 9/26/23 at 10:39 am to ozktgr
quote:
The middle class is running out of money
That’s really the ultimate goal of Globalist financial policy. A global 3rd world society with haves and have nots. Much easier to manipulate.
Posted on 9/26/23 at 10:45 am to genuineLSUtiger
quote:I mean, both of the last 2 administrations have a hand in today's economic climate/high inflation.
That’s really the ultimate goal of Globalist financial policy. A global 3rd world society with haves and have nots. Much easier to manipulate.
Posted on 9/26/23 at 10:50 am to TexasTiger33
There's vacant office buildings all over Atlanta, yet they keep building more and more high rise commercial real estate. Head scratching to say the least.
Posted on 9/26/23 at 10:52 am to stout
WS Journal calls what we have now a “booming economy”???
Posted on 9/26/23 at 10:53 am to stout
Posted on 9/26/23 at 10:54 am to cypresstiger
quote:
WS Journal calls what we have now a “booming economy”???
So does this cluster of an administration. Major failure.
Posted on 9/26/23 at 10:55 am to stout
quote:
The fear is that as they all come due more and more buildings will go into default which will lead to more consolidation in the banking industry
CRE vacancies? Cool, we can solve the affordable housing crisis.
#positivevibes
Posted on 9/26/23 at 11:03 am to shel311
My guess is that any residential crash will be more localized then 2008 unless there is a systemic breakdown for the financial system and basically no bank will lend. You would see major corporate defaults and bankruptcies and tons of job loss for that to happen. No one should be rooting that on.
2008 was a nationwide crash, but there have been many other housing recessions that have tended to hurt some regions worse than others. 2008 also had the issue of a lot more inventory available, so the crash was deeper and more long lasting.
With the amount of migration going on these days, places in the sunbelt are less likely to see a major crash then somewhere like San Francisco or Chicago.
If there is a major crash/recession/depression, we would definitely see a lowering of interest rates. Trying to time that or predict where rates would end up would be a fools errand.
2008 was a nationwide crash, but there have been many other housing recessions that have tended to hurt some regions worse than others. 2008 also had the issue of a lot more inventory available, so the crash was deeper and more long lasting.
With the amount of migration going on these days, places in the sunbelt are less likely to see a major crash then somewhere like San Francisco or Chicago.
If there is a major crash/recession/depression, we would definitely see a lowering of interest rates. Trying to time that or predict where rates would end up would be a fools errand.
This post was edited on 9/26/23 at 11:48 am
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