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Started By
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re: A debt 'time bomb' looms for New Orleans' downtown office market
Posted on 3/21/24 at 9:27 am to tigerterrace
Posted on 3/21/24 at 9:27 am to tigerterrace
quote:
Some of these will be flipped to apartments. Homeless Shelters and places for illegals.
Have you ever been to New Orleans?
There is abandoned (now) blighted property everywhere that is allowed to sit and rot instead of flipping into anything else. What makes you think these buildings will be treated differently?
Posted on 3/21/24 at 9:36 am to SlowFlowPro
quote:
This is one of those scenarios where deflation is ultimately necessary, but the initial pain will hurt severely due to the debt relied upon.
Deflation is when there's low demand but high supply, this usually occurs because of rising unemployment causing consumers to purchase fewer items. The economic scenario we're in now has consumers trying to fight inflation by tapping their savings while also charging historic highs to credit cards (which have historically high interest rates). Real wages are sluggish and more and more consumers are going into delinquency (including 90+ days, which is usually a default).
All of this is to say that for enough deflation to happen to help those businesses, it would mean the economy is already in a massive shitter to the point where it may harm the business' ability to pay. In other words, the cure may do more damage than the disease.
Posted on 3/21/24 at 9:39 am to TigerBlood17
quote:
Most Lenders do a 5-year ballon note for commercial real estate, essentially requiring them to refinance every 5 years.
“I think it is called a balloon payment because the money was going to fall into his lap from a hot air balloon because he sure as frick didn’t have it.”
Posted on 3/21/24 at 9:51 am to Bard
quote:
The economic scenario we're in now has consumers trying to fight inflation by tapping their savings while also charging historic highs to credit cards
This is causing
quote:
Deflation is when there's low demand
That's the inter-relation between inflation and deflation. CRE is too expensive and demand is decreasing. Prices need to decrease due to these market forces, but the issue is the debtload won't allow that easily.
quote:
All of this is to say that for enough deflation to happen to help those businesses, it would mean the economy is already in a massive shitter to the point where it may harm the business' ability to pay. In other words, the cure may do more damage than the disease.
The other option is publicly-financed inflation via class-specific protectionism.
Posted on 3/21/24 at 9:53 am to WPBTiger
quote:
The owner, Los Angeles-based Hertz Investment Group, said it is currently in talks with the lender to avoid foreclosure.
Same company that the city of Lake Charles sued a couple years ago because of the abandoned building downtown.
Posted on 3/21/24 at 10:36 am to rltiger
quote:
Client's aren't hiring a law firm that has a shite office.
Perception matters.
Not to me. Material things don't impress me. I've hired 3 lawyers in my life. The most expensive with the fanciest office is the one that accomplished nothing for me. Judging by his work, he spent 15 minutes on my case. The 2 with moderate offices and a single secretary did what I needed quickly. One even did excellent follow up work years later for free.
If I was looking at a huge lawsuit or serious criminal case, then maybe I'd go with the expensive lawyer. For most things, though, you will just be wasting money.
As for New Orleans, we just need to stop burning money and let the city die. Unless you clean out the ferals, it won't improve.
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