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re: The actual upcoming real estate crisis. CRE loans and vacant office buildings
Posted on 9/26/23 at 9:46 pm to stout
Posted on 9/26/23 at 9:46 pm to stout
Are those stats on investment commercial real estate, owner-occupied commercial real estate, or both.
Would be interested in seeing what percentage is IRE as it is a lot riskier.
Would be interested in seeing what percentage is IRE as it is a lot riskier.
0
Posted on 9/26/23 at 9:47 pm to stout
quote:agreed, purely anecdotal but the office complex I’m in has only increased in occupancy with the downsizing of corporations from CBD and corporate HQ. There’s more satellite and “team” offices coming in for the enterprise folks.
Yea not being able to find a small office to rent for a few thousand dollars for her small business isn't necessarily what this is about. A lot of this has to do with large corporations that usually rent multiple floors but are instead reducing their office footprint through WFH. I am not saying small offices aren't part of it but it's not the major issue.
Posted on 9/26/23 at 10:20 pm to scrooster
quote:
2008 was Fannie Mae, Freddie Mac, Nancy Pelosi, Harry Reid induced. That's why it was nationwide.
The line for those responsible for the 2008 collapse is imminently longer than those listed above and the democrats didn’t hold a monopoly. Wall Street investment bankers, rating agency’s, hedge funds, SEC, congress and the list goes on and on.
Posted on 9/27/23 at 6:22 am to stout
How many of these loans are on dilapidated structures past the point of repair?
San Francisco has the same issue as Baton Rouge. Commercial real estate is built but never maintained. Many of the loans are on buildings that may never have occupants again.
The shady guys that I know from growing up all drifted into forex and crypto recently. Evidently our economy is only chugging along because we are converting narco money into crypto and laundering it through online shopping.
San Francisco has the same issue as Baton Rouge. Commercial real estate is built but never maintained. Many of the loans are on buildings that may never have occupants again.
The shady guys that I know from growing up all drifted into forex and crypto recently. Evidently our economy is only chugging along because we are converting narco money into crypto and laundering it through online shopping.
Posted on 9/27/23 at 6:35 am to stout
My Question is with all the commerical real estate issues when will they start converting this space over to residental? I drive by a commerical zoned area here in jax daily with a bunch of empty commerical building but on some beautiful property with oaks, lakes etc.. Surely some developer can see the value of bulding some expensive homes over these spaces? or would it cost to much to remove these buildings, parking lots etc..?
Posted on 9/27/23 at 6:40 am to FLObserver
quote:based on the one time ROI that you describe, your answer is yes.
would it cost to much to remove these buildings, parking lots etc.
Also, many people don't realize how expensive it can get to demo a building followed by waste haul off and landfill Construction Debris costs.
Before that, you need demo permits and inspections. If you have asbestos to deal with, enjoy all that additional costs.
This post was edited on 9/27/23 at 6:41 am
Posted on 9/27/23 at 6:43 am to Rouge
It's ashame because some beautiful properties just sitting there with empty buildings but a great place to ride a bike or jog. 
Posted on 9/27/23 at 6:46 am to FLObserver
Don't fret
That property's "lack of use" is being utilized as a write off or a tax shelter.
That property's "lack of use" is being utilized as a write off or a tax shelter.
Posted on 9/27/23 at 7:04 am to Ric Flair
quote:
So who gets hit the hardest from the fallout? REIT’s, banks, hedge funds, pensions?
Banks for sure. They have to worry about asset cash flow ability and retaining deposits.
When my parents pulled deposits from the local bank and moved that money to short term treasuries, I realized there was a problem.
The banks can’t keep pace with real world interest rates.
Posted on 9/27/23 at 12:56 pm to dandyjohn
quote:
clean up the mistakes of idiot bankers.
Bankers and whoever the bigwigs were at the companies who decided they needed prime real estate in certain marketplaces for their field.
SF is/was one of the highest sqft costs for any market in the US for commercial real estate, predicated on the idea that those jobs were NOT capable of being performed elsewhere or that they were in servicing people who were working those jobs.
WFH combined with city and state leadership turning SF into a third world country have it to where certain areas are already being defaulted from borrowers back to the lender because the property they are paying on is not worth the borrowed value BECAUSE the city won’t handle homeless people or crime.
For instance, convention travel to SF is supposed to be down majorly because the quality of life being in the area is crap compared to other places where conventions could be held.
Bankers lending on these properties were stupid but corporate leadership in a lot of these companies thinking they NEEDED office space in some of the highest priced and most crowded markets in the US are just as at fault.
Posted on 9/27/23 at 2:23 pm to Kingpenm3
quote:
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.
It can sit vacant and somewhat retain its value on an as stabilized basis. You start reducing rents your cap rate increases and property loses value.
Posted on 9/28/23 at 6:24 am to XenScott
quote:
Amazing that my wife can't find another office space in Pensacola.
Pensacola isn’t the booming metropolis you think it is.
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