Current Events > Supposedly 'Financial System' edge of collapse again due to comm real estate

(+) Yeah! (+)

The real reason remote work is getting hate I suppose.

The financial system has been on the edge for like two decades.

Fucking convert it to housing and other uses instead of whining about not enough wage slaves in cubicles.

Unsuprised_Pika posted...

Fucking convert it to housing and other uses instead of whining about not enough wage slaves in cubicles.

About $1.5 trillion in commercial mortgage debt is due by the end of 2025, but steeper borrowing costs, coupled with tighter credit conditions and a decline in property values brought on by remote work, have increased the risk of default.

Might help but wouldn't really solve the supposes issue

Unsuprised_Pika posted...

Fucking convert it to housing and other uses instead of whining about not enough wage slaves in cubicles.

Oh no, we can't have that. It would make sense and help people. That's not the way things work.

The "back to the office" movement was always tied to two things. Companies were locked into expensive leases on their office space and that without said leases companies that own said office buildings are stuck with properties that have no use.

Boo hoo. Let if fail. For the most part offices are obsolete, too bad, so sad, your investment isn't immune to market forces.

ScazarMeltex posted...

The "back to the office" movement was always tied to two things. Companies were locked into expensive leases on their office space and that without said leases companies that own said office buildings are stuck with properties that have no use.

Boo hoo. Let if fail. For the most part offices are obsolete, too bad, so sad, your investment isn't immune to market forces.

You shouldnt expect those companies to accept this reality without kicking and screaming.

But that means they are now open to competition. Some of the biggest companies you know that you thought would probably exist forever are now vulnerable if they are trying to claw onto using offices when a new company does as much as possible remotely. They have fewer expenses and people will want to work for them more.

ScazarMeltex posted...

The "back to the office" movement was always tied to two things. Companies were locked into expensive leases on their office space and that without said leases companies that own said office buildings are stuck with properties that have no use.

Boo hoo. Let if fail. For the most part offices are obsolete, too bad, so sad, your investment isn't immune to market forces.

Yeah, until they get a few politicians in their pockets and get them to rezone the area for residential properties, so you all can bitch that they created luxury apartments that "no one" can afford despite them all selling out in a week.

WingsOfGood posted...

Might help but wouldn't really solve the supposes issue

The amount of office space that can practically and legally be turned into housing is trivial compared to the problem. The few buildings that can be converted take years of extensive reconstruction to convert.

The biggest problem is daylight. Every building code in the country requires bedrooms to have at least one window for natural light and many require the same for other parts of the apartment. To use the Empire State Building as an example and a generous 40 feet as the practical depth of an apartment, only a bit less than half of the floor space along the outside walls could be used for housing. That's why buildings designed for residential use are narrower than commercial office space: they simply need a larger surface to volume ratio.

willythemailboy posted...

The amount of office space that can practically and legally be turned into housing is trivial compared to the problem. The few buildings that can be converted take years of extensive reconstruction to convert.

The biggest problem is daylight. Every building code in the country requires bedrooms to have at least one window for natural light and many require the same for other parts of the apartment. To use the Empire State Building as an example and a generous 40 feet as the practical depth of an apartment, only a bit less than half of the floor space along the outside walls could be used for housing. That's why buildings designed for residential use are narrower than commercial office space: they simply need a larger surface to volume ratio.

Is the solution then to tear down a bunch of office buildings and build apartments in their place?

Unsuprised_Pika posted...

Fucking convert it to housing and other uses instead of whining about not enough wage slaves in cubicles.

It's illegal to in many places due to safety regulations, zoning, etc.

Some cities have been working on easing those restrictions, but not enough.

Edit: Looks like someone beat me to this

UnsteadyOwl posted...

Is the solution then to tear down a bunch of office buildings and build apartments in their place?

Solution is to remove or significantly reduce those restrictions.

UnsteadyOwl posted...

Is the solution then to tear down a bunch of office buildings and build apartments in their place?

Considering the scope of retrofit would more or less necessitate this, yeah. But what would actually happen in that scenario is the construction of million dollar condos that won't house the people that need housing.

willythemailboy posted...

The amount of office space that can practically and legally be turned into housing is trivial compared to the problem. The few buildings that can be converted take years of extensive reconstruction to convert.

The biggest problem is daylight. Every building code in the country requires bedrooms to have at least one window for natural light and many require the same for other parts of the apartment. To use the Empire State Building as an example and a generous 40 feet as the practical depth of an apartment, only a bit less than half of the floor space along the outside walls could be used for housing. That's why buildings designed for residential use are narrower than commercial office space: they simply need a larger surface to volume ratio.

Biggest problem is plumbing, actually. There's no good way to get plumbing to every unit with the way commercial buildings are designed.

They're redesigning a building in my downtown area from commercial to residential, but they're having to do communal bathrooms/showers because there's just no cost effective way to plumb every unit. I doubt people would choose a building where they don't have access to their own bathroom unless it's REALLLY cheap.

ScazarMeltex posted...

The "back to the office" movement was always tied to two things. Companies were locked into expensive leases on their office space and that without said leases companies that own said office buildings are stuck with properties that have no use.

Boo hoo. Let if fail. For the most part offices are obsolete, too bad, so sad, your investment isn't immune to market forces.

Companies also borrow against their property value as collateral for loans, but when those values plummet it can change the terms of the loan afaik.

Nunyobidness posted...

Oh no, we can't have that. It would make sense and help people. That's not the way things work.

You actually can't just "convert it to housing" because of America's fucked up zoning laws. Doing this is something that needs a time scale far longer than 2025.

Thankfully my only REIT investments are in industrial sector but everyone has been saying to bail out on commercial if you can.

ScazarMeltex posted...

The "back to the office" movement was always tied to two things. Companies were locked into expensive leases on their office space and that without said leases companies that own said office buildings are stuck with properties that have no use.

Boo hoo. Let if fail. For the most part offices are obsolete, too bad, so sad, your investment isn't immune to market forces.

It's funny how many times I've seen people on here argue the exact opposite, & that we should feel sorry for multinational corporations maintaining & leasing buildings because we all love driving 30 minutes in our cages to be in a building where studies show the majority of people are miserable. Local businesses will still thrive given people won't stop eating or buying goods, it's the office focus & need to control people's time while not paying them for the unpaid labor that is transportation that's the problem

UnsteadyOwl posted...

Is the solution then to tear down a bunch of office buildings and build apartments in their place?

Sure, if you don't mind 5-10 years before any housing is available.

Unknown5uspect posted...

Considering the scope of retrofit would more or less necessitate this, yeah. But what would actually happen in that scenario is the construction of million dollar condos that won't house the people that need housing.

If there wasn't a demand, people wouldn't be building them.

About the only way to get 100% affordable housing built would be to have the local equivalents to the NYC Housing Authority build the housing itself. The problem with that is the NYCHA is notorious as being the worst slumlord in the city and takes on average 8 months to turn over an apartment from one person moving out to the next moving in.

Let it collapse

I suppose it's the time of year where the economists whine about corporate rent again, yes