Commercial Real Estate Meltdown?

The next big potential risk to the U.S. economy may be lurking in office buildings across the country's downtown districts.

With many people still working from home, companies are cutting back on office space which threatens to unleash even more headwinds for the U.S. economy.

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[davidanon]

Let's see, drive into the city, spend 3.5 hours in traffic, pay all the tolls, wear out your car in an era when cars are more expensive then ever, pay for parking, or spend hours on the trains and subways ? Nah ! Screw that, it's not in my interest, there's nothing in it for us. The commercial landlord's and city government's problems are, well, their problems.

[uydagcusdgfughfgsfggsifg]

I just recently had my business’ lease up for renewal, and the landlord legit tried to act like we were going to increase our rent 🤣🤣🤣 told her we were going down by what equates to ~30% per sqft or else we were moving to the better building across the street for less, and they just had to take it. So happy to see this happen, commercial landlords deserve everything they’re getting

[Shredderbox]

During the good times they expect to be allowed to make as much money as possible, and to have nobody stop them. In bad times the banks immediately turn around and start begging for handouts.

[psychickumquat]

After experiencing work at home, who in their right mind would want to go back to working in the city? Getting up at 5 am just so you can sit in 90 minutes of bumper to bumper traffic or alternativelty take a bus ride that smells like stale booze and depression... walk half a mile to the office wondering if you're going to get mugged... Sit in a bland cubicle in a stuffy freezing builsing for 8 hours... then do it all over again 5 times a week. No way.

[Riiyan]

The problem is the way they adjust market rates, it's a controlled game. I know these particular shops that haven't been occupied in the past 10 years, they just going to waste because the owner claims his 3x rent is justified because they built up houses around his area. He's entitled to do anything with his property, if you want to have not a single person occupy your buildings because you think you have gold that's on you. But where it becomes a problem when everyone starts thinking and acting that way. Most of the real estate in this country isn't worth the value people think it is, everyone just keeps raising their prices because the next person does and now that's where it starts to become a problem. It's all artificial and everyone thinks they have gold.

[TheArtunism]

I am in my own house, eating my own food, using my own bathroom, hanging out with my pets, sitting on my personally adjusted chair, with my own art instead of a cubicle, with a 5 minute commute using no gas, no fish in the microwave, I can take a break and work out, and I get to wear shorts to work. Why would I give that up?

[KD_cycling]

I'm an industrial rope access worker in Australia and I can tell you first hand that there's a ton of empty floors on the buildings I abseil down. I'm definitely worried about a slowdown in the construction sector but I stand with my fellow workers and applaud them for taking back some control over their working lives

[TooLateForIeago]

Who knew that people leveraging technology to be happier would be a problem? Edit: I mean, this is kind of what we were promised. Remember all the marketing material a few years back showing an office working at the beach?

[seeky]

Years ago I was considering being a commercial real estate agent. I’m glad I didn’t go down that road.

[BIGGOODBOY]

This channel gives me hope. No clickbait, no fast short ADD material and cuts of fast speaking like a used car salesman. Patrick a legend. Even speaks Spanish

[RupertMDoc]

I see this in Washington DC. My company has a small office downtown a few blocks from the white house, and half the units in the building remain unrented. People who use to go into our office have fled to cities with cheaper costs of living where my company still has offices or have left to get entirely remote jobs.

[asdasdasdasd]

I've been saying this since the start of the pandemic. Workers now days have the option to work remotely, and the pandemic offered an opportunity for employers to capatilize on this. Lessees are running out their contracts and then downsizing in office space. I work in commercial AC and I work on buildings where half the floors are nothing but vacant tenancies with "We have moved" signs on them.

[bilbobeutlin]

The "Work from home" movement has had a way bigger impact on our everyday life and the economy than most economists are willing to admit.
"Going back to normal" just happens at JP Morgan, nowhere else.

[TheNaldiin]

Dear landlords who always swear the market has spoken, it is telling you something very loudly.

[kenyang]

Even for offices that are occupied, they are very much empty as many companies only require their employees to return to office only 2 or 3 days per week.

[IvyroseGullwhacker]

I love my hybrid work schedule and think many others love hybrid/remote work too. I hope this is a permanent change! People cannot afford to live where they work, so we have taken back the power by choosing to work where we live.

[Sofus.]

There is a housing crisis and a commercial real estate crisis. Oh well don't see how we could handle those problems.

[NotBen]

I think wfh was inevitable. The tech was there pre pandemic and offices weren’t doing great back then. Although office property owners going bankrupt isn’t going to cause a contagion, I think the problem is losing smaller businesses that are close to offices. Laundromats and “happy hour bars” employ tons of people collectively. Also, losing the regional banks concentrates the sector into a few too big to fail banks.

[tedtan]

While on a trip to Toronto, I was in 38 th floor overlooking the cityscape with a view towards CN tower. I panned the view from left to right onto the Tower cranes atop the buildings. There was a day, no movement was seen on those cranes! Obviously, construction ceased.

[djpuplex]

And yet in the US we are told there is a residential real estate deficit. Wonder if there's a solution?