Buckle up buckoos, bank bailouts ahead. Also check your investment portfolios for CMBS, they might be going down/
James Howard Kunstler has been writing about The Long Emergency for years, the deterioration of the credit backed growth economy that finances the creation and production of stuff, but not the long term maintenance of that stuff. Then the stuff breaks down over time and there is not enough wealth left to fix it; systemic deterioration occurs.
What PGIM analysts have called “the great reset” of values is likely to be agonizingly slow. It took six years for US office prices to recover after the 2008 financial crisis, even though that episode was centered on residential real estate. “This time we think it’ll take 10 years,” says Richard Barkham, global chief economist for CBRE Group Inc.
Reminder that the Federal Reserve has yet to sell the toxic waste they bought via quantitative easing during the 2008 financial crisis. Ten years is fucking optimistic to the point of naivete.
A combination of a lot of the jobs these offices were meant to cater to being increasingly redundant and spiking crime rates in cities has become a pin to this enormous bubble.
Unless you can remodel these spaces to serve another purpose like maybe high tech manufacturing or hydroponics, the West is starting to import China's ghost cities.
One word stood out to me as I read the article: boomtown. Tech jobs were the new gold rush as tech bros poured into the cities to strike it rich. Now, interest rates are high, the rush is over, and cities are turning into Detroit as nothing is keeping people there.
The jobs are also moving to new locations. Austin and Miami have both been seeing a ton of growth in the Tech sector as of late. But unlike Silicon Valley, most of these companies are striving to be practical and actually make money, so it is less of a boom situation.
Will be interesting to see what happens as Silicon Valley continues to fall apart though.
Dan from Lotus Eaters raised this point as not as easy at it sounds.
Turning a commercial building into residential apartments is basically impossible as it requires a total internal fit out. It will probably be cheaper to demolish and rebuild if you wanted too.
Maybe if the price of commercial real estate crashed, but if that happened the overall economy would most likely be affected so who knows what the costs would be. Spoiler, they reckon about 3% of NY's commercial office space would be good candidates for conversion.
"Apartments" yes, needing a redesign. "Barracks" not so much.
Set a keycard or passcode on the elevator and stairwell. A washroom or four per floor that houses a half-dozen toilets each? Take the toilet plumbing pipes for one or two stalls and turn them into a shower set. Done. Toss some mattresses in there and you've got solid living conditions.
It doesn't seem to be all that difficult, at least with older (pre-1960s) office buildings...
Australia is littered with buildings like that which have been converted, and, off the top of my head, I can think of a number of former medical office -> apartment conversions I have seen...
Sure, the scale is larger, but it's clearly not all that difficult...
Or, as others point out, "hostel" style conversions with shared facilities... There's a heap of those around, too.
Note the example they use is reality TV show. And most converted commercial spaces are ugly as fuck as they have to use what they have and call it "urban" or "avant garde" which is just code for shit.
What PGIM analysts have called “the great reset” of values is likely to be agonizingly slow.
Look at these fuckers trying to astroturf that "the great reset" is just a term for a retail real estate price correction, so oblivious normies think "well that's not a big deal" when people start talking about the "great reset" that is the destruction of human access to and expectations of liberty, self-actualization, and happiness.
It is a big problem. When I lived in Seattle I often wondered who the giant buildings were for. It didn't seem like enough people were moving into them to meet costs. Then I heard rumors that keeping the homeless out was becoming a really big problem.
I am seeing the same with Orlando. A lot of companies want to build giant buildings and expand their Urban growth empire, but no one seems to want this. Even when told directly, the architects, Industrial designers, and others ignore that and will tell me how wrong I am. At no point do they see the staggering growth of places like Phoenix, and think something must be happening. Instead, its 15 minute cities, and better organized urban designs.
Buckle up buckoos, bank bailouts ahead. Also check your investment portfolios for CMBS, they might be going down/
James Howard Kunstler has been writing about The Long Emergency for years, the deterioration of the credit backed growth economy that finances the creation and production of stuff, but not the long term maintenance of that stuff. Then the stuff breaks down over time and there is not enough wealth left to fix it; systemic deterioration occurs.
Reminder that the Federal Reserve has yet to sell the toxic waste they bought via quantitative easing during the 2008 financial crisis. Ten years is fucking optimistic to the point of naivete.
Well, if they do successfully manage to trigger hyperinflation, all of that debt becomes effectively worthless along with the dollar.
There's no reason to navigate a horde of cracked out zombies and dodge diarrhea piles on the sidewalk when your job is sending emails.
A combination of a lot of the jobs these offices were meant to cater to being increasingly redundant and spiking crime rates in cities has become a pin to this enormous bubble.
Unless you can remodel these spaces to serve another purpose like maybe high tech manufacturing or hydroponics, the West is starting to import China's ghost cities.
One word stood out to me as I read the article: boomtown. Tech jobs were the new gold rush as tech bros poured into the cities to strike it rich. Now, interest rates are high, the rush is over, and cities are turning into Detroit as nothing is keeping people there.
The jobs are also moving to new locations. Austin and Miami have both been seeing a ton of growth in the Tech sector as of late. But unlike Silicon Valley, most of these companies are striving to be practical and actually make money, so it is less of a boom situation.
Will be interesting to see what happens as Silicon Valley continues to fall apart though.
fake and gay economy exists in a state of perpetual collapse
Let's hope they convert them to residential housing to keep all the migrants and leftists from spilling out into the countryside.
That’s a good idea. All of SF’s fentanyl tourists need housing too…
Dan from Lotus Eaters raised this point as not as easy at it sounds.
Turning a commercial building into residential apartments is basically impossible as it requires a total internal fit out. It will probably be cheaper to demolish and rebuild if you wanted too.
Edit: Someone did a basic calculation of the numbers and it's not great: https://cre.moodysanalytics.com/insights/cre-trends/office-to-apartment-conversions/
Maybe if the price of commercial real estate crashed, but if that happened the overall economy would most likely be affected so who knows what the costs would be. Spoiler, they reckon about 3% of NY's commercial office space would be good candidates for conversion.
"Apartments" yes, needing a redesign. "Barracks" not so much.
Set a keycard or passcode on the elevator and stairwell. A washroom or four per floor that houses a half-dozen toilets each? Take the toilet plumbing pipes for one or two stalls and turn them into a shower set. Done. Toss some mattresses in there and you've got solid living conditions.
That's such a completely terrible idea that progressive cities might do it. They can put all the childless single cat ladies in there.
nah you really don't. there's no reason they have to be GOOD apartments. they can be like some kind of massive boarding house.
You have to completely remodel every single utility as well as the internal space. Even before adding internal apartment walls etc.
Go into a large commercial space and just imagine how you'd turn it into a series of houses. It just cannot be done economically.
like i said, they don't have to be good. think mass shelter in a school gym.
It doesn't seem to be all that difficult, at least with older (pre-1960s) office buildings...
Australia is littered with buildings like that which have been converted, and, off the top of my head, I can think of a number of former medical office -> apartment conversions I have seen...
Sure, the scale is larger, but it's clearly not all that difficult...
Or, as others point out, "hostel" style conversions with shared facilities... There's a heap of those around, too.
How many older, pre 1960 office buildings are there in the middle of cities though?
https://www.commercialrealestate.com.au/advice/converting-commercial-buildings-into-residential-819336/
Note the example they use is reality TV show. And most converted commercial spaces are ugly as fuck as they have to use what they have and call it "urban" or "avant garde" which is just code for shit.
Would be terrible is those buildings just happen to collapse and kill everyone inside after being filled up, just terrible....
Look at these fuckers trying to astroturf that "the great reset" is just a term for a retail real estate price correction, so oblivious normies think "well that's not a big deal" when people start talking about the "great reset" that is the destruction of human access to and expectations of liberty, self-actualization, and happiness.
It is a big problem. When I lived in Seattle I often wondered who the giant buildings were for. It didn't seem like enough people were moving into them to meet costs. Then I heard rumors that keeping the homeless out was becoming a really big problem.
I am seeing the same with Orlando. A lot of companies want to build giant buildings and expand their Urban growth empire, but no one seems to want this. Even when told directly, the architects, Industrial designers, and others ignore that and will tell me how wrong I am. At no point do they see the staggering growth of places like Phoenix, and think something must be happening. Instead, its 15 minute cities, and better organized urban designs.