American offices are half-empty. That could be the next big risk for banks

Commercial buildings usually have a community bathroom. Think of what it would take to re pipe for each unit. Plus every bathroom, kitchen hood and dryer would need to exhaust to a termination cap on the exterior of the building. Anyways I’m
Sure it can be done but on some buildings it would be cost prohibitive
 
Perhaps for low priced units with lots of compromises. But plumbing, heating, cooling,... Would be a major cost driver alone, let alone sound proofing, and all the other issues. Does not sound easy not cheap as you make it out to be. Don't forget the building purchases alone make this a prohibitively expensive venture unless the current owners finance the conversions themselves.

TheDawn said:
Don't think it's that expensive. Commercial buildings get converted to condos and apartment buildings all the time. I have visited quite a few myself. These converted condos don't sell for millions of dollars a unit so the conversion costs wouldn't be that expensive otherwise the owners would go bankrupt and these conversions wouldn't be attempted at all. There shouldn't be many changes that need to take place except a few crucial building code adherence after all people are able to sleep in their offices and many offices have individual bathrooms and everything. Building experts/contractors/developers here are welcome to chime in to give your expert opinion. I stand ready to be corrected.
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zdreg said:
The cost of conversion can be prohibitive, particularly in newer buildings.
https://www.nytimes.com/interactive...5Eob5dpOx1q7XO9j-wwtBu0MjdprZK&smid=url-share
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Some thoughts come to mind:

1. Feel so sorry for that 1 bedroom apartment that has the living/dining room (most likely) sitting on the former shared bathroom with 6 toilets and urinals of the former office building of Philidelphia. Making a mental note of ever buying a conversion in the future to ask for a floorplan of the former office building before the conversion.

2. Cutting out a hole to convert windowless office spaces into "windowful" residential units is ingenious!! That architecture firm should win an award for that idea. It's a little awkward though to stare into your neighbour's bedrooms across the hole from your own unless you are renting the added penthouse units but hey at least you got a window. LOL But reading from the google reviews, the same architecture/development firm is also the property management of the converted building at 180 water street new york and they are horrible, rude, aggressive and unscrupulous. The building is beautiful and nice but they treat their tenants really badly especially when it comes to renewing leases. The building currently has 2.5 rating on google review. What a shame.

3. Now I know why I was always so depressed while working in those offices and I always felt so claustrophobic and suffocating when attending those confusing meetings. I never knew what they were talking about in those meetings and never knew what they were trying to accomplish unless it was for picking on me. Because they have no windows!! Can't believe the cubicles were located 72 feet from a window, THREE times the distance from that of a pre-war office building!! It's appalling how much the corporate world enslaves us even in the office design just to whip us to work more and more like machines and robots. So glad I got out of there. And now I know why I work better as a trader because I trade right beside a window!! No basement trading for me.

Wow reading this article has made me realize so many things. Great article, @zdreg! Thanks for posting.
 
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Holders of CRE loans will get crucified, as will office REITs.
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They are definitely getting crucified right now. And it is one reason I am doubling/tripling down on these REITs while they are on a fire-sale.

Many of them (may) go bust, but that will make the others stronger with lesser competition, so that works THAT out.

The real threat, is all those call-centers that are being replaced by AI. But on the flip side, many of these types of businesses already out-sourced this stuff to over-seas in order to save a buck.
 
Most can't be concerted. How do you repipe most rooms with water, gas, individual heating....most office building floors consist of large undivided rooms. It would cost tens of billions to cover a few high rises in a single city alone.
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Because... of how the free-market works, in a competitive capitalist society, this shouldn't be as bad as you are fearing. Human ability can solve problems, just as good as politicians can fuck it all up.

As a demand for new goods/services increases for this sort of conversion, you will see specialists pop up and get to work, learning the trade and figuring out methods to go about it and drop costs. As more demand will show, so will more competition arrive for these projects.

This concept used to be a real thing after all... until woke America thought Socialism would work here ( I guess because it failed everywhere else?)
 
R1234 said:
I predict office space in the US will permanently disappear within 5 years, with the exception of medical office space where physical presence is required.

I am seeing an exponential rise of businesses becoming location agnostic. Hiring a programmer in a developing country for 1/10th the cost of US programmer has become really easy - I am doing this in my own business frequently these days.

There's also the automation trend that is picking up really fast across many industries...
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Agree the trend line has been set and it is staying the course. At location in SEA with boots on the ground and eyes peering the economic trenches. Housing is and will always be a necessity. One option for the system to take would be nano scale manufacturing. The days of old may return.

Akuma
 
What is your own business?

I feel the opposite. Work from home will be incremental for those types of jobs that are truly alone. I don’t see it working for most jobs without a productivity loss.

R1234 said:
I predict office space in the US will permanently disappear within 5 years, with the exception of medical office space where physical presence is required.

I am seeing an exponential rise of businesses becoming location agnostic. Hiring a programmer in a developing country for 1/10th the cost of US programmer has become really easy - I am doing this in my own business frequently these days.

There's also the automation trend that is picking up really fast across many industries...
More...
 
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