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

[semperfrosty]

Who’s gonna insert the finger for your prostate exam?

Machine.

Wouldnt want to be behind him in the drive thru i know!! hahahaha

 

[nitrene]

I don't buy that story. Look at inner cities. Even if the entire commercial real estate space is converted into residential housing this won't bring back suburbians. As long as democrats are in power inner cities remain no go zones. At least not for living purposes. Secondly, if your first part of your rational was true and jobs became location agnostic then this would speak for more folks moving to the countryside.

I predict a slump in commercial real estate but they won't get converted. Conversions cost hundreds of billions of dollars across the country,... unaffordable and often times impossible, engineering wise. Once prices drop sufficiently some corporates will snap up those spaces at a discount. The residential real estate market will be relatively insulated from this effect.

Yeah the inner cities in the US are in deep trouble. Nobody works downtown anymore and there is crime & homelessness everywhere.

I live in the SF bay area and SF & Oakland are in serious danger of both going bankrupt in a few years. A Square executive just got killed in one of the safer parts of SF (One Rincon Plaza is the home of luxury apartments & condos). Plus you got the death spiral created by these politicians who only double down on their stupidity. The education systems are collapsing here and they want to hand out $5 million to descents of slaves but not the Native Americans. These people are completely brain dead.

 

[SteveM]

Yeah the inner cities in the US are in deep trouble. Nobody works downtown anymore..

1. Nobody works in downtown SF anymore
2. 500 square foot condos costing $1.5 million in SF

Choose one.

 

[Specterx]

Holders of CRE loans will get crucified, as will office REITs.

The world will go on. Downtown office buildings which can't be converted or rented profitability to cover costs will be demolished and replaced with apartments.

Crime, vagrants, and leftist horseshit are a major problem in some cities, much less so in others, and rents/prices for downtown flats in places like Manhattan, Boston, DC are still sky-high. As long as cities don't let vacant zombie office buildings sit around for years, the end result could be much more vitality in downtown office districts which were once dead after 5pm.

 

[maxinger]

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

 

[deaddog]

Who’s gonna insert the finger for your prostate exam?

The specialist you are referred to when the blood work shows high PSA count.

 

[TheDawn]

Well one silver lining from this is that all these half-empty commercial real estate spaces is going to be converted to residential housing now and that would resolve some affordability crisis. No more living in vans and having to shower in mobile shower facilities or YMCA hopefully. Before letting the banks to foreclose on the property I am sure the owners would try to do something to earn some revenue to repay the mortgages even if it means spending hefty conversion costs.

 

[M.W.]

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.

Well one silver lining from this is that all these half-empty commercial real estate spaces is going to be converted to residential housing now and that would resolve some affordability crisis. No more living in vans and having to shower in mobile shower facilities or YMCA hopefully. Before letting the banks to foreclose on the property I am sure the owners would try to do something to earn some revenue to repay the mortgages even if it means spending hefty conversion costs.

 

[zdreg]

Yeah the inner cities in the US are in deep trouble. Nobody works downtown anymore and there is crime & homelessness everywhere.

An enormous Whole Foods in downtown San Francisco that opened just last year is temporarily closing. The company said concerns about worker safety forced it to shut down.

 

[TheDawn]

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.

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.