Is A Commercial Real Estate Crash Coming? What Industry Leaders Can Do

seadoug

seadoug

Well-known Member
Location
Texas
I was watching a 60 Minutes segment the other day and there was an interesting discussion on how many office buildings are now empty in major cities and how commercial real estate prices have fallen 40%. Banks were willing to hold the mortgages when interest rates were low, but not any longer, so tenants have moved out.

So much of this is due to people learning to work from home during Covid and now being given the flexibility to continue. Companies are now finding they don't need to pay the high prices for large offices. Also mentioned was the fact that most who do go to an office aren't in on Mondays and Fridays.

Many smart investors are now taking commercial real estate and converting it to residential housing. Just thought this was an interesting topic. I remember the Housing Bubble of 2008 and would prefer not to live through something similar again. Here is an article on the situation. Any thoughts?

Council Post: Is A Commercial Real Estate Crash Coming? What Industry Leaders Can Do
 

It's a major change so it's going to take time to digest it all. They're all big boys in that game, and it's not like the CDOs that were sold that consisted of no-doc loans with jacked up home values. Some will likely get badly hurt, but it shouldn't result in the world's financial system collapsing like 08.
 
Is there a commercial real estate crash coming? Yup. I'm no financial guru- any idiot knows it's gonna eventually happen. When? Don't know. Commercial real estate is built is spasms. In the late 1920s, they couldn't build sky scrapers faster. The Empire State Building wasn't fully occupied until the 1950s. The 1970s was another building era. The 2020s seems to be another era. I have no idea why they keep building to the point there's a glut on the market, but they keep doing it. In 10-5 years from now, I guarantee that there will be an another round of commercial real estate superbuilding.
 
People have been worried about this for several years, even pre-Covid. It must be nearing a peak if the corporate media outlets are finally acknowledging it.
 
It would be important that industry leaders advocate for policies and initiatives that support the long-term health and stability of the commercial real estate market. Maybe seek out opportunities and partnerships that can help mitigate risk and create new value.
 
Some might be converted to old school, dorm-type apartment living with large shared restrooms including showers. LA, NY and other large US cities are short on housing and long on office buildings. I've got every confidence that creative minds will figure out how to resolve the problem profitably.
 
I am often a critic of corporate real estate, especially so in recent decades of ridiculous selfish residential real estate inflation that has greatly widened the wealth gap, promotes open border immigration, unfair globalization, destabilizes society, takes hard earned wealth from we working folks, and forces increasing numbers of defenseless lower classes into hopeless homelessness. Because real estate corporations and their powerful loan making banking allies also control news media and puppet politicians, they dominate media that deflects societal criticism elsewhere.

Although commercial real estate corporations are usual separate business entities from residential, their complex financial holding companies greatly involved with banking are often the same. Accordingly this person will shed no tears if their investors take heavy losses even if such is bad for the economy and the rest of we working class folks.

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StarSong said:
Some might be converted to old school, dorm-type apartment living with large shared restrooms including showers. LA, NY and other large US cities are short on housing and long on office buildings. I've got every confidence that creative minds will figure out how to resolve the problem profitably.
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I stayed in a youth hostel in London once that was an old office building that had been converted to a hostel. It was an interesting place.
 

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