The Time Bomb Lurking in All Those Empty Office Buildings

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Low interest rates sent money pouring into real estate, transforming cities around the world. But pandemic lockdowns emptied out business districts and tenants have been slow to return. Now commercial real estate is in trouble, and the consequences may extend across the global economy. Get unlimited access to Bloomberg.com for $1.99/month for the first 3 months: https://www.bloomberg.com/subscriptions?in_source=YoutubeOriginals

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46 COMMENTS

  1. Cities and states need professional investment office specifically geared to buying these assets for pennies and converting them to housing. Like some have done for medical debt. No more bank bailouts! Let the market set rates.

  2. Still assumes me that the small businesses lost out during the pandemic but large corporations didn’t. And now COVID is to be treated like the flu lol

  3. What about the new trend involving converting office space to residential use ? Well unless that's done right, converted buildings could remain unoccupied.

  4. But what actually seems to be the problem? Just because people are now able to virtually commute does not mean that the tenants can not pay their rent. Seems to me that you have been bought out by big business.. Sellouts… Just because someone goes to a physical place to work does not mean that it affects the employers bottom line, this is the reason I say you have been bought. You lost a follower today.

  5. Well, they didn't want to make "affordable" housing so the big companies can tank as far as I'm concerned. Don't worry, we'll move in once the companies go under.

  6. Wake up. The reasons for companies needing a central location for all employees to go to, even before the pandemic had boiled down to social norms, namely that is what a company and it's employees are supposed to do. After the pandemic, all companies began to see there is no actual advantage to owning a large office space, they can accomplish it all with remote work. The reasons for why cities and downtown areas exist, has evaporated. Things have permanently changed. The office space requirements will NEVER come back. The pandemic forced everyone to find a better way, and they found it.

  7. Demographics have been around a long, long time. For decades it was known baby boomers were not being replaced. The democrats focused on killing them off or starving them with high minimum wage and high inflation. Anyway RE investors knew many countries around the world including US face an inverted bell curved population graph, a declining population. Russia's is serious but not as bad as S Korea. China as well is facing it.

  8. If something cost 13 cents to buy but has 800million of debt attached, that's not going to cost you 13 cents is it? Tell me you fudge numbers for a living without telling you fudge numbers.

  9. Six weeks ago there was a little noticed report out of London predicting massive losses for banks with commercial real estate portfolios in the US, especially the regional banks. We now see that Bank of New York is in trouble. Chicago has already seen two buildings in foreclosure sold at pennies on the dollar in the Loop, one owned by Blackstone which just walked away from the property. So, 2024 is going to be a rocky ride. Banks already know which loans are bad or going bad, so they are already writing down loans.

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