The Time Bomb Lurking in All Those Empty Office Buildings

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: www.bloomberg.com/subscriptio...
#RealEstate #Economy #Bloomberg
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[@business]

Get unlimited access to Bloomberg.com for *$1.99/month* for the first 3 months: www.bloomberg.com/subscriptions?in_source=KZbinOriginals Watch more of our News Spotlight documentaries👉kzbin.info/aero/PLqq4LnWs3olXOhUOv4O6r-9OdWTQN83se How This Tiny Country Can Avoid the 'Oil Curse'👉kzbin.info/www/bejne/f4uYoZyteJWGZ8U Singapore, China and a $2 Billion Money Laundering Scandal👉kzbin.info/www/bejne/a6umqZRvoLN7d8U

[@trapiconti4001]

You showed the Aon center in chicago, not LA

[@iamgermane]

AND THEY SUE TRUMP FOR OVERVALUING HIS PROPERTY???

[@Rays_Bad_Decisions]

It would be nice if you talked about how retirement funds are used to back these bad investments while Chinese use fentanyl money to buy new construction

[@AMPProf]

OMG I HOPE SO FINALLY A RESET

[@chrishoff402]

This is why I have a theory about that $355 million/$455 million court judgement against Donald Trump in New York. His properties were valued at that amount before Covid and Zoom made the whole downtown financial district obsolete. Now those Trump properties are only worth what the Court says they are, a mere fraction of that $450 million, maybe only 18 million. So lets say the NY court seizes and then sells all the Trump properties for less than $100 million. Trump can take the court judgement to the tax man and claim a massive deduction. He can also appeal the verdict to the supreme court and not only get the judgement overturned, but the supreme court can say he's the victim of lawfare as a form of political harassment and they won't tolerate any further cases being brought against him. So now NY has to make restitution for the amount of $455 million because their judgement has been overturned on property that they sold for less than $100 million, because that's actual market value in 2024. Trump gets to offload worthless property without losing a dime on it's original pre Covid market value and pays less in taxes for it. That's the real Art of The Deal.

[@treasurethetime2463]

Please don’t blame the pandemic. The ridiculousness of commercial real estate and the future of a drop in the need for office space was predicted in exponential organizations years ago.

[@portrex56789]

Years ago🗣️ they ALREADY knew this was gonna happen

[@wrightmf]

Exactly!

[@jimbojimbo6873]

But it was literally the pandemic that started this

[@Jebbis]

@@jimbojimbo6873 no the pandemic was just a black swan event. This has been going on for over a decade.

[@williamparrish2436]

@@jimbojimbo6873 The pandemic was a once every hundred year occurrence. Almost impossible to predict and it crushed the world's economy. No way to predict that!

[@GeraltBosMang]

They made the risky decision, and now taxpayers are going to have to bail them out again?

[@renemartin5729]

Of course. They're too big to fail.

[@HaiLeQuang]

Of course. Printing more money would make us suffer a bit inflation. But if a burst happens, it may lead to chaos

[@jeffcampbell2710]

We wish. What's coming is far worse. Look at BY, LA, Oakland, Chicago, San Francisco, and numerous other cities.

[@sweden_is_gone]

Yep. The taxpayer is the ultimate loser. 😂

[@brulsmurf]

as is tradition

[@edwinurbina7843]

It’s interesting that the media focuses on the health of the economy more than the health of the citizens that make the economy run

[@Koba_78]

Bingo

[@cx24venezuela]

Universal health care? Comunism woke agenda

[@GigachudBDE]

Insane how theres simultaneously a giant commercial real estate crisis going on due to oversupply, while at the same time there's an affordable housing crisis due to undersupply. All without doing anything about changing our archaic zoning laws and no real infrastructure projects for urban areas pertaining to mass transporation. San Fran can't build giant apartment towers because Nimby's don't want their views ruined and New York can't fill up their rent controlled apartments because landlords want market rate rental prices for rent controlled units. This country is a disaster.

[@HepCatJack]

Often the taxes are based on what the city evaluates a property to be worth. So they have to pay taxes as if they were receiving market rate rental while being hampered with the rent control. The only way that landlords can afford rent control is if their taxes are lower and they can afford the maintenance of the property otherwise it's a melting ice cube.

[@Westhamsterdam]

Office space is very hard to turn into residential.

[@HepCatJack]

@@Westhamsterdam true, but for those that can do it and end up doing it, it will bring down the available inventory of offices bringing it closer in line with demand.

[@Dendarang]

Commercial real estate isn't the same as residential, vast majority of these buildings can't be easily or at all converted into housing because they're giant office blocks built to be places of business and aren't necessarily fit to be inhabited on permanent basis.

[@lenaely6146]

As long as you understand it's a disaster...a man made disaster.

[@Usernotfound31231]

Funny how the billionaires who expect handouts for their bad investments are the same ones who think everyone with student loans should suffer forever

[@nisher15]

Funny how you vote for the politicians that help them..

[@ricardcluter4765]

Funny how what leftists call capitalism, is actually socialism, and it's FAILING, as expected and as it always does.

[@IsaacKripke]

Student loan “relief” is a blatant handout for people enriching themselves. Blue collar workers shouldn’t be footing the bill for the education of the white collar class.

[@bobcortez9471]

Neither should get handout, that's the solution, not give away money to debtors for their degrees in gender studies

[@Usernotfound31231]

@@bobcortez9471 I get that you’re triggered but it’s pretty pathetic that you got emotional and made this about your identity politics

[@Who-vt9oh]

I was an underwriter in commercial real estate lending in the years right after the great recession, and I remember being told (without actually being told) to try and approve as many loans as possible because we needed the origination income. The institution wasn't making hardly anything from interest income, because of the historically low interest rates, so there was a real pressure to approve as many loans as possible so we could collect the origination fee. The origination fee is a percentage of the loan amount (ours was 1%), so there was also an incentive to approve larger loans. The current situation doesn't surprise me at all. It was inevitable.

[@ahmedzakikhan7639]

Interesting. Doesn't it require approval from departments like Risk ?

[@dieglhix]

​@@ahmedzakikhan7639the risk department operate on stakeholder risk decisions. The risk department never take decisions, only get consulted and evaluate.

[@droldsw31]

You should be locked up in jail.

[@davidcox3076]

Can't make anything off the interest, so make it on the volume of loans with the origination fee instead. Pretty slick, until it all falls apart.

[@RUHappyATM]

@@droldsw31 And that my dear sir is why I don't have any respect for those involved in the financial industry.

[@pollutingpenguin2146]

The economy was never fixed in 2008 - the companies and state just made a bunch of new dumb decisions as they didn’t want to fix the issues and instead just kicking the can down the road and now it’s all going to come crashing down. And again, it’ll be the regular guy who’ll have to pay the bill, yet the regular guy has not benefited at all since the financial crisis. It’s completely outrageous.

[@butwhytharum]

This issue wasn't part of 08. That crash was the plebs debt. This is the 1%'s debt. And if you're in my situation you don't have any debt and are waiting for the crash to capitalize on the greedy who put the cart before the horse.

[@wajutiem08]

Correct. I have been saying this. But people, especially conservatives, ususlly tell me to just stop drinking that latte, or stop eatin toasted avocado,or living beyond your means, or quit your job and get a better job, or go back to school, etc etc. In otherwords, they say anything to gaslight you to believe that you are the problem rather than the bad economy from 2008.

[@annoyingcommentator1582]

@@wajutiem08 People who see outside forces as the problem might not be 100% false all the time but they are less likely to make intelligent decisions to change things themselves. I took advantage of the opportunities since 2008 opportunisticly (yes I feel the need to stress that. It's the core of financial sucess, no matter how grand or modest), and feel like I can cheer on an obsolete sector disappearing now. Of course there are young people now who did not have any opportunities yet and will be hid just as hard as young people have been hit in 2008. But it's not the majority. It's not that it is wrong that the problems of 2008 have not been dealt with. It's that the general moron things he can trusts politics with solving the problem for him. What have you done since 2008? How have you prepared for the next crash? And what where you willing to give up for it? There are a bunch of movies about 2008 and they all show to some degree it's not just one part of society that fucked that up. The banks, the government and the "little people" all knowlingly and ruthlessly participated in what was going on and then blamed each other like whiny little bitches. My favourite of the bunch is Margin Call, because of the "Fuck Normal People Speech" kzbin.info/www/bejne/pHOomH2QmclleLMsi=SPJKF6SXNnGJfEOV Leverage, CDO, MBS, government housing subsidies and inherents problems with financial regulations have all been throughly discussed as important factors, but the unfathomable hypocracy of the ordinary consumer gets too littel attention in the whole issue. You didn't get anything out of the shit you have to pay for now? Well, I don't know. Maybe not. Maybe you are super special. But that makes you 1 in 10 million or so.

[@JudgeCrater22]

You can trace the wreckage in the current American economy and the commercial real estate collapse to 1982, when deranged SEC chairman John Shad changed the SEC's policy since 1934 on share buybacks. Shad's new rule 10b-18 stated that share buybacks by corporations were no longer presumed to be market manipulation and therefore illegal. Instead, Rule 10b said corporations had a “safe harbor” to buy back their stocks, which would usually cause their share price to go up. This one rule change put "greenmailers" like Carl Icahn and banksters in charge of Wall Street. "Activist" investors could threaten to take control of companies unless the companies went into debt to buy back their shares to raise their price and ensure the greenmailers made a handsome profit. The companies now had to pay off the loans they took out to buyback their shares. Many times in the 1980s, the companies were unable to meet their new debt load from buying back their shares. Then, bankruptcy. Every goniff with an M.B.A. degree got into the act, calling themselves hedge funds or private equity. This debt death spiral continues to the present.

[@draneym2003]

But knowing how this ends, when real estate development gets overextended it's perfect free market to bail these guys out. Good luck on getting the same on your mortgage.

[@jaw0449]

Speculators overspeculated? Oh no, we can't let them fail

[@iamgermane]

AND THEY SUE TRUMP FOR OVERVALUING HIS PROPERTY???

[@Distortion0]

Housing advocates have been saying for years that our cities are full of empty buildings only have value on paper and their owners are propping up their value with debt. We've been told we were crazy this whole time.

[@NasTwice]

When homes and rents across the world rise to unsustainable highs, pricing out generations and people in need, they don't say anything. When the few wealthy landlords of office buildings possibly lose out on their rent money, it's the worst financial crisis since 2008

[@churblefurbles]

They bring in those with lower standards instead.

[@texasclawhammer6578]

Exactly. Well said

[@nyc8452]

Geez, private equity, banks and commercial real estate companies face huge losses on office buildings and they're insisting that we all 'return to the office'! I wonder why? It has nothing to do with productivity, company culture or clients and everything to do with trying to protect bad investments at artificially low interest rates.

[@John-xd9wr]

The rent is due for the building regardless if its got workers inside it or not.

[@nyc8452]

@@John-xd9wr but companies renewing their leases are downsizing their rental needs because they don't need as many seats. Most commercial leases are 3 - 5 years so it was fine during the pandemic, but 3 years later companies have downsized (and continue to downsize) their office needs when their leases are up for renewal. They also have a lot of options now so not only are they downsizing their lease, but they're getting a better price per seat. Lower occupancy and lower prices means less rent, which means a much higher potential of defaulting on loan payments, which means souring investments for banks, hedge funds and private equity.

[@neatodd]

Just because you can add background music to a video doesn't mean that you should. Think of the viewer trying to focus on what is being said.

[@iank.2162]

I never understood the point of it. "oh yeah, sound my uncle beating pans or strange violin is what is missing in this video"

[@christianschwalbach7561]

or you could ignore the noise....

[@scrapbrainsinc]

But how do I know when to be sad? Or When to be happy? Help me!

[@WackadoodleMalarkey]

Background music is for making whoopie, not for serious journalism

[@jomckeag4482]

I came here for the content, stayed for the background music

[@jameslongstaff2762]

After the 2008 bail out, I'm partial to letting the banks fail

[@davidburnett5049]

They wouldnt help us if we needed it. Why should we help them?

[@theultimatereductionist7592]

Obviously, jameslongstaff!

[@JohnClarkW]

I am going to ride past the fact that you are late to the party, and instead acknowledge that you showed up at all. The 08 bailout just encouraged other risky investments.

[@jimkelly4214]

You want to lose your life savings?

[@davidburnett5049]

@@jimkelly4214 i dont have enebough to worry about

[@karachaffee3343]

What is going on is that bankers think that bankers are the most important people in the world --and tall office buildings to house them are therefore the most important structures to build lots and lots of.

[@jimbojimbo6873]

What are you talking about

[@Australiaisupsidedown]

I too have autism

[@William0271]

We need an Amendment banning the government from bailing out failing lenders.

[@alinaqirizvi1441]

What if the failure would be detrimental to the standard of living of the people of the country

[@William0271]

@irizvi1441 It's the peoples' fault for agreeing to loans they can't pay back. They can start a loan insurance company.

[@Charlie-ly9kp]

@@William0271😂😂😂 it’s crazy you think that, genuiney

[@William0271]

@@Charlie-ly9kp Do you have no concept of reality? Right not loan insurance exists. That's what the federal government is doing, insuring garbage loans with our stolen tax dollars. Privatizing this would take the burden off of tax payers and put it squarely on the people and businesses being reckless.

[@arsenal-slr9552]

The problem with that is these lenders also buy things like, your mortgage. So if they default on that, your payments go up in smoke.

[@MrTigerStarX]

0% interest rates are turning out to be disastrous in the long run.

[@raquetdude]

He said that the governments gave money to people… they didn’t they gave money to the banks… it was never government debt it was always private bank debt

[@myday2704]

All caused by lockdowns we didn't really need to have!

[@MistaTofMaine]

Agreed.

[@neodym5809]

Well, one can argue that the alternative would have been worse. But honestly: property owners losing money does not sound too disastrous to me.

[@sokolmihajlovic1391]

A surprise? Big daddy of all crisis because of too low interest rates for too long has to popp yet, Japan China is not far behind

[@tahbit]

"Office Space" is not an industry.

[@crude223]

It is a great movie though😂

[@rickkearn7100]

Odd how world economies go belly-up when billionaires make mistakes, isn't it?

[@jimbojimbo6873]

Billionares are just the tip of the iceberg, its midde class commoners that work for them helping too We are all in this not just one white woman making decisions in an ivory tower

[@hiimjustin8826]

Oh but see, the reason they did this is because they wanted to become more wealthy. So I'm sure now you're just full of empathy

[@JSwagy]

Privatize the profits, socialize the losses.

[@felipesuarez5041]

The biggest equity holders and one of the biggest investors in the world are pension funds. That means common people that count on this money for their retirement. If these funds fail, people will have nothing to survive on their older years. The alternative to this, is public pension systems, where young people pay for the retirement of old people, which is basically a Ponzi scheme. This does not mean that the managers of these funds should not be held accountable for doing bad decissions with other peoples money.

[@snydedon9636]

And politicians.

[@zealman79]

Come on guys, we need to be working at the office 14 days a week to save these commerical guys!!

[@speciestraitors9297]

Exactly. The younger generations are so selfish smh

[@rfwhyte]

This is the real reason all the CEOs are pushing for their employees to return to the office. The CEOs and their wealthy friends and cronies are the same folks who who own all this commercial real estate. The only thing they care about is propping up the values of their commercial real estate holdings, and all the talk about "Productivity," "Creativity" or whatever other BS they're spouting is just smoke and mirrors to distract from what they really care about, which is protecting the value of their investments. The pandemic proved beyond a shadow of a doubt that workers spending unpaid time sitting in cars or on transit commuting to offices provides exactly ZERO value to the economy, but the wealthy CEOs and bankers who run the world would rather people suffer needlessly than be slightly less rich.

[@Julian-tf8nj]

my thoughts, exactly!

[@OriginalContent89]

Absolutely this!

[@thebl3mish]

It all comes down to this "poster family" of the 1980's where "dad" would commute to downtown and "mom" would stay at home to cook, clean the house and pick up the kids. Nowadays in most families both parents work full time and sometimes you would see them stretching their work hours more and more, WFH and flexible hours was a small blessing for the deteriorating white collar middle class families - but hey the moronic managers wanted to "actually see them working and wasting their life away" so yeah back to meaningless work environments.

[@grogery1570]

I did wonder why corporations were pushing for a return to office's when in the past they tried every thing they could to reduce expensive rents. Work from home at first glance is a financial gift to corporations.

[@Alone47]

@@grogery1570but it diminishes the self-importance of management, so …

[@ThePrairieChronicles]

It pains me to have to drive past acres of empty new-ish commercial buildings with big windows and sweeping architecture, and also see empty commercial skyscrapers in the distance that are sitting vacant. Some for years. canada is still in the midst of the worst housing crisis / housing shortage in the history of the nation. I've been "between rentals" for 3 years as of next month (March). No addictions or mental health issues. My stuff in storage and my home based business still on hold. I _want_ to be housed. I just turned 55, but that means nothing here. If even 5% of these commercial properties were converted into housing, people like me would be overjoyed. At this point, stick a toilet and shower in a windowless storage unit and I'd take it. There's no way it's as complicated to convert at least some commercial space to housing as the politicians claim. Builders, architects, and tradespeople back up that statement. It certainly doesn't take years to "study" the issue. Even a law that every commercial building must have at least 1 (to several floors, depending on height) of housing above it would be a start. It worked in Europe for hundreds of years. Every shop had a living space above it. I don't care if I live above a bagel shop at a mini mall, or above a stand-alone stationery store, or in a converted office space. Real people need housing! Now!

[@redpilledwarrior4367]

It was never about us "Real People". I feel your pains.

[@ThePrairieChronicles]

@@redpilledwarrior4367 I know we're just numbers, social credit scores, or "eaters" to the 1%.

[@LL-qj5vg]

they will be occupied by foreigners

[@people_are_sheep]

China has plenty of money... ...laundered in overseas real estate.

[@ThePrairieChronicles]

@@people_are_sheep I know. Untold thousands of apartments, condominiums, and houses here in canada sit empty year-round so the сср has mailing addresses / "residency" here. Tax breaks, and more as well. Then there are all the empty "air bnb"s.

[@vitodanelli]

“Privatize Profits - Socialized Losses”. The Capitalist Business Model (or in layman’s terms: Heads I Win; Tails You Lose).

[@LarryDickman1]

Real capitalism would let the banks or businesses fail. We have Crony capitalism.

[@DannyDelorean]

Oh my. Who would have ever predicted that greed would create consequences?

[@joeg9478]

Just Let The Banks Fail No bailouts.

[@QAYWSXEDCCXYDSAEWQ]

If the bank where you keep your savings fails, what do you think will happen to your savings? They like the banks will disappear.

[@chris36256]

not if you put your money in an FDIC insured bank @@QAYWSXEDCCXYDSAEWQ

[@whatisrokosbasilisk80]

​@QAYWSXEDCCXYDSAEWQ Should've bought gold. We really need to normalise this idea that wherever you put your money IS A RISK.

[@corgiman101]

@@whatisrokosbasilisk80you think a totally useless pure metal that you ALSO dont have in-hand is going to help you if the world economy collapses? no, its not. What do you think the price of gold is based on? the fiat currency held by the banks

[@206remyboyz7]

I Agree anybody would be a fool put all of their savings in a Bank anyways ​

[@ajkulac9895]

Just project holographic avatars of remote workers into offices and charge the company for office space. Win - win - win.

[@coreyashley4949]

The crazy thing, is that people were buying up 'virtual property' for people to roam around in (sometime in the near future). The plan is to have us own nothing and be happy.

[@ericbailey9549]

Sounds like all these people need to learn financial responsibility.

[@jimidando]

Honestly yay. The market regulates itself after all.

[@wotermelon_]

Yeah and that's called anarchy, the market may as well decide that you aren't valuable and "do away" with you.

[@GenesisRip]

@@wotermelon_A self-regulating market is... "anarchy"...?

[@wotermelon_]

@@GenesisRip Yes

[@prolific1518]

Not at all. Fed govt will step in during Biden's election year to make sure it doesn't fall apart.

[@redpilledwarrior4367]

@@wbay3848 Ikr! Look at all the homeless who cant afford basic needs and pass away due to exposure while camped outside one of these unoccupied skyscrapers. Or are we only talking about bankers here?

[@jamescampbell6728]

Giant skyscraper office buildings have never been a good idea. They aren't space efficient and can't easily be converted to residential living spaces. We are just now realizing this, but at least we ARE realizing it. Many financial institutions will take a hit, but they deserve it for making a bad investment. Now these stupid things won't be built anymore. Hopefully we can effectively convert them to residential spaces like they are trying to do in NY so we can avoid a total collapse

[@georgepoitras3502]

But when you do that, the total rent for that building is no longer going to bring $100/Sq Foot as an apartment. In other words the value goes down and richie rich has to add collateral for the loan he took out 5 minutes after this building opened.

[@raquetdude]

2:50 they didn’t give money to people they gave money to private banks to cover their debt there’s a major difference

[@emptiester]

Tell me the difference because i dont know.

[@emptiester]

@@wbay3848 everyone who works at a private bank is "extremely rich"?

[@redpilledwarrior4367]

Its funny how so out of touch these guys are to make the notion that "the people" received the money. LOL.

[@mvmlego1212]

He's not talking about bailouts; he's talking about extremely low interest rates. Granted, the Fed loans to banks, not individuals, but it does strongly affect the interest rates that individuals receive. (e.g. for mortgages)

[@mchammer1836]

At the heart of this is office workers are now working from home. Another gift from COVID

[@yux.tn.3641]

with remote working becoming more popular, this won't be sustainable

[@jimshoe402]

My Boss a Builder grew up in Chicago said No Way u need this 35 years ago. We built ESA Hotels too like 20 said these will be Senior Places 20 years from now BUT homeless centers NOW..😝😝😝😝😝

[@desertstar223]

They build fantasy castles while there are people living in tents on the streets. The world is upside down

[@l0os176]

Every major societal and technological change has people who lose out because of said change. For this change, it's those who invested heavily in commercial real estate. The world is a better place with fewer companies requiring an unnecessary physical office presence. Those who invested in commercial office real estate will eat the losses, and the world will be just fine.

[@viniciuslsp16]

basically they put the whole economy at risk (again) in order to protect the few individuals who own all the real estate - isn’t it great to have a government that works in benefit of the people they represent (the 1% of course)

[@SystemaAlpha]

Those developers and owners will be bailed out with the money from the workers, who in turn will be fired and not bailed out

[@ChrisLevelsUp]

I hope tax payers don’t have to bail them out too

[@wallstreetzoomer]

its USA the empire of corporations and the top 1%, cue your hopes.

[@DefianceFinance]

you can hope away... in the end you will still have to pay.

[@renemartin5729]

Of course you'll pay. They're too big to fail.

[@jeffcampbell2710]

It's going to be far worse

[@apemancommeth8087]

It will!

[@channelnevin]

So the banks took on too much risk? Let them fail.

[@neanam]

They will fail. But next time they will receive a bail-in not a bail out. Basically the money from depositers will be taken

[@elliotsilverstone8808]

Why would people put time bombs in office buildings? It sounds hazardous.

[@LivingWithGout]

Even if interest rates come down, the buildings are not bringing in more revenue. Hello?!? The issue is working from home, over leveraging, high vacancy rates, and geographical dynamics. It’s not interest rates alone.

[@onee]

Wait! I can buy it as a company, live in it. And then declare bankruptcy when people want their money?

[@pamelahomeyer748]

Start allowing stores in daycare centers to be in those buildings on different levels

[@r.pres.4121]

It is the exact same problem with all the empty enclosed shopping malls as with all these office towers. There were too many being built throughout both the USA and the rest of the world. Now that technology and societal changes are rendering all these commercial real estate as unneeded and obsolete, the world’s landscape will end up littered with empty shopping malls and office towers that most likely should have never been developed in the first place.

[@seed_drill7135]

While the end result is the same, I don’t think it was overbuilding that killed the malls. Many of those that have failed were profitable for decades and have no nearby competitors, it’s online that killed them.

[@georgepoitras3502]

Right because they were never opening new malls to support the communities just to borrow money against the inflated value.

[@angelainamarie9656]

The people who used to do all that stuff are still here we just don't have any f****** money anymore because wealthy people have vacuumed it all up that's all that's actually happening.

[@adelitavalle1852]

I been through the 1970s high inflation, up and down of the stock market like Black Friday, tech bubble and the 2008. Each individual will handle a bad economic differently. If you are not prepared for bad time, it hurts.

[@thejonno2709]

The real reason companies are forcing employees back to the office; they signed reckless and untenably long office contracts with little vision of the fact that they would soon not be necessary. Now the banks are pressuring them back to the offices and trying to preach that offices somehow give productivity to drive more investment.

[@TheRightONe-et3gh]

BRAVO! I actually I just talk with someone in that situation. The management need to cover for their stupidity.

[@user-zt8hn4ns5w]

In monopoly there is no loans on property

[@hiddenname9809]

Should we feel sorry?

[@jeffdunnell6693]

Cities are dying,,office buildings have work from home,,no overhead rent.

[@trailingupwards]

Government bail outs for private investors is fascism.

[@wilstewart5743]

This is great to see. I want more debt and more insolvency for commercial real estate. I’m a georgist and also a work from home ultra.

[@AAGGHH4]

You’ll pay for it via taxes to bail out the banks if it happen. I know you probably think you’re been edgy but actually you’ll be badly affected even if you don’t own the asset that collapses

[@marcusmoonstein242]

Absolutely agree. The worst thing that the government can do is to protect financial institutions from their own reckless lending. And Georgism is the best tax system.

[@BobJones-zw3ui]

The banks made a series of very liberal [not conservative ] bad bets. They should not be bailed out nor accommodated. As with any other business, if they make bad bets, they need to fail.

[@RichardCurrie]

Property prices are too high and rents are ridiculous. What economy can survive when rents are eating all the money

[@alphaomega1351]

Excessive debt is literally the problem with everything. Why not base an economy on earnings and savings? The debt based system makes no sense. 😳

[@brent4073]

We need to get back on the gold standard if you want people to stop taking out so much debt and abusing debt..

[@hostrow]

Modern economies are based on the premise of constant growth. How does one do that? They do it with debt.

[@Alsry1]

@@brent4073 the gold standard is impossible to go back to. we have too much money in circulation for any of it to be back by gold.

[@oldcat87]

It’s all about work from home. Meanwhile residential single family home values keep rising

[@gmfan09]

Can these office buildings be converted into apartments? Isn’t there a house shortage right now?

[@taylor3950]

It’s difficult because the layout and plumbing isn’t set up for individual apartments (unless they were huge) it would take a lot of retrofitting

[@WW-sw8ls]

could all be used for implosion Samples… call Bush

[@pepperonish]

Some, but it's not cheap. Unless you give pretty big subsidies to the developers, they cannot make it affordable housing. Or if the potential rent isn't high enough, they wouldn't be able to do conversions without taking a loss.

[@chrishan9138]

I've got zero sympathy for organisations that forced people to commute to offices for decades or the real estate owners and developers that profited from that misery.

[@mikmillerrealtor4491]

There’s a simple solution, lack of affordable housing is absorbed by commercial office vacant being converted into mixed used residential.

[@richardhartland3637]

Real estate is being treated as an asset, which is ridiculous since it doesn't produce anything. It is NOT capital, it continually has wear and requires upkeep, contains continual tax increases. The eventual realization that this is a non productive use of investment has come. the bank and speculators deserve everything they loose. it will force capital to be used for productive means.

[@NS-cs3wp]

We can all rest assured that when these real-estate giants start to go bankrupt, they will be bailed out by the government with our tax dollars, get told that "it's fine because the money was repaid after a few years!", and more people will lose their homes and jobs. But a few wealthy people will make even more insane wealth! So everything's fine! The bit about everything being fine was sarcastic, sadly. Everything else is going to be what'll happen.

[@Westhamsterdam]

You have still got the problem what to do with these buildings. They still require huge maintenace.

[@notbob2249]

The gov and the fed won't have the same tools (zero % interest rates) to simulate the economy like they did in 2008 due to our current inflationary environment. Inflation would run rampant and the fed would be backed up against a wall: either bail them out and risk hyperinflation or let them fail and have the second great depression.

[@OnlineVibes-bs9jn]

How come when I get addicted to gambling the debt it creates is my responsibility but when they gamble tax payers pay their debt?!?

[@NotADuncon]

There is something to be said about how unregulated and overspeculated an industry is that the words "this is the biggest crisis since" are followed by 2008 and not something 50 years ago. If the crisis cycle is 15 years there is a problem.

[@richnubbz4910]

two words "SYSTEMIC RISK"

[@danielcaceres9971]

So if there is no need for more office space, why build it??

[@pariahnation1284]

let em FAIL

[@ericwright8592]

There's another massive lever for removing money from the economy other than interest rates. Taxes. Raising corporate income tax would have a massive benefit of removing excess capital from corporations, that are by definition doing well. While also not having to necessarily drop rates to zero, which exacerbates the boom and bust cycle of credit sensitive sectors like real estate. Unfortunately we don't have economists in control of taxes, but rather politicians who use corporate taxes like a football for political games.

[@budstep7361]

2:45 thank you for admitting, too many people don't realize that the mistakes of the past have not yet been paid for... They are putting it on the back of the 99%.

[@johnnynephrite6147]

"Asia and America are doing slightly better"? Better than what? Im working from home now and haven't been happier, so this "crisis" is a boon for me.

[@ghislainpitre6597]

Transform them in condos...use them to produce food using LED and hydroponic...Aquaponic?

[@somedude5353]

There’s a residential housing crisis - so time for some expensive conversions

[@piotrpp5478]

Lots of fear mongering, not a lot of data...

[@butwhytharum]

The 1% is in alot of debt and trying to fear monger that the 99% of us will hurt... No if you're not in debt and have an income you'll be fine... But if you work for someone else and their in debt... Might not be working soon.

[@EveLord-hx1me]

I had a suggestion to make unused office spaces with flexible mix usable convertible spaces, When there are no office renters it can be easily converted into temporary rental accommodation with movable walls, ready placed plumbing & electrical grid. I even suggested to a office space owner that had been empty for year or more to convert it into pod hostel inspired from Japan's capsule hostels.

[@nextinstitute7824]

You can make it as difficult as you want, but if the zoning laws are changed, and these property companies adjust to the new reality, two problems are solved housing and the property market somewhat saved. It is really wuite simple.

[@nextinstitute7824]

These companies are not coming back.

[@jeffreystanley4991]

Oh no. Not rich people and banks loosing money. How horrible for them. They might have to fly in the greyhound of the sky instead of private.

[@user-qs8zj1kt9g]

Rich people wouldn’t suffer, the rest of us would suffer

[@cmleoj]

Maybe the commercial real estate lenders’ over reliance on avocado toast and lattes is coming home to roost. 🤦‍♀️

[@dipro001]

This video might be the most important video on KZbin right now!

[@FPfreddyyy]

Seriously, most of these can probably be converted into housing with only minimal loses. This is almost a non issue.

[@sthede1000]

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.

[@MartinPittBradley]

I know they say offices can’t be converted to residential, but that’s not true and we have a simultaneous housing shortage

[@joebe123]

Just convert them to condos. Solves the housing problem too. Your welcome world

[@jeremypearson6852]

Love that old film showing a row of bank tellers.

[@janofb]

Are they all going to get charged by Letitia?

[@Mike-bo1oj]

if interests are lowered i don't see how that solves the bigger problem. There are no tenants. My company is almost completely remote the only in person building we have is warehouse space for the logistics.

[@JAraujo-yt]

Doesn’t matter, keep interest rates where they are to keep investors prudent

[@DigitalNomadOnFIRE]

The main problem is people are used to property prices massively increasing. Assets appreciating at crazy speed ISNT NORMAL. Assets are supposed to go down sometimes.

[@venonat80]

Basically the banks were irresponsible with who they were lending to and trying to blame other businesses and entities for not renting out office space they no longer need. It’s the risk property owners take when you use it as an investment. Repurpose those office space into residential mix use or use the unused property as storage space.

[@Delosian]

The value has been hyped so much that a decline was inevitable. We created another property bubble just like the GFC.

[@tharblin]

I remember the $35 overdraft fees and feel nothing for the banks. Let them implode.

[@paritaistudio206]

"In the game of monopoly" = Patronizing 101

[@donaldboyer8182]

Someone who worked in a bank many years ago told me that banks are allowed to loan $25.00 of "funny money" for every real $1.00 they hold. This means that if the borrower defaults someone has to take the hit for all the "funny money" and that means you and I.

[@Drone_PilotSG]

It all comes down to location. Where I am, I am renting retail space for my business at 10k a month

[@velocity324]

This is nothing like 2008. Just a bunch of billionaires getting cut down because noone wants to spend the day in their awful overpriced concrete bunkers anymore.

[@williamlloyd3769]

AON Center aka First Interstate building in Los Angeles, CA has a small enough floor plate to convert site to condominiums or mix use with hotel. Overlooks newly rebuilt McArthur Park. Wonder if it would pencil out for a conversation?

[@BahamaSmooth]

As we know, lending works less efficiently than before. If these greedy executives had allowed fresh blood and ideas, they would not be in this predicament. The majority of the population wants to work from home. The game has changed-no turning back to being stuck in an office anymore.

[@rick_thunder]

Author Harry Dent predicted in 1998 that in the future more and more people were going to work from home because the expanding Internet and infrastructure was going to allow for it. Working from home is cheaper for the company than maintaining expensive office space. In other words, we have known this for 26 years and, yet, construction companies overbuilt on office buildings and creating too much supply. Too much supply means a drop in prices. We all knew this was coming.

[@bdheidbhg2847]

Taking a step back, the solution isn’t too hard to see. The residential sector has too little; the commercial sector has too much. Ideally the government, private banks and the central bank can come up with a solution to re-allocate those commercial buildings into residential ones. It will cost some $ but at least this time with the bailout we can give people a place to live. So we the tax payers get something out of it this time.

[@shatkick]

Turn them into low income apartments

[@Cosmo4357-mj1tw]

I have one near me. They started building it in 2007-2008. It has never had any tenants.

[@flacjacket]

One of the big problems not commented on is that office buildings cannot effectively be converted into housing. The plumbing and electrical layouts are not conducive and the cost of modifying those systems is so great that it in most cases makes more sense to tear down and rebuild.

[@chapman1569]

Couldn't they make large rooms and make the toilets, showers and kitchens communal? It would not be ideal but it could at least help make some affordable rents. In Europe it is common in some places to share a bathroom.

[@nathandelogu5667]

There’s to much money in specific people’s hands for there to be a reset. They can just buy everything at any price. They public still can’t compete

[@gyorgischwartz]

Those buildings depreciate $0.13 each second from time and weather alone.