The Office Real Estate Crunch!
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- Опубліковано 1 бер 2024
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Office mortgage default rates are rising around the world which could mean problems for the banks, insurance companies and pension funds who lent money to real estate investors.
Let’s discuss the distressed sales of office buildings that have been happening over the last few months, why New York Community Bancorp is down more that 65% year to date, what banking regulators are saying about loan portfolios at large US banks and how banks are hedging their loan books.
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Papers Mentioned:
Monetary Tightening, Commercial Real Estate Distress, and US Bank Fragility: papers.ssrn.com/sol3/papers.c...
The Secular Decline of Bank Balance Sheet Lending: www.nber.org/papers/w32176
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Maybe banks can bundle bad commercial mortgages into a product, let's call it "subprime", and sell it to retirement funds.
Every time I saw the title today I kept thinking it said "The Office Real Estate Church!"
@PBoyle Patrick, could you please do a video on lessons you've learned about the markets as a trader?
I am sure Adam Neumann's new company ''Flow'' will solve all the problems in the real estate sector. I heard they are installing not 1 but 2 coffee machines this time.
The new beer fountain will run on AI, to auto release the amount of beer you need based on your consumer data
and don't forget they will have a APP!
Don’t forget the kombucha 😉
And at least one cocaine fueled party per week
@seansillah2703 it will also need to be connected to the internet and have a monthly subscription
Q: How do you identify someone who has investments in office properties?
A: They will demonize working from home.
Works even more with people with Bitcoin
That idea never made sense to me. I cant imagine any person powerful enough to call the shots in a company would sacrifice their company’s success to marginally improve their commercial real estate holdings.
They would almost certainly have more of their net worth in the company they make executive decisions for than they would in real estate.
@@youdontknowwhoiam2449 they prolly own office reits
True, except the government has tremendous office space, and they all work from home because “it’s a pandemic.”
@youdontknowwhoiam2449 You're assuming those companies' value comes from the labor they perform rather than the book value of the assets they nominally own. This is a foolish assumption in a system where the most optimal rail or airline company is apparently just a bank with standardized livery.
If you want to know how empty an office building in NYC is, in the morning count how many blocks you have to walk to find a coffee cart. If you have to walk more than 2 blocks, that building (and probably the surrounding buildings) is (are) largely empty.
I work in Manhattan and this is a good barometer.
As someone whose never been to a large city that is interesting to know
@@thewick-j1837 Yeah city workers are spoiled by convenience. They won’t walk more than a block or two for a cup of coffee. Especially in a northern city with cold winters, and turbulent falls and springs.
It's impressive that a NYC coffee stand owner knows more about what's going on with commercial real-estate than most Americans.
Insight no AI could generate 😉
I never understood commercial real estate prices. A lot of office jobs in nyc payed 60k a year. Yet the company picks an area in Manhattan none of their workers could afford to live in. Boss probably paying 100k+ a month for the big midtown office. Overpaying on their lease for the convenience of a longer commute for everyone. Just for everyone to work on their computers via phone calls and email anyway.
Might be trying to project success to clients with an expensive office. I wouldn't even be surprised if it makes financial sense due to the extra business from people believing it.
its usually cos majority of the clients are from that area which the company rented the office. depending on the industry, the company office address may b part of a marketing strategy to improve client confidence that the company is situated in an expensive and affluent part of city. if we, workers hav to be miserable so that the company can run profitably, then that will be the path the company chooses. 😂
@@somethinglikethat2176 yes exactly it's all for show.
Much of the cost is in the land itself. In key locations it WAS in short supply for big office buildings where they could more efficiently meet people and send/receive mail, but those days are over because internet. There was a time when city centers were dominated by factories.
I worked for companies who've open offices in cities just to have near client presence. It's really dumb. All our other competitors decide to move their office to an affordable suburb with actual parking and/or utilize hybrid schedules.
I’m a solo architect who has done office buildouts and alterations within a 1 million square foot triple A office park for almost 20 years now. My business has dropped off almost entirely. I’ve not seen it as bad, worse than even the 2008/9 crash. These premium office parks are obsolete as nobody wants to pay top rents for 1/4 of their staff to occasionally come to the office to work. I’ve finally decided to leave this aspect of my business and focus elsewhere as the office scene is dead.
I know someone locally… they are preferring to leaves places empty (this is mostly retail/mixed use) rather than lower rents because it would mean the valuations have to be admitted to be lower and the write downs will hurt everyone. It is a house of cards right now.
You could argue, Capitalism itself has always been a house of cards…
@@theIdlecrane You can argue anything you want, there are people out there arguing the Earth is flat.
Prices need to come down when pay isn't going up.
@@ahmataevoThat’s not the issue here.
It's just current market conditions, commercial rent got too greedy is the biggest factor, now its adjustment time after the "once in a hundred years" pandemic event which has given businesses a wider model of office/ home environment in part due to better technology, it does not mean that the office environment will stay as it is now, it could easily revert back to office only if production drops, which is looking likely!?!
I like how efficient the shade was. He managed to throw it at Bank of America, shitty accounting practices, and chatgpt all in less than 3 seconds
I feel like the entire video was just created to set up that bit!
I dislike the phrasing of "Workers have been reluctant to return to the office". A better way would be "Workers realized that going to the office was unnecessary"
Get back to work you bum
They also realized that the people telling them to go to offices are unnecessary. Managers in office jobs don't DO anything. Even if you're in a job with enough corner cases to need someone experienced to ask advice on, you can just email, call, text, facetime, etc them. The only thing you lose out on is the ability for managers to gloat about their power and wealth in person, waste everyone's time with pointless meetings, and feel powerful and special by looking over everyone's shoulder.
Managers have been made redundant. This TERRIFIES them, and that terror is singlehandedly propping up the most worthless real estate in the world.
@@Frommerman they have always been redundant. they were a way for owners to distance themselves from employees and take the blame for all the shady stuff, its just a complex way to create deniability.
This realization was socially engineered using Marxist liberation theology. I disagree as there are many benefits to going to the office. I have been a telecommuter for 10 years and if I could find a position where I live in my field, I would be happy to go to the office.
@@CJ-gv6bq do you think using a right wing word salad makes you cool bro? and telecommuter is such a boomer thing to say.
If you take a shot everytime Patrick blinks your liver will heal itself
Did he even blink once? lol
He 'half blinks' a lot ... also noticed his brow is raised considerably, indicating he's intentionally keeping his eyes open wider than normal.
Editing saves lives.
Patrick's glasses create a humid microclimate that reduce the need.
Some people edit out their eye blinks. It's real.
"bad property debt today exceeds reserves at the largest US banks." yikes
he said in the video most of this was shadow banking.
@@samsonsoturian6013Phew! That fixes everything 😜
Wowwwwwww. 50% occupancies. No wonder they are becoming so nasty about RTO in NYC.
State and Fed agencies also getting nasty.
Which is crazy. If offices cannot be demonstrated to materially improve worker efficiency (and in many job roles the evidence that the office does is scant), then the Fed has no business wasting money on them. I worry about governments wastefully pushing RTO as a quiet bailout to commercial real estate investors.
@@beojack4592 That is absolutely the case, at least in my country. Source: One of the bigwigs of the gmnt dptmt I work in said the quiet part out loud by mistake in an email early in the RTO period.
start converting them to mixed residential commercial use. they created the zoning environments with their lobbying, they can uncreate them with them as well. it only makes sense.
@@beojack4592 In the finance industry, everyone learns by looking over each others' shoulders. You can't do that in a work from home environment. There are, however, other industries that benefit much less.
The thing I really love about your content is that you dig in on the issue, show the data, and explain how it is applicable through clear explanations. So many financial outlets, including financial reporters, speak so narrowly about a specific situation instead of the broader impact and reasons. It's a clear indicator that you're truly an expert in the finance space, thanks for sharing it with us!
Who else you follow?
Patrick can drop a rap album, generate billions in sales and bail out the commercial real estate sector if he wants to.
Cities are always changing. Office buildings knock em down and build housing and entertainment districts so Drum and Bass can return.
I like where this comment starts and love where it goes.
D&B never left
Just went underground @@kenon6968
DnB will never die
That's house not drum and bass.
going to the office is not going to work people have realized they been wasting time commuting then start sending emails to each other.Small companies have realized they can spend less on real estate for only staff needed in the office and use the other money for expansion.These buildings where over priced anyway
LMFAO! This is why all work is moving to Costa Rica, India, etc… They’ll actually show up to work.
@@tonycrabtree3416 doing work is more important than showing up. I'd rather have the customer service i call be an american working from home in his pajamas than an overseas counterpart sweating in his suit in his office.
I believe you. But why are companies in the US forcing employees return to office?
Because they don't want their office to lose value. Managers can't micromanage employees either.
@@masteryoda9044 Because it is a job?
Repurposing office space as housing is much harder than a 5 second great idea might suggest. At the very least, infrastructure like HVAC and plumbing (especially this) are designed and engineered for office buildings much much differently than in residential structures.
A bigger issue is floorplates
So what's the alternative? We leave all that commercial space empty forever? Everyone returns to the office 5 days a week? At some point the hit has to be taken, the sooner it starts the better it'll be.
Yes, but empty buildings have even less value than converted to real estate. Longer these building remain lifeless more likely entire city will turn into decline, because new cities will be built elsewhere that embrace paradigm shift. We already see growth in smaller country towns because people try to avoid high housing costs and long commute to office. Sooner or later city government will have to do something with the empty office towers and attract people to have at least some use of them.
@@vb8801The abandoned and dilapidated office buildings and factories in Detroit and other long industrially and economically gutted Midwest/Rust Belt cities would be evidence that even significant capital investments like large buildings can be abandoned, if there are no financial incentives to holding it.
But I do agree that local city governments and the federal government should be investigating the viability and possible non-viabilty of repurposing troubled commercial real estate now, and having processes and resources to expedite their findings at least ready to go as proposals. Not least because of the Detroit ruins phenomenon, which unchecked can hinder a city's reputation and ability to recover as quickly and strongly as it otherwise could.
@@vb8801 oh of course I agree that it'd be good to do something with all that space. I simply meant that unlocking the doors and inviting people in doesn't really get you very far. Whether it'd be cheaper to convert a typical office building to residential vs. tearing it down and building new housing, I don't know; one would imagine it being cheaper but it's definitely not my area of expertise.
bwuh. whenever I hear "problems for the banks, insurance companies, money people, etc." they're just gonna find a way for the public to shoulder the costs of their greed and mistakes.
You would. Fucker, delusions of greed from vague entities is proof of greed in yourself
I worked in a growing comoany. They took out a lease on new office space at the end of 2019. In 2020 they cut 3/4 of the staff coz they committed to the lease. Now they ain't growing any more and are a distant partner to my new dream job company. They have the gall to use the pictures taken before the pandemic crisis of everyone doing well and being happy as part of the corpo culture page for their company knowing full well only 10% of the people in those pics still work there and only 1% like it
Sounds like they weren't making money to begin with.
The thing is there isnt a primary/functional reason to return to the office for job function directly. Every reason is secondary, real estate value, taxes, assisting other local businesses, but nothing direct to most jobs itself.
At least not to that extent. There are still networking events, difficult topics to discuss, etc. But that doesn't require a 5-day office space capacity.
As remote work becomes the norm, wait until they figure out that they can only start hiring globally from now on and save between 50-90% in peoples salaries with similar skillset compared to the US workers.
Wait, are you suggesting outsourcing like it’s a new thing companies never thought of before? I… don’t even know what to say. Wow.
I disagree. I collaborate better with my colleagues when they're in the office. We get more and better work done.
@Patmorgan235Us
I disagree. I collaborate better with my colleagues when we're working remotely. We get more and better work done.
Prices for commercial real estate were artificially too high driven by investor speculation, overbuilding in the market space, and loans underwritten with too little collateral to justify loans value.
"I just don't believe ChatGPT will ever reach that level of creativity. Well done!" 🤣🤣🤣
Screw 'em!!
More likely, Congress will (after enough lobbying money has flowed into their pockets) will pass a Bailout, so these multi-millionaire landlords won't suffer a dime in losses. Kind of like what happened in 2008 with the big banks.
I was thinking the same too but so many pension funds are tied into commercial real estate investments. There will be a ripple effect on the entire market.
offices cannot be easily converted to small apartments due to lacking windows and having weak utilities, but they can be easily converted to gigantic and low occupancy luxury flats. This would allow wealthy residents to upgrade and increase the supply of smaller units for normal people.
you are assuming wealthy people want to move from where they are comfortable and possibly own and try something that might not work out !!!
do you think wealthy people would like the idea they live in a space built for office? They already have too much ego. They can't brag about their new place when people know it used to be a commercial building.
Brilliant idea 💡 ... I like it, better than unused building
Your final sentence seems to assume that wealthy people are currently living in 'smaller units'. Is that likely? Anyway best wishes from a normal person.
There are people who will pay for windowless apartments as long as there is proper ventilation
Haven't returned to the office since 2020, neither have majority of my co-workers. There is simply no reason for it. Let them build what people need, affordable housing not offices.
I think patrick boyle is the first youtuber who aims to have absolutely no frames in any of his videos where you could catch him making a silly face, his gaze is steely af. I cant find a single frame where he even blinks. Its impeccable. Couldnt put my finger on it for a while but hes a consumate professional. Its fascinating to me at least.
12:21 His gaze is off at the end of the cut. He uses the cuts to hide his blinks, edits - which is quite reasonable and clever to be fair.
Investments are a risk, and that includes property. When the market changes, those risks may come home to roost. That's the way it is. I'm not going to feel bad that the work world is changing for the better for once, but that some very wealthy, overleveraged financiers are a bit less wealthy now.
My employer is fully remote and won't be going on-prem. I've declined 5 day a week onsite jobs.
Those who try to go 5 days a week for jobs that don't need it to be productive will have a more expensive time retaining talent.
I'm not willing to make your commercial real-estate paper boo boo my problem.
It’s an investment which carries risk and these commercial property owners want all gains and no risk…well too bad it’s an investment, there shouldn’t be guarantees.
@@frevazz3364that's the funny thing, they want us normal people, to fix their mistakes. And they're the first one to cry when pro normal people changes happen. If a small business tried and failed, it's "guess you just made the wrong decision, too bad." But if it's these high horse mofo's, it's almost always "mommy!! Can you tell those poor people to work from my office space??" It's as if it's really a sin to be greedy with money.
not a good feeling when Patrick mentions the bank I use in his video 😮
I love to hear about corporate America being on the losing end of the stick. For most people, working in an office is just pure stupidity.
Found the slacker
You've slowed your delivery, which is good for me. Prior, my pea brain was having difficulty keeping up. Good talk! Best!
Rich people in trouble? Quick! To the printermobile!
No one cares about these idiots, we're all simply effected by the same factors
OMG, you have a 3d printed "stonks always go up"
I will NOT return to the office
I will NOT be losing my life commuting
I WILL be taking my meetings in clothes I deem comfortable
I WILL be eating my tendies in peace
and I WILL be happy
Unemployed but happy.🤣
Beggars, choosers. Be your own boss then!
Slob
Gen Z?
@ProudToBeBritishF
"Why nobody wants to work anymore 😢"
If there is a single type of person that I won't ever feel bad for them going bankrupt is real estate investors
technically everyone who owns thier own home is a real estate investor
You mean pension funds?
Owning a single home, yes, technically, makes you a r/e investor. But that's clearly not what pizza talks about.
@@uFFFO if your pizza talks to you about real estate investment it's time to find a new pizzeria
yep, I wouldnt care so much if all of us could buy something without being in debt for 30 years if the bank even finds us eligible. So Messed Up.....
Since most big cities already have housing crises, flipping these commercial buildings or even demolishing them and rebuilding as residential can solve this.
We demolished immense amounts of housing and built commercial buildings to enrich the commercial sector. ("Redevelopment") Now we need to demolish immense amounts of commercial buildings and replace them with housing. Unfortunately our governments are much less interested in helping families as opposed to businessmen.
Nice reference to Pyrrhus of Epirus
Here in Australia, the standard for residential buildings are far different from office space. So unless it's a huge building that was designed to be both from the start, it's likely you couldn't convert offices to apartments.
How about bunk beds and pillow forts? If you can’t convert office space into residential, how about dormitories? 😂 This business plan just needs a snappy company name. What do you think about We Crash?
I worked in a UK office block that had poor insulation and windows with permanent ventilation.
Now that block is student accomodation - as far as I can tell it's about 10% bigger with the new windows and insulated cladding.
So yes, your point stands - massive standard improvement needed to become residential property.
@@MarcosElMalo2One upvote isn't enough - yours is an underrated comment.
@@andrewharrison8436 I just want a place to crash, man. The sofa in the common room is fine by me.
@@andrewharrison8436 around 2010 in Los Angeles there was a shortage of affordable rentals. So the city (or maybe the county) loosened restrictions on residential property, allowing owners to rent their garages or sheds to people desperate for housing. It didn’t solve the homeless crisis but it might have kept some people in a rough patch weather it.
But the point is that the local government was quite flexible when it came to providing inadequate housing. I don’t know what happened to all those temporary units. I imagine some were eventually converted into up-to-code living space.
In terms of adequacy, one doesn’t have to rent every single floor or even entire floors. Rent the first 10 floors on a 100 store building?
The argument against this is that the rents wouldn’t offset the interest payments. And that’s where the government bail out comes in. If Uncle Sam is going to protect rich people from their own bad decisions, why not also throw a bone to renters?
It's a disaster cycle in my city. There's no business people walking around at lunch. Ferals have moved in. Now, you'd be crazy to walk around at lunch as a business person.
Nothing like feral ghouls for bringing the local valuations down…
It's fucking depressing. WFH ruined our cities.
I calculated that, for me, each required day of on-prem work per week is worth about $10k annually. Considering my hourly wage against the commute time, wardrobe, transit cost, additional hours of child care, and food.
Even if other workers haven’t done the math, they are still seeing a HUGE financial benefit. Very good talent is hard to get, and employers are not going to offer the compensation needed to make up the difference.
And the employer’s expense is high-furnishings, rent, amenities, and physical services. There are people who always need to be onsite, and others for whom it’s sometime or never. Businesses that fail to strategically cut office expenses will lose their competitive edge.
So the corporates want employees to work from a building so that they and the building owners can repay their mortgages, isn't that really ridiculous and outrageous? Increasing productivity and building better relationships among the employees just seems to be a camaflouge for these corporates real agenda. That's totally unacceptable and should never be tolerated. Corporates must allow Hybrid work model always and never return to that full time office work scenario which existed several years ago.
My employer is fully remote and won't be going on-prem. I've declined 5 day a week onsite jobs.
Those who try to go 5 days a week for jobs that don't need it to be productive will have a more expensive time retaining talent.
I'm not willing to make your commercial real-estate paper boo boo my problem.
Being fully remote is now a major talent retention policy.
@@Gnomezonbaconremote workers are the first to be fired, off-shored or replaced by AI.
@@benjamindover4337 remote or office workers, it depends how much they need you. If you are valuable they won't. If they can replace you, even if you come to office everyday at 6am, bow to your boss and bring him his favorite frapuccino you will be laid off.
is so sad to know that, I just start my life in the work force and right of the bath I am not valuable enough to keep or will be replace shortly by AI....Bro, I just want to live in this world.@@Sick_Pencil 🥲
Who are these goombas in the comments always threatening people with the AI boogeyman anytime workers say they won’t do something?
Why didn't all these failed office spaces just put in the 'free beer' tap? Problem solved.
Throw in an app and we're there.
Re-beer - direct urinal to tap recycling system. Call it Miller Light, nobody can tell the difference.
That only works for people that drink. Ya know alcoholics. A.k.a someone who can't beat his addictions. A.k.a lazy.
Residential conversion sounds good, but it does take a lot of work, since you need to add in all sorts of plumbing and other features necessary for homes that a business does not need. Also lighting can be an issue, making sure that all the right rooms get windows when you have enclosed rooms rather than open plan offices. I do think it would be a good idea to make "partial conversions" though, more buildings in which a significant chunk of their floors are residential, inside an otherwise commercial building. Ideally these could even include affordable housing options for people who work inside the building itself, perhaps with subsidies from the city/state in the name of decreasing traffic.
Sold all my REITS because of this. Don’t mind the loss because I think work from home is the future. Don’t know why ceos failed to catch on and understand that office buildings are significant cost that hurts profits. I think there will be significant edges for firms that go fully remote.
AFAIK they have high tax reliefs when buying/renting offices. They don't want to lost this.
How can CEOs and upper management get away with pretending to do something at work if they are now required to do things that generate a paper trail?
CEOs and pension fund managers are trying to manifest some bizarre reality how they will make money. I was talking to a pension fund manager back in 2020 during lockdowns (UK) and he was dreaming about commercial property boom, cos he thought people will come to the office and "keep the distance", meaning everyone will be spaced out. I told him, it will be the opposite after people realise that they can work and send emails from home. I'm no CEO, no fancy pension fund manager, just a human with 2 brain cells and down to earth. It only shows how those CEO types have no grasp of reality.
Also, if companies are set up for remote work it's much cheaper and easier to progressively replace all the employees by AI... I already have half my meetings attended for me by ChatGPT
Hybrid firms are the future *
Gotta crash another 50% before it makes sense to convert to residential? I can see that happening.
Converting to residential is a long and expensive remodel. You need lots more bathrooms and kitchens and soundproofing, not to mention overregulation
@@samsonsoturian6013 That’s why it makes sense that they need to crash that much. I’m saying I can see things crashing that much.
„Selling securities designed to offload risks from the balance sheet“. Reminds me of final „fire sales“ scene of the excellent movie „margin call“
I just love how the excuse that justifies policy inaction today and in the future, is the policy inaction of the past.
Oh we can't now raise capital requirements because of a growing debt risk growing in the market, because it would have too much of a detrimental effect on bank balance sheets...
The government will step in and loosen credit to banks, thus socializing gambling losses. It doesn't matter if you're the Chinese government and Evergrande building blocks of homes that will never be occupied or even finished, or commercial real estate investors being bailed out by the US Government and the banking system, in the end homes are not built and investment is not available to create well paying jobs. The message here is that reckless gambling in the economy is rewarded and even encouraged.
it was called 5 years ago... no surprise
I can’t decide if I’m surprised by your channel’s medium size. On the one hand you present a very clean delivery and clearly prepare your material, edit, and invest the time necessary to be huge… But on the other hand I’d expect you to be very small because you’re accurate, unbiased, informed, and apolitical. People hate honest guys like that. Hmm. Maybe mid range is just right for you Patrick
Popular media (sports, entertainment, games,…) channels might have more viewers/subscribers but certain less mainstream channels (like stocks/investing) get much higher revenue rates for ads shown so in the end it quality over quantity might work out better.
Stop being so judgemental. Or if you can’t stop, just keep your opinion to yourself instead of putting in comments. Comments are for opinions and anecdotes related to the content , not of it.
@@antpoo😂😂you very much missed the compliments in TheGroundsKeeper's message. He was being facetious and essentially saying it doesn't surprise him that Patrick's channel isn't exponentially bigger because the mainstream media and what the majority of meatheads what to consume does not consist of accurate and unbiased information that Patrick delivers clearly and concisely.
Calm down buddy
Unused commercial real estate could be repurposed as sound studios that can be rented cheaply to up and coming rap musicians.
The word "commercial" should give you a clue . . . . they're not charities . . .
And podcasters. I hear that’s going to be big.
Maybe they can be half studio half prison, saves time when the DEA inevitably comes knocking.
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In the Philippines, office buildings are 98% occupied. Retail spaces, malls, restaurants are full of people. However, stock prices of real estate companies in the Phils. are in historic lows because foreign funds had been exiting these stocks due to their negative perception on real estate. There is an investment opportunity here because the PE ratios of Philippine real estate companies are in the 5's but they have been growing 40% year after year plus there is the expected cuts in interest rates.
Yeah, well, it isn't advantageous for a foreigner to buy property in the PI. Well, unless you want to marry a Filipina.
@@makiavelli6101 I was suggesting to take a look at buying the stock of Phil real estate companies, not actually buying land.
I sure am glad the developers in Palm Beach County decided it was a good time to knock down the downtown movie theater and comedy club to build office space. What a 9000 IQ investment they’ve made
I calculated if i go to the office three times a week I spend 18 hours (45m each way) a month commuting to and from work.
same here
For real. For a lot of people commuting is like an additional part-time/mini job, if you add up all the hours spent commuting. Just walking dogs for the same amount of hours would already bring in more money than most on-prem jobs for my position could offer me. It literally makes no financial sense to go back to the office, even if I loved being there.
Yes, but a lot of people have to physically meet people in the office.
It is not just Office Space, but Regional Space as well. Add to this the "Corporate Landlords" who have bought masses of Family (Domestic Residential) Homes. They cannot find tenants willing to pay 50% of their income in rent. They paid prime prices, and will have to take a haircut, to sell.
Patrick you are the bomb, you make me laugh and educate me at the same time, thank you.
He's like PeternGriffin
YEAH! Austin made your office space B roll !!!
Great reporting. Thank you for making sense.
We SRT owners will be outside your bedroom window at 4 AM tomorrow.
12:50 When Patrick tells you "Well done!" in that tone of voice, you're probably gonna get sued or fired. Might as well start packing things up.
There is no way to fix any one aspect of the system without the entire thing unraveling. People need to accept that a big hit to their lifestyle is unavoidable. The longer we try to prevent it, the worse it'll be when we're forced into it.
Downtown San Francisco has a huge number of vacate office buildings and office spaces. The number continues to increase. A large property managment company here has defaulted on their loan of a portfolio of expensive apartments here. Thank you for this video.❤
No one loves leverage more than Real Estate Investors 😂….
Patrick Boyle
"Seriously, folks are sleeping on Patrick's channel! With the incredible content he's churning out, hitting that 1 billion subscriber mark should be a piece of cake. It's high time everyone wakes up
Thank you for the very informational content Patrick!
16:35 You had me here. Cherry on the cake. Good understanding. 👍
Thank you!
I can’t find any empathy in my heart for commercial real estate owners about to go bankrupt. No bailouts this time, either.
Excellent overview and links to papers, thanks a million!!
I am happy home office is a better solution now. No more constantly annoying bosses or commuting.
I love the dry sarcasm of Mr Boyle. Wenn he says "well done", it is like the ultimate judgement, damning whomever he's talking about totally to hell 😂
I learn a lot from his channel. I think he is really neutral and objective, that is so rare
I ALWAYS love your videos and your extremely dry humor 😊
Working in FM in London, the buildings on the contracts I see are 2/3 empty across the board.
Very timely video. With the last CPI print & jobs data, good entry short on some lagging real estate companies.
The funding model of real estate investment is fundamentally changing under this cycle. We can’t rely on yield compression anymore.
I work for one of the large American commercial real estate multi nationals. Old mates comment that it’s primarily the US is absolutely what I’ve seen. EMEA and APAC are doing much better because they were less precarious to begin with. Unfortunately, tremors in the US markets tend to resonate around the world ala the GFC.
Being a little further along in my career, I definitely would prefer to work remote, as I can avoid a long and frustrating commute and also travel a lot more for personal reasons without issue. However, as a junior employee, it would be very difficult as a large part of learning the job was by shadowing various people, have conversations with different folks to learn the industry, and dropping in to listen to conversations my boss or others would be having - all of which is more or less impossible when you work remote. There is a lot more to a first job than just the job itself.
Always great content
Office real-estate problems are a perfect solution to the homeless problem in a moral society.
The collapse of Signa Group has left a number of very large, high profile commercial projects incomplete and in limbo, here in Vienna.
Financial Institutions: Given its finitie availability, perhaps it was a mistake on our part to develop so much land for the sole purpose of commercial office space as opposed to creating diverse income streams from office, retail, and residential space in the same building.
...No, it's the people who want to work from home that are the problem
Great analysis of the financial challenges facing big commercial real estate!
Finished Sunday chores, now kick back with my Sunday droll. Thanks Patrick, you make me laugh inappropriately!
Excellent video. Lots of stats and facts.
That reference to Pyrrhus of Epirus was the most hilarious things I've seen in a while.
These companies don't want to rent these spaces anymore, they're most stick with the mortgages. We just have to wait them out and then we'll never hear this "have to be in the office" stuff ever again. Solidarity brothers and sisters, don't go into that office!
I find it infuriating that it's preferred to have underutilized office buildings rather than turning them in much needed housing spaces just because it's not fully financially beneficial. The city centers are dying. Shops are closing. People can't find apartments at viable prices. Aaaaand let's keep those office buildings half empty, why don't we =_=.
Converting business districts into mixed use neighborhoods is expensive and takes time, but ultimately it will pay off.
Always a delight.
Amazing video.
You're a very good presenter thanks for sharing a fraction of what you know.
I was there during the live stream again. As it’s not publicized I’m somewhat of a Wunderkind. Patrick knows this.
K Street in the District of Columbia is empty, all workers in Union Employees, (non-profits) except for some private lawyers. The DC government is guiding building renovations into over age 55 Residential Homes, "in themiddle of our nations capital.
sooo, let's hope their value will fall further 50% so we can have nice apartments instead of boring office spaces ;)
In the US, there are some compounding problems. A number of companies are finally cutting their corporate levels, this also means less office space. If the company fails to get their losses under control, they will fold, which of course means that they need a lot less office space.
Even without home-office, the sharp increase in interest rates would always be trouble to office real-estate.
Will any rap studios be affected by commercial real estate issues??
My mortgage has gone up well over 100% due to increasing interest rates and I've had to just deal with it.
Why should office building owners get special treatment?
Are you in the US? If so - why is your mortgage tied to increasing interest rates? You should have refi’d into a fixed rate at least a couple years ago.
I'm not American
Love the pyrrhus quote lol
Imagine your name surviving in perpetuity as a term of victory that's really an antonym
In 2 thousand years I'm sure buying a multi billion dollar corporation and through hard work and struggle, turn it into a multi million dollar entity, will be referred to as a "Muskian acquisition"
Not in our country, there is a lack o office space even with the on going construction of hi rise grade A office bldgs. Currently, the country has an 86% occupancy rate. Govt just discouraged work from home, its that simple. Working from home may benefit workers but the economy suffers/ small businessmen who relies on office workers go bust