Working-from-Home May Start an Office Real Estate Crisis - But Banks May Adapt (msn.com) 121
The Washington Post reports that "Since the pandemic, employers — particularly in major cities — have been struggling to get their workers to return to the office, while others have given up and allowed workers to go fully remote.
"That trend is finally starting to catch up with the owners of office buildings in the form of rising vacancy rates and declining property values." Earlier this month, real estate data provider Trepp reported that an estimated $270 billion in commercial bank loans are coming due in 2023 — and warned of the potential for defaults. Office delinquencies spiked in May, signaling a "tipping point," according to Manus Clancy, senior managing director at Trepp. Asked about commercial real estate concerns in a television appearance on Wednesday, [U.S.] Treasury Secretary Janet L. Yellen said she thinks banks are "broadly preparing for some restructuring and difficulties going ahead...."
"If office and retail owners are having trouble generating rental income because people just aren't going into the office and shopping, then it increases the odds that they aren't going to be able to pay back those loans in timely way," said Mark Zandi, chief economist for Moody's Analytics. "That means losses will start to mount on those loans. And because the banking and financial system more broadly is already struggling with lots of other problems ... there's going to be more banking failures." Despite the public debate over return-to-office mandates at major companies, experts say office occupancy will never return to the levels experienced before 2020. In February, workplace data company Kastle Systems estimated that half of workers in the United States had returned, but that figure has stagnated since...
Still, many experts say the worst can still be avoided. The issues have been known for a while, giving lenders plenty of time to consider what to do. Banks can always renegotiate the terms of their loans to landlords... Although cities themselves could be in trouble because of property taxes and budget shortfalls, the financial system as a whole is more protected, said Brookings Institution fellow Tracy Hadden Loh, who researches real estate and cities. "It's in no one's interest to have them all fall into foreclosure at once, because that could destabilize the banking system," she said. "So banks will take what they can get in terms of payment and work through this."
"That trend is finally starting to catch up with the owners of office buildings in the form of rising vacancy rates and declining property values." Earlier this month, real estate data provider Trepp reported that an estimated $270 billion in commercial bank loans are coming due in 2023 — and warned of the potential for defaults. Office delinquencies spiked in May, signaling a "tipping point," according to Manus Clancy, senior managing director at Trepp. Asked about commercial real estate concerns in a television appearance on Wednesday, [U.S.] Treasury Secretary Janet L. Yellen said she thinks banks are "broadly preparing for some restructuring and difficulties going ahead...."
"If office and retail owners are having trouble generating rental income because people just aren't going into the office and shopping, then it increases the odds that they aren't going to be able to pay back those loans in timely way," said Mark Zandi, chief economist for Moody's Analytics. "That means losses will start to mount on those loans. And because the banking and financial system more broadly is already struggling with lots of other problems ... there's going to be more banking failures." Despite the public debate over return-to-office mandates at major companies, experts say office occupancy will never return to the levels experienced before 2020. In February, workplace data company Kastle Systems estimated that half of workers in the United States had returned, but that figure has stagnated since...
Still, many experts say the worst can still be avoided. The issues have been known for a while, giving lenders plenty of time to consider what to do. Banks can always renegotiate the terms of their loans to landlords... Although cities themselves could be in trouble because of property taxes and budget shortfalls, the financial system as a whole is more protected, said Brookings Institution fellow Tracy Hadden Loh, who researches real estate and cities. "It's in no one's interest to have them all fall into foreclosure at once, because that could destabilize the banking system," she said. "So banks will take what they can get in terms of payment and work through this."
Exacerbated by poorly designed cities (Score:5, Insightful)
Re:Exacerbated by poorly designed cities (Score:5, Insightful)
It is way less pronounced in Europe, the only companies that try to force workers back into offices is actually the large corporations that own their offices. Restaurants aren't hit as badly because offices and residential buildings are pretty much next to each other, so if you want to go for lunch, you still can. Often to the same restaurant. Or the restaurant loses the worker from the office but gains the one living next to it who is now also WFH.
Which basically proves what's the real reason behind that back-to-office push.
Re:Exacerbated by poorly designed cities (Score:4, Insightful)
Which basically proves what's the real reason behind that back-to-office push.
If you really want to trigger the corporate real estate hoarders, have the city buy, at a terrible loss to their poor foresight, large swaths of dense urban land. Then simultaneously increase the residential dwelling density, utilities, and viable public transport at the same time making all much easier when you have less unknowns. Even better the new dwellings could have collective ownership agreements like a co-op so that anyone there also benefits from the investments in terms of a long term asset. It would be a huge boost to removing negative aspects of gentrification by inclusivity. Even the restaurants would be happy.
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You know a city that isn't already completely broke that could buy those real estates?
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Missing the point (Score:2)
Buying the real estate takes it out of the tax base. Having to manage it (inefficiently with government employees) is hardly something that is going to improve their books. This is very much not a win for cities in deficit already.
Now if you proposed a private entity to buy them, or alternatively having the government do an eminent domain seizure of the troubled properties and then turn them over to a private manager to run, that could work. But it'd be dumb for the private entity to buy them at the infl
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It could be funded by additional property taxes or by selling bonds like many city projects are. Hell, cities always seem to find a way to pay for sports stadiums, why not this?
Also this could (and imo should) be funded as a general concept federally since they do have the money and put up as a grant program for cities.
Re:Exacerbated by poorly designed cities (Score:4, Interesting)
That's how our "social" apartment building works. I have to admit, I only understood part of it, but the gist is that the city is building this apartment complex and acts as a bondsman for the people "buying" those apartments who take out loans for them. The security doesn't come from the people but from the city, who is also technically the original owner (please don't ask how that works, you get a headache trying to understand our kinda-sorta-shady-but-still-legal social building shenanigans), while the people pretty much do some sort of a "rent-to-own" business, paying off their apartment over the course of 40ish years, with a bit of a premium on top for the city. The risk for anyone involved is pretty much negligible because the bank financing it gets their money, if everything fails from the city, the city in turn has LONG lists of people waiting anxiously for someone to not pay in time, so the city never has a problem if someone can't pay anymore, they just get kicked out with the next person moving in instead (with the person moving out getting their already paid "share" of the apartment paid by the person moving in, who may well refinance that with the bank, which in turn increases the run time of the contract, though people who can just drop the money then and there get preference... it's pretty complicated).
In the end, it's a nifty way how you can eventually end up owning your apartment by the time you retire, which you can then stay in for a VERY affordable price once the payments are done (basically you only pay for utilities, which is a couple 100 a month for living in a 1000sqft downtown apartment that you own and your kids can inherit).
Re: Exacerbated by poorly designed cities (Score:2)
If the city owns the property, the city doesn't pay any property taxes on it.
Asking renters to pay property taxes on property they don't own is a novel way to collect property taxes.
For the city to buy properties inside the city requires the city to actually pay the owners for the property - where does that money come from?
Your plan seems to rely on cities having an inexhaustible source of money, and citizens will want to increase their taxes to help pay for the property.
The answer is cities will have to re
Re: Exacerbated by poorly designed cities (Score:2)
You know a city that isn't already completely broke
Taxes. They are a bottomless pit of revenue. It's like having a forest of money trees next door. Let's start clear-cutting right now!
It's not like the residents are going to move beyond the reach of the revenue department or anything.
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Taxation isn't easy in Europe, you can't just invent city taxes here for no reason. There's actually a pretty complicated move of money between states and federal government and cities, where everyone gets to keep certain portions of taxes and then there's an "equalizing movement" between them ... quite complicated and I frankly never really wanted to look into it because it sounded really shady.
But the bottom line is you can't just tax whatever you want as a city here.
Understanding the US (Score:3)
Essentially, no one wants to be taxed by a city, so they move out of the city limits. COVID made this all easier. That's it.
NYC tries its best to extract tax from commuters - and this is assisted by the fact that a lot of commuters are from neighboring states and therefore the NY state government assists with this. My experience elsewhere in the US is that most cities do a piss-poor job of it and their tax bases are hollowed out by people voting with their feet, and are getting more hollowed out. Now th
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I do. Taxes buy nice things.
My taxes pay for the best public transport system in the US. I love trains. I love not being dependent on a stinking car. And yes, cars stink; even electric ones.
My taxes pay for decent-quality and inexpensive higher education for the public. I love living in an educated society.
My taxes pay for Medicaid expansion and a public hospital system. At least prior to COVID, NY had a much higher life expectancy than most of the US.
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Cities issue bonds all the time to pay for infrastructure improvements.
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Look up the Atlanta Beltline. They are building a strip of park around the city on old railroad rights of way. The project is also buying up blighted property nearby and offering it to developers with strings attached as far as density, walkability, etc. People want to live near the amenities, so it is working out well.
Re: Exacerbated by poorly designed cities (Score:2)
Your answer sounds nice, except the courts, not the elected politicians, would likely stop the seizure of private property.
Eminent Donain requires the government seizing private property fairly compensate the owner, and in many/most situations the government needs a better reason to seize private property than 'somebody else will generate more tax revenue tgan the current owner".
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I am in Europe.
And as much as I like my coworkers, we all agree that we do like working from home and that the attempt to force us back into office 100% will result in 100% of us quitting because there is plenty of offers of 100% home office work available.
We're currently at kinda-sorta-maybe-couldya 30-40% office presence. Which is also what we support because we don't want our company to get the idea that selling that office would be a good idea and we couldn't have our weekly office BBQ anymore. We just
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Re: Exacerbated by poorly designed cities (Score:2)
Trust me gas is way more expensive in Europe than in the U.S.
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That might be the reason our cities are way less dependent on you wearing out your car: Our country has no car industry whatsoever.
Actually, our "socialist" capital (seriously, the socialists ran the show ever since the war) is very big on public transport and the mingling of commercial and residential, with the only exception being any kind of polluting industry that is kept from either of them, but we don't really have any kind of "commercial" district here, offices are pretty much in between apartment co
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Allow me to illustrate what I mean [google.com].
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I frankly have no idea what it's like in America. Then again, I am nowhere near there.
Re: Exacerbated by poorly designed cities (Score:2)
I wonder if I'm the only one left attempting to figure out who the hell you're replying to? As far as I can tell, OP stated be was in Europe? To me it reads like you already had a problem and were waiting for someone to use the "s word" so you could correct them.
Who knows, maybe I'm utterly off base here.
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Germany has a huge car industry and also has excellent public transport.
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Only to a degree; many businesses would not work without the concentration of customers in both time and space. The Taco Truck business might not work if it wasn't for the Kebab Truck next to it, and neither would necessarily work if the revenue was spread over 10-12 hours rather than heavily concentrated over two hours.
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The Taco Truck business might not work if it wasn't for the Kebab Truck next to it
I rarely see food trucks ganged up. Most towns haven't made a space for that (they are usually short on parking, not flush with it) and they have to get space from other businesses. Back in the day you'd have the trucks come to specific concentrations of workers during lunch times, I've worked in a couple of places where a food truck appeared about ten 'til noon. But I guess fuel costs make that prohibitive now.
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I see food trucks gang up. They're not as often roving around to remove business parks solo. Sometimes they all get into the same parking lot, especially the upscale ones (not roach coaches). Not every day, but there are some days of the week when you know that a certain place will hae 4+ trucks at it and people will actually drive there.
Re:Exacerbated by poorly designed cities (Score:4, Insightful)
The banks created this problem by funding office space we didn't really need. It's literally part of their responsibility to determine whether the loans are going to cause them problems because they don't make sense. They should have been on top of this, as it was already becoming a thing before Covid. Instead they knew they could just pretend nothing was changing and expect to be bailed out.
Re:Exacerbated by poorly designed cities (Score:5, Interesting)
You end up that way because the costs of commuting are borne by the employee and not the employer. They don't care what effect having an office in a commercial district where the closest residential property any of their employees can afford is more than an hour away.
Make companies responsible for the costs and consequences of commuting and they might start considering employee convenience when choosing their locations.
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Well, you start requiring that, and then companies start hiring based on how close people live to the office. If the office is in the suburbs, they will then discriminate against people in the inner cities, and vice versa.
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That is a possiblity but also companies might also think about locating their offices to areas with residential housing that is afforable for the wages they are paying, or the companies encourage their local areas to build more housing whereas now they have no reason to move out of purely commercial districts.
It's an interesting idea and I am sure there are positive and negative knock-on effects but it's not like the system we have now is free to negatives, in fact there are lot's of negatives including the
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Well, you start requiring that, and then companies start hiring based on how close people live to the office. If the office is in the suburbs, they will then discriminate against people in the inner cities, and vice versa.
When I interviewed with my current company, they told me where the office was and informed me that employees were expected on site X number of days per week. The company doesn't care if it's a 10 minute walk or 90 minute drive as long as employees are on time. Oh, my company does pay monthly parking for employees. A previous company expected employees to pay their own parking.
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A lot of employers don't get much choice either. They can't pick and choose a location unless they're rich. So they find what they can lease within their budget while also being reasonably close to most of their workers. And if the workers are all in a 50+ mile radius and they want to be central, it means everyone has a terrible commute. Even a relatively short change in distance can make some employees quit.
The companies do care about this, because even their C-level employees have to think about commu
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That's why it works in Europe, where almost everyone is white, and not in America. As Europe becomes more diverse, you should expect to see it change to be more like the U.S. This really is the best solution.
Thomas Friedman's book, Thank You for Being Late, describes a Jewish community near Minneapolis that launched a cohor
Re:Exacerbated by poorly designed cities (Score:5, Insightful)
We were hosting some technicians at my work from Europe (Croatia and Austria) and something intersting about Europe they described was the fact that "white" isn't really a race or group like it is in the US, due to our diversity. Ethnic lines among "white" people are far more pronounced in peoples minds, IE, Croations, Russians, Ukranians, etc, while all "white" people have much stronger opinions about eachother than Americans do, we just have those ideas about black, hispanic, etc. Hell, Roma people iun the US would be classed as "white" but look at how they get treated in Europe.
People are still pretty tribal, it's just a matter of what you are raised around.
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With houses far from commercial areas in most of the US, having a worker stay home means that worker cannot easily go grab a sandwich at a shop, or stop by the taco truck that used to come by the office complex.
Not sure why you say that. It's certainly not true in my corner of the US, at least.
I live in a semi-rural area near a small town (10K people, western Washington state). There are a number of non-fast-food restaurants within 10 minutes of my house from where I can grab lunch. There are also several taco trucks that do a brisk business in the town.
Heck, in the small isolated farming town (roughly 2K people) where my wife comes from, there are quite a few places that seem to do a booming lunch business, from
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I expect urban centers will adapt over time to add more residential and less office. For example, hotels can convert single rooms to suites and rent them out long-term. Overhead would drop as they don't need as much hotel staff to clean rooms every day.
Office to residential conversions are harder because the plumbing is laid out differently, and they may not have enough parking for residents.
In Atlanta we are already seeing more mixed-use development. That puts residential, office, and retail on the same
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And many places are doing that. Many places have decided that new buildings going up should be work-live-play buildings - the building will have retail shops and recreation facilities on the lower floors, and then offices in the mid-floors and residential on the higher floors. You likely won't be able to work in the same building, but perhaps within walking distance is your office, and also within walking distance is stuff to do, restaurants, supermarkets, etc.
Thus, "Work From Home" really doesn't have a me
Re: Exacerbated by poorly designed cities (Score:2)
You seem to have a cartoon image of housing in America. People don't need to commute into their office building to find food, they'll be fine. We've had people living outside "the city" for nearly a century.
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Not my problem (Score:5, Insightful)
You don't care about my financial woes, why should I give a fuck about yours?
But don't you dare try to mooch my money for a bailout, useless spongers!
Re:Not my problem (Score:4, Interesting)
While I agree, the problem has quite widespread economic impact. Most landlords operate based on cash flow rather than equity, so they refinance regularly to pull out equity and maximize depreciation. This might be a stupid business model, but it is fundamental to how the US real-estate market works, and it does provide some liquidity in normal times.
My old (business) landlord can rot and whatever, no stress to me. They did a piss-poor job of reinvesting in their properties to make them better for their tenants, and instead focused any capital expenditure on being more flashy. A few of the buildings in their very substantial complex should have been converted to residential a long time ago. Instead they converted light industrial spaces into creative offices so they could command a 5x increase in rent (and easily finance the projects). That drove up vacancy rates even before the pandemic, and now it is out of control. The building my client leases now has a single-digit occupancy rate, and despite being in what was a very desirable area they have few prospects for new tenants, especially at the rates they need to be able to re-finance. We have only paid ~20-30% of our contracted rent due to the issues over the past year... and they are fine with it.
These types of landlords need to take the first (substantial) haircut and be forced to put in additional equity for the individual properties. Then the banks can take another haircut to cover their losses. Agreeing to the formula is really the challenge though. The property will then be reallocated to viable uses at viable market rents.
Re:Not my problem (Score:5, Insightful)
Welcome to capitalism, the market changes and renders your previous business model unviable. Adapt or go broke.
If you end up with a lot of office building foreclosures, i'm sure others will be happy to buy them up cheaply and convert them into residential properties for which there is still very high demand.
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I'm also not here to prop up their failed business model. If your business model sucks, you shall perish. Welcome to capitalism, ain't it wonderful?
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Be careful what you wish for; stability in the economy has huge advantages. It isn't that the real-estate market has failed per-se, but that a specific segment has failed for now. "Bad" failure ends up with more concentration of wealth.
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That is exactly what they are holding out for. They have millions of homes on the books in foreclosure they are holding on to. Might as well hold on to all the commercial real estate and release it all at once. Shadow inventory. Then claim incompetence and get bailed out, again.
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Without going into detail, but the very LAST thing a bank wants is a foreclosure. They want you to have that Damocletian sword hanging over your head so you keep paying, but you'll have noticed that they'll be incredibly accommodating, deferring payment, letting you just pay interest, giving you any chance to avoid foreclosure. Because the only reason they'd really want to do it is when they see you can't pay and you never will.
Because that damn piece of real estate is a fucking albatross around their neck.
Re: Not my problem (Score:2)
but the very LAST thing a bank wants is a foreclosure
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Why? Banks don't sit on mortgage paper. They securitize it and sell it off within weeks. The buyers of the safest tranches of loan paper (CDOs) don't care either. Half of the loans could default and they'd still get paid 100 cents on the dollar.
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What do you think is less work for a bank: Having you work your ass off to keep your payments going or having to somehow monetize that pile of bricks and mortar they now have to deal with?
Banks don't want your real estate. They want you to have it because it lets them hand out loans that are cheap to them, but they sure as all hell don't want you to default on that. It means work that they wouldn't have to deal with if you did it instead.
Re: Not my problem (Score:5, Funny)
But don't you dare try to mooch my money for a bailout, useless spongers!
We could use a sort of UBI to have homeless people spend several hours a day attending meetings at those companies mandating a return to the office.
People would get nice food and drinks, catering businesses would be supported, offices would look busier and homeless people would have good opportunity to socialise with extroverted office workers.
I'd be super happy to join such meetings remotely.
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So useless people will spend all their day going from one meeting to the next, stuffing their face with little, inedible catering kibble, doing pretty much nothing of value but considering themselves valuable?
In other words, we replace pre-epidemic managers with post-epidemic bums.
Re: Not my problem (Score:2)
Whatâ(TM)s the difference?
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The bums don't try to validate their useless existence by keeping me from doing my job.
Narcissist bums (Score:2)
I'm sure there are a few, which would be indistinguishable from managers.
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The difference is probably that nobody would fire me for kicking them in the nuts and telling them to fucking mind their own business.
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Sounds like an improvement to me.
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Not directly your problem. But we don't live in isolation. When enough "other" people suffer financially, including other rich people who own office buildings, those difficulties don't stop with just those people. Those building owners employ a lot of people to maintain and administer those buildings. Many businesses, like restaurants and shops, have depended on business from office workers. It's not just those billionaires who will suffer.
With all that said, I'm still not all that concerned, and I still wa
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I'm not too worried about these people. Restaurants already have a very hard time finding staff, so if a couple of them close down and free up some staff, they should very easily find new jobs quickly. Maintenance crews are hardly one-trick-ponies and it shouldn't take long to retrain them to work different jobs.
Frankly, I don't worry too much about the workers themselves, we're in an economy where a lot of people retire and the job market is hardly contracting, leading to a rather heavy shortage of workfor
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Of course you're not worried about *those* people. Those are *other* people.
Sure, restaurant workers may be able to find work in another area, but that area will likely be much farther from home.
In any case, these were just examples. There are many kinds of workers that support office staff. Not all of those jobs will be so portable. And ANY time you have a widespread reduction in any area of business, it has downstream negative effects.
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Not necessarily. The way offices, residential buildings and restaurants are distributed across towns here, i.e. fairly evenly, means that the old restaurant is probably about as far as the new one. And with our public transport system being cheap, fast and reliable, it isn't that big a deal where your work place actually is in town.
A friend of mine used to be a waiter pre-covid. Lost his job when all the restaurants closed, he's now working as a salesperson for an optometrist and he wouldn't go back for any
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You're right that people don't like change. Just as with every single other major shift in civilization, people will have to adapt, and they'll do it, even if unhappily.
In the US, businesses and residences are NOT evenly distributed, but clumped together. So a business district will have no residences, and vice versa. And public transportation is sparse and cities are sprawling, often making it necessary to travel long distances to work. Before work-from-home, I used to regularly drive an hour each way to w
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I wouldn't. But I'd sure prefer it to living in a homeless shelter where privacy is nonexistent, and I'm fairly sure a lot of people who do just that (or worse) would so, too.
And since these buildings are usually far, far away from "normal" residential buildings, I guess the people living in those areas wouldn't mind too much.
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I fail to see the difference to how bankers treat the "free" money they get when they lost their gamble.
Well, maybe it would be cheaper.
Worse when they own the building (Score:2)
When the employer outright owns the building they panic even more; nobody wants to own a useless building.
It causes business owners to be a tad biased on the whole "return to the office or not" question.
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Please realize that this IS the whole reason why they try to cram you back into the office. They own the offices and they own the restaurants around them, both real estate values plummeting into the ground if they become so blatantly obviously worthless.
And shareholders do not like that one bit, they will want the CEO's head for that.
This is why excessive leverage is a problem (Score:3)
During good times, a lot of investors borrow tons of money so they can...make more money. But when there's a downturn, they find out why too much borrowing is a bad thing.
In both personal and business finances, it's a good idea to keep debts low, and sock away money for the down times, which WILL be coming we just don't know when.
Crisis (Score:2)
Lower office prices sounds more like an opportunity than a crisis. Didn't hear real estate people complain when their 'investments' went up in value. If it can go up it can go down too.
who, precisely (Score:3)
...didn't see this coming since 2020?
It's 3 YEARS later.
Any "professionals" in the field who didn't anticipate and brace themselves for this deserve fully whatever they get. (It doesn't REALLY matter some we know federal (taxpayer funded)government assistance for an industry that's "too big to fail" incoming in 3....2....1...).
What I also predicted and what has sadly also come true, is that all these companies that are bailing out of their expensive commercial leases and saving themselves now million$ per year because everyone would rather work from home ARE NOT GENERALLY COMPENSATING PEOPLE FOR THOSE HOME WORKSPACES.
Effectively, the companies have outsourced their real estate costs to their employees. Which is bullshit, if it's mandatory.
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Is compenation for home workspaces a thing? I understand people put some money into offices but do companies do more than say provide a computer?
Remote workers can take their ISP bill of their taxes but outside of things like that I have to imagine the money saved from commuting, lunches, time spent at home, etc etc more than makes up for any costs they incur.
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It should be.
If company X pays $Y for Z square feet of workspace per employee, if the company gets rid of the office option*, and those workers instead have to commit some amount of their home space to do the work damn right there should be compensation.
(There is a tax break in the US, but it's pretty narrowly defined that it must be only-work-space; if you have an office for work at home, but you play computer games in the evenings at that same desk, it's not deductible...)
I run a small office of 7 people.
Crisis? (Score:5, Insightful)
They've lost a lot of service businesses (Score:3)
I work for a major consultancy that went aggressively WFH and still is except where clients demand we're in their spaces on a regular basis. There is no way in Hell we're going to voluntarily drop the WFH culture because our C suite figured out how to reduce costs at a rate faster than we reduced our billable rates to stay competitive. They'll drag us all back into corporate offices over our CEO and CFO's dead bodies because that will be the end of our multi-year trend of making more each quarter.
There's a Manhattan project waiting (Score:2)
I know office space isn't easily converted to residential space, but I'd still love to see one major office building converted into a mix of residential, light commercial, and farming. A little island arcology experiment in the middle of a city.
I have seen this (Score:5, Insightful)
I saw this first hand in the job market. Companies are trying to fill offices, especially in areas I personally don't want to go.
Many have received tax subsidies to host so many workers in cities, where they are unable to fulfill those obligations. (This is important):
Pro-tip: Many of the job postings are "fake", many of those are to fulfill obligations to cities saying: "we have opened 100 positions in Remote Town, USA, but could not find any eligible candidates". In one case, I had an internal friend reach out to the "hiring manager" of that position. Guess what? There was no position that the manager knew about.
This game of "house of cards" will continue until the reckoning will come. Workers are definitely not keen on returning to packed cubicles and having hour long commutes. So get some popcorn ready for the ride.
That's a problem (Score:5, Insightful)
"If office and retail owners are having trouble generating rental income because people just aren't going into the office and shopping, then it increases the odds that they aren't going to be able to pay back those loans in timely way," said Mark Zandi, chief economist for Moody's Analytics."
That's a problem, but I fail to see how it's my problem.
"It's in no one's interest to have them all fall into foreclosure at once, because that could destabilize the banking system," she (Tracy Hadden Loh) said. "So banks will take what they can get in terms of payment and work through this."
Exactly. If I, for example, overpaid for real estate and can't make the payments, no one is going to swoop in and bail me out. I'd have to sell at a lower price, because that's just the way the world works.
In this case it's the banks and not me, and for once in their lives the banks will have to face reality and take what they can get.
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The government should bail out the people who have money in those banks and not the banks themselves.
In my country, the government automatically insures all bank accounts up to 100kEUR. If the bank fails, you get the money you had in it. The bank itself and its shareholders do not get a bailout, it just goes out of business like any other company.
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Except you and I both know that massive real estate losses will spur those companies to direct their teams senators and congressmen to save them with taxpayer dollars.
It happened last time, in fact.
I don't think they have a choice (Score:3, Interesting)
I saw something similar when the entire dungeons and dragons community came together to give wizard of the coast to the middle finger and they were forced to back down. Reddit tried the same thing but they didn't have complete solidarity so they got picked apart gradually.
Moral of the story is that collective bargaining works. It gets you what you want.
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Banks will adapt, or die, or be acquired (Score:2)
That's how capitalism works.
And the truth comes out (Score:2)
All these years they've been dragging people into the office not be because they needed them to be there, but so all these groups could profit off commuter misery.
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Sounds like bailout o clock! (Score:2)
Heavens forbid the banks have a hard time or slightly less crazy gains, sounds like bailout bonanza is on the horizon!!!
But Banks May Adapt ... (Score:2)
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Miserable open offices (Score:2)
Banks have adapted (Score:2)
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If the banks and other entities that hold all these loans were willing to accept modifications to the loans such that the landlords could lower the asking rents, maybe the landlords would be able to find people more willing to rent their space (especially retail spaces)
Turn office into residential dwellings? (Score:2)
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I Would Like To Return To The Office Occasionally (Score:2)
I am a software/data consultant and when I started in this role I expected to travel all the time to work at client sites. Clients expected it.
After the pandemic lock-down now all my work is fully remote. Clients have learned that they get full value without paying for travel expenses.
Some remote work is good, but I would actually like to go to client sites occasionally (if they have them).
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I have a hunch that this time this might cause a rather unpleasant political backlash. We're at the point where doing anything unpopular is immediately being painted like trying to become Hitler in the eyes of the political enemy, and this is certainly VERY unpopular, to see fat cats being bailed out while the average American is losing their home and living in a car.