Weekly Reminder: The economy is great, inflation is fake and gas is cheap.

vantexan

Well-Known Member
friend around and find out. The properties in question were never meant to be payed down or off. These properties are refinanced every few years and their equity is used to invest in more. Notes are written as interest only payments with the ultimate goal of building a huge property portfolio. Borrowing from Peter to pay Paul only to use Paul to borrow from Peter.
Except now those commercial buildings don't have enough office space renters to make their mortgages. The banks are going to be left holding the bag. Can't refinance buildings that don't produce enough income.
 

Up In Smoke

Well-Known Member
Except now those commercial buildings don't have enough office space renters to make their mortgages. The banks are going to be left holding the bag. Can't refinance buildings that don't produce enough income.
Perfect. Call the loans, seize the property and liquidate. Win, win and win. Tax loses are a beautiful thing.
 
It's called free market capitalism.
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If that worries you, let's shut the system down.
bro put down the ayn rand, we haven't had a free market system in a long, long, long time

i'm 99% a permabull, but your posts are next level paul krugman-tier gaslighting
 

Up In Smoke

Well-Known Member
More than 60% of all businesses operate without making a profit and 50% of publically traded companies are unprofitable. Somehow the sky isn't falling.
 

vantexan

Well-Known Member
Perfect. Call the loans, seize the property and liquidate. Win, win and win. Tax loses are a beautiful thing.
Liquidate? Who is going to buy property they can't rent? You are aware that a lot, and I mean a lot, of commercial buildings have less than 50% occupancy with many much less than 50%? Covid pushed a lot of companies into having employees work from home. They found they could operate just fine doing that and it was saving them serious money. The genie is out of the bottle. "60 Minutes" even did a segment on it a couple of weeks ago but this has been pointed out for over a year now. About the only option seems to be to turn these buildings into apartments and condos. Already happening. In NYC the only buildings that seem to be maintaining occupancy are the prestigious addresses in certain neighborhoods.
 

Up In Smoke

Well-Known Member
Liquidate? Who is going to buy property they can't rent? You are aware that a lot, and I mean a lot, of commercial buildings have less than 50% occupancy with many much less than 50%? Covid pushed a lot of companies into having employees work from home. They found they could operate just fine doing that and it was saving them serious money. The genie is out of the bottle. "60 Minutes" even did a segment on it a couple of weeks ago but this has been pointed out for over a year now. About the only option seems to be to turn these buildings into apartments and condos. Already happening. In NYC the only buildings that seem to be maintaining occupancy are the prestigious addresses in certain neighborhoods.
Opportunities around every corner.
 

vantexan

Well-Known Member
"The sky is falling, the sky is falling."
It's not conjecture. It's an issue with trillions of dollars worth of commercial real estate across the country. The decisions made to shut down everything in the pandemic, pushing companies to purchase equipment to allow workers to work from home, have had unintended consequences that are biting primarily regional banks. This alone could cause a financial collapse.
 

Up In Smoke

Well-Known Member
It's not conjecture. It's an issue with trillions of dollars worth of commercial real estate across the country. The decisions made to shut down everything in the pandemic, pushing companies to purchase equipment to allow workers to work from home, have had unintended consequences that are biting primarily regional banks. This alone could cause a financial collapse.
The real estate will only lose a fraction of it's value and the banks underwrite their loans as required by law. You make it sound like the sheriff comes and padlocks the doors.
 

vantexan

Well-Known Member
The real estate will only lose a fraction of it's value and the banks underwrite their loans as required by law. You make it sound like the sheriff comes and padlocks the doors.
I'm just pointing out what is being widely reported. Loans are coming due and office building owners can't meet their mortgages. Remember the 2008 crisis was based on millions of home owners not being able to meet their mortgage payments. Same principle but this time it's commercial real estate.
 

Next Day Err

Well-Known Member
I'm just pointing out what is being widely reported. Loans are coming due and office building owners can't meet their mortgages. Remember the 2008 crisis was based on millions of home owners not being able to meet their mortgage payments. Same principle but this time it's commercial real estate.
So what's the go-to bet here? You shorting the markets?
 

Up In Smoke

Well-Known Member
I'm just pointing out what is being widely reported. Loans are coming due and office building owners can't meet their mortgages. Remember the 2008 crisis was based on millions of home owners not being able to meet their mortgage payments. Same principle but this time it's commercial real estate.
There are dozens of private equity and real estate investment trusts that are poised to step in and buy these properties when the price is right.
 
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