From the NY Post:
Remote work is cutting NYC office value by half: Study
Working from home is killing office buildings’ worth.
As remote and hybrid work prove to be enduring trends, researchers are predicting grim fates for the future value of New York City’s commercial workplaces.
New York University and Columbia University researchers have updated a 2022 study to reflect new findings that offices will be even more impacted by remote work than they previously calculated.
“We now estimate a more persistent work-from-home regime, which has more of an impairment of office values even in the long run,” Arpit Gupta, co-author of the study, “Work From Home and the Office Real Estate Apocalypse,” told the Real Deal of the revised projection.
The revision comes as post-pandemic rates of workers returning to the office appear to have plateaued around 50%, much lower than many expected.
While last year, in its initial publication, the paper estimated that NYC’s office stock would lose 28% of its pre-pandemic value by 2029, an update this month has significantly upped that number to 44%.
The appraisal is not unique to New York: “The numbers for NYC are not an outlier; we find similar effects across many of the largest office markets,” the study warns.
Nationwide, they estimate this means a loss of $506.3 billion in value, a shift that has significant repercussions for local public finances.
Office stock will not feel the impact evenly, though, with higher quality buildings much more buffered than lower quality offices, which will bear the brunt of the devaluation.
The fallout is already visible, with an increasing number of landlords defaulting on loan payments, corporate tenants reconsidering long-term leases and the amount of vacant office space in the US surging, The Post previously reported.
First
Second
CRE….the sad truth. Guess who pays for these defaults. That’s right, you and I. Only people benefiting from this are the people who are able to keep NYC wages and move to a cheap location. Everyone else gets f’ed. From the people living in cheap locations that now have to pay more for everything thanks to new remote competition, to the American taxpayer who gets left with this socialized cost from the damage it is creating in our cities. Always winners and losers. Somehow, these white collar workers always win by f’ing everyone else.
To start, you should not get paid nyc wages while living in a cheap location. That seriously has a major impact and distorts the entire market. Throw in enough outliers into a cheap market, and you distort the whole thing. Driving up the cost of everything. That’s not cool for the locals who are the individuals that have to leave their house and service these remote workers who are driving up the cost of everything on them. So messed up. Talk about selfish.
From Rest of World:
When digital nomads come to town
The Semilla cafe and coworking space sits in the heart of the upscale Laureles neighborhood in the city of Medellín. It looks as if it were picked up in Silicon Valley and dropped into Colombia by a crane. Coders and digital marketers crowd the tables, drinking pour-over coffee and enjoying loaded avocado toast. Downstairs, in the coffee shop, a stylish woman with a ring light on her laptop chats with a client thousands of kilometers away. Upstairs, in the dedicated office space, an American wearing an Oculus Rift headset attends a meeting in the metaverse.
Most of the workers here are employed in the U.S., but relaxed post-pandemic office norms permit them to work from anywhere. This is the mobile, location-independent lifestyle of the digital nomad. The Semilla is their oasis.
As their name suggests, digital nomads move around a lot. Medellín is one of the latest hot spots to join a global nomad circuit that spans tropical latitudes. Southeast Asia remains the preferred destination for nomads — on popular website Nomad List, four of the top 10 cities are from the region. The list also features less-expensive European cities in Portugal and Romania, as well as Latin American destinations like Mexico City, which share time zones with the U.S. The typical nomad might visit 12 or 13 countries in a year, all the while holding down a corporate job, usually in the tech sector. Of the workers I spoke to at Semilla, most intended to leave Colombia within a month or two.
The nomads I met preferred established, urban destinations with thriving business communities. “Beaches are bad for nomads,” one remote worker told me. “If you can see a surf break, you’re not getting work done.”
Within these cities, nomads cluster in safe and prosperous neighborhoods. Laureles, in Medellín, is a tranquil barrio with a university, clean streets, and middle-class inhabitants. But the income differential between the nomads and the Colombian professional class is immense. The result is runaway price inflation — rents in Laureles have skyrocketed, and restaurants cannot raise their prices fast enough. A one-bedroom in Medellín now rents for the “gringo price” of about $1,300 a month, in a country where the median monthly income is $300.
Grim,
Jesus, these f’ers are so selfish and self absorbed that they are bragging about this move. They don’t even realize their impact on those locals. What a holes. Now columbians will associate all americans with these clowns.
You want localized targeted massive inflation….throw in a bunch of nyc wages into small local community in a poor country. Watch the cost of everything go up. Income inequality through the roof as the locals get pummeled by the inflation.
This $QQQ bear market rally has now lasted 228 days.
The longest bear market rally in 08 was 80 days.
The longest bear market rally in 00 was 100 days.
Personally, I’ve stopped classifying this as a bear market rally since the golden cross on March 13th.
I’m not going to respond in detail but Pumpkin is saying that it is a bad thing that there is more geographic dispersal of high-income white collar americans.
For Colombia, those high income Americans living there is fantastic. They are consuming in that locality and providing unprecedented opportunity for the locals. How many of the Americans are throwing a $10 tip at a taxi driver or waiter or whatever in response to some good service. The national GDP per capita in Colombia is 6,100 USD, so $16/day. Obviously, per capita is always skewed upwards by the extreme rich, so a random $10 to someone in Colombia is equalivalent to like a random $250 or so to an American.
Here’s an example of our tech-driven consumer surplus. I found some entertainemnt value in a 9-year old yotuube video that the WSB put up so long ago about the Kowloon Walled City. This video is available to all of humanity that has access to an internet connection, basically free.
Maybe our housing, dinners out, and other items are getting expesnive relative to wages, but some forms of entertainemnt and education are getting rock bottom cheap.
How many guys out there are making $200k, working hard all day and coming home to a $1M house, but the joy that is driving him (the joy that mkaes it all worth it) is a bottle of craft beer, $1 worth of potato chips, a youtube video or whatever, and the quiet of his living room after the wife and kids went to sleep.
https://www.youtube.com/watch?v=dj_8ucS3lMY
I like this guy’s analysis generally. This week’s question, not assertion, what if we are just getting through a shallow recession and it is starting to fade into the rearview mirror?
Timing of certain stock market events would fit that pattern.
https://ironsidesmacro.substack.com/p/is-the-income-recession-ending
Fletcher acknowledgement:
https://youtu.be/67_hzuhB9qA?t=404
It is difficult to get real data about the amount of net worth necessary to be at any given percentile. Sources vary wildly.
Anyway, the below article is a good touchstone on the different levels of wealth in the US. Nonetheless, even though it was only written in 2010, the amounts of income and wealth noted are just – quaint – comapred to today’s numbers due to inflation.
https://www.joshuakennon.com/the-hierarchy-of-the-rich-in-the-united-states/
Barry.
Staged, most likely a flip, 4bd, 1bth. I think 1bth is a tough sell. How do you determine if you can put a 2nd full bath in the house?
https://www.trulia.com/p/nj/waldwick/109-bergen-ave-waldwick-nj-07463–2006545605
The listing history says this one was listed two weeks so why am I looking at Halloween decorations on the front lawn? They used the same pictures from 10/2021.
https://www.trulia.com/p/nj/oakland/65-monhegan-ave-oakland-nj-07436–1104750900
Listed for 465K; 98K down is 20%. A 3.8%, 30 yr. fixed will net you a $2,700 monthly payment. A 6.8% 30 yr. fixed rate bumps the payment up to $3,560 per month. How are people swinging it? And it’s Ringwood, not exactly around the corner:
https://www.trulia.com/p/nj/ringwood/7-teak-ct-ringwood-nj-07456–2006526263
Then again, the 1bth house above is either already sold or has multiple offers. Who’s kidding who? Four walls and a door results in a bidding war.
$14,500 in taxes AND $375 per month in HOA fees? Get bent.
https://www.trulia.com/p/nj/wayne/12-sundance-dr-wayne-nj-07470–2006553584
$19k a year (and that’s just the start) in Taxes and HOA for a townhouse?
More High-School Grads Forgo College in Hot Labor Market
Share of young people seeking higher education slips since pandemic began
https://www.wsj.com/articles/more-high-school-grads-forgo-college-in-hot-labor-market-c052c773?mod=djemedu
$19k a year (and that’s just the start) in Taxes and HOA for a townhouse?
No wonder why the seller wants out. 6.8% for a 30 yr. fixed to boot. Drop the price tag by 40% and I’ll think about it.
“Why are red states hiring so much faster than blue states?”
https://www.yahoo.com/finance/news/why-red-states-hiring-much-185822971.html
We all know the real reasons: Taxes, regulations and crime is the reason why red states are hiring. Companies are moving to tax/regulation friendly states. The problem is, the red states become purple and eventually the progressives infect these once cost friendly, peaceful, affordable places with their “bud light” woke mentality.
Eddie, Eddie, Eddie… You should read the entire article before you comment on it:
“More perplexingly, we found that faster hiring hasn’t translated to faster job growth. When we ran the payroll numbers, the typical red state wasn’t adding jobs any faster than the typical blue one.”
“”It’s churn,” he said. Those red states weren’t creating jobs faster. They were just hiring more often because folks were bouncing around more. Red states don’t have more layoffs or job openings than blue ones, they just have more quits and hires.”
OC1,
Just leave Eddie alone, he’s on a roll…..
https://youtu.be/ep-xgd_eETE?t=18
Oc1,
I did read the whole thing. That’s why I said, “We know the real reasons.” Liberals create their own narratives to mask their illness.
Good summary of the tumult at the border a few days after end of Title 42 . . . states the moving pieces pretty well (numbers of people waiting and numbers of people walking up from the south, Biden admin’s policy changes, conditions at the border).
https://www.axios.com/2023/05/26/border-mexico-us-immigration-policy
LOL
“Liberals create their own narratives to mask their illness.”
Pot, meet kettle.
And for those folks displaying the rainbow pride lawn signs, it’s okay to display an American flag, too. It’s the guys and gals in the military that are protecting your right to express your freedom so, it wouldn’t hurt to give them a hat tip.
Talk about runaway inflation.
This is the first house I bought in 1975, paid $37,250.00 sold it for around $52,000 , about 8 years later. Lots of memories because my wife and I lived there until we could afford another house( single family).
Check out what it is selling for now: https://www.zillow.com/homes/35-Mount-Olive-Rd-Budd-Lake,-NJ-07828_rb/55562529_zpid/?
How frieking high can these prices go before everything collapses??
Greetings from a Polish wedding! I met my half a bottle quota and then some two nights ago.
When I get back I want to post a link to some shots of real estate I am scouting.
I had a meeting in a primary private school that made Dwight Eisenhower in Englewood look like a shed.
I walked everywhere, it was great. And when I wasn’t walking? Trains, astonishingly punctual trains. It’s back to my regularly scheduled programing tomorrow.
https://www.youtube.com/watch?v=IZgoufN99n8
1:15 heck big fella. You may be ready for the rest home soon.
EX
I certainly am ready for the rest home, or at least some quiet time.
Going two weeks to Manasquan , although my wife invited some friends and of course family will also be there ( daughter and son in law , with kids also rented a cottage there).Wife loves the Jersey shore and happy wife makes happy life.
Then it will be back to the grind… somewhat.
My daughter (14) has a ballet intensive at Joffrey in July. The following are part of the instructions mailed to us. My favorite pert is the last item.
WHAT NOT TO BRING
Alcohol, Cannabis, drugs, tobacco, eCigarettes, Juuls, Hookah pipes, bongs and illegal substances of any nature, or drug and alcohol paraphernalia.
Weapons of any kind. e.g., guns, knives, machetes,
Any product that contains nuts.
part