Remote work has created a Real Estate Black Hole

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Whoo, many scary stories out there when it comes to commercial real estate. And you know this already, if you’ve been listening to this program, commercial real estate space experiencing stress following the problems in the regional bank sector. Oh, boy. CMBS storm unfolds as delinquent office loans hit five year high. It’s getting worse.

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Instead of better. What does this all mean? No, first, this is funny. I again, I lived in I lived in Manhattan for 10 years. And one of the things about Manhattan was it was just the energy that you could kind of if you if you felt it there, it was just a lot of hustle and bustle and people moving here, there and everywhere and crowds. And again, not everybody likes that.

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But there I am today. I’m at Sixth Avenue Fox Business. And right up the street from there, you have Radio City Music Hall, Rockefeller Center, right around the corner, Midtown, all office buildings there everywhere. I’m looking around. I’m out the window. And commercial break, looking down, and I’m like, where the hell is everybody?

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Where is everybody? It didn’t, it looked like a downtown of almost like a mid-level city. I mean, a mid-level city. I mean, by population-wise. Like you’d see people mulling about in maybe Charlotte. It wasn’t, there was no energy to it. Streets weren’t even crowded with cars to cry in a lap, and there’s Sixth Avenue. It’s as plain as day. And…

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These jobs are not coming back. Martha Stewart went off on a ramp last week talking about the need to get everybody back in the office. Good luck with that. Because again, you’ve got people that have gotten used to attending their kids’ ball games and not having to spend so much money on dry cleaner and saving money on their commute. And again, it works for some businesses, some industries.

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You are starting to see now some certain tech companies out there wanting people to be back in the office. Some three days a week, some five days a week, and you’re seeing pushback from that. And again, that’s up to the boss. The boss wants you in. Yeah, I suggest you listen to the boss. If not, go find yourself another job. But again, it’s going to get really, really bad. However, OK, people are worried about the.

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know, it’s another going to be another financial crisis. No, they the big banks, they know this is coming. They’ve been setting aside for loan losses. Again, there’s going to be really need to get start having to rethink some of these urban cores. Many of the buildings I was looking at the buildings in and around Fox News is building there these office buildings that there’s no lights on. Couple lights on here and they’re just dead.

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And these are buildings that are the size of a city block. And because of that size, you can’t turn these things into apartments. No way, no how. Wrecking balls is what I’m going to suggest. What’s going to have to happen? I mean, the reality is that the land is valuable underneath these areas. You’re going to have to start rethinking these cities.

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Because with the technology that we have today, things have changed. I know some mayors out there trying to shake down certain businesses, please bring your people back in. They need them. Again, you think about the domino effect of this throughout, it hits everything. Again, 6th Avenue, Manhattan, okay? Super busy street, boom.

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Radio City Music Rockefeller Center all these businesses you should see all of the sandwich places in lunch places that were shuttered Shuttered again, I remember, you know you walk down 6th Avenue Especially when people were heading to work early in the morning. It was your mom shoulder to shoulder busy Nah not anymore and good luck with trying to get that to come back. Anyway, Watchdog on wallstreets.com.