Commercial Real Estate Crash = Massive Opportunity
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Got some good, no, I got some fantastic news on the commercial real estate front. I gotta pull a little A team. Hannibal, yeah. I love it when a plan comes together. Yeah, this is exactly, exactly what I wanted to see happen and it’s happening right now. Thrilled by this news. The entire commercial real estate market was in absolute disarray. You see it in major cities around the country boarded up buildings in some cases just empty buildings. And it’s been that way for a long time. Been that way since COVID. And quite frankly, nothing’s really been done until now. We’ve gotten our bit of a financial reckoning when it comes to commercial real estate. And that reckoning is price discovery. Price discovery is a great thing. Let prices come down. This is one of the things I
I failed to understand what many people want. Something is in a bubble, something is overvalued. Let the bloody thing sell off, let it come down. will say, look at that, there’s an opportunity there. And then it goes back to the old Benjamin Graham, intrinsic value. What is something worth? Well, yeah, some buildings now mark down 90%. Let me give you some examples.
recited today in the Wall Street Journal. Chicago real estate developer Mark Calabria bought a 485,000 square foot office building for $4 million. 10 years ago, 10 years ago, the building was sold for $68.1 million. Asher Lozato.
Paid 5.3 for the Denver Energy Center after a foreclosure process. That two building complex sold for 176 million back in 2013. this, well, this is not good. Well, it is kind of good for us. You know, sometimes you have to take losses and, you know, we as taxpayers are used to taking losses. Federal government is…
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selling off buildings. The General Services Administration sold a 940,000 square foot building to a residential converter for 24 million. Again, 940,000 square feet. Now, many people out there, many people out there felt that, hey, oh no, look at this. Oh, it’s gonna be worth more. I’m gonna hold on to it. No, it’s not.
No, it’s not. We told you exactly what was going to happen. Now they’re giving up. They’re giving up. They’re tapping out like in wrestling. They’re tapping out at this point in time. There are areas where actually prices on commercial real estate are going up. And again, we told you anywhere that is near major transportation hubs, for example, the office buildings in and around use New York City as an example in or around
Penn Station, which the Hudson yards area and also Grand Central Station doing fine. Do fine. not getting people to take a train from Connecticut, Westchester, Long Island, Dwayzee. You’re not getting them to come into the city and then want to hop on a subway after they taken a train. So it’s a completely different dynamic. Those areas are doing quite well when it comes to commercial as far as the values.
Increasing um What this allowed these price? You know prices coming down is going to allow it’s going to make it viable to do residential conversions again when you have an office building office building the size of a city block You have to do something with the middle of it you have to turn it into an atrium you can’t you can’t have you know, they’re not gonna allow you to have
apartment buildings with no windows, not to mention all the plumbing that has to go and there’s a lot of things. When prices come down, they’re able to do that, which is going to be great for putting more units on the marketplaces, which again, will drive prices down, allowing things to change. This is an interesting one. I never thought of this. Calabria in Chicago is taking one of the office buildings and he’s going to actually turn it into an urban farm. Yeah.
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going to use grow lights and hydroponic farming techniques to produce millions of pounds a year of berries, tomatoes, lettuce, herbs, and other vegetables. This to me is genius, quite frankly, and this should be done in more places. Again, I hope the you know, the FDA and big ag got big ag there. That’s probably not going to be too happy with this. You’re most certainly going to have to pay them their VIG at some point in time. But more of that. I think that’s fantastic.
Right now, we have over 90,000 apartments nationwide that are in the process of conversion. That’s up 28 % from a year earlier, and we need to see more and more of this. is, again, this is the free market at work. Nothing wrong with it. We still have yet to see the full correction when it comes to residential homes.
in this country, which I think quite frankly are overvalued people starting to hold on to them for too long. And I do think we’ll see I think we’ll start seeing prices drop. I for one, I said here, I could care less. I think it’s great to be overall I think it’d be fantastic for the economy. I don’t want I don’t want you know, young families to have their first home being bought at 40 years old. That’s that doesn’t that doesn’t strengthen our economy. Okay, by any stretch.
needing a much more, we need an earlier entry point and a less expensive entry point. Obviously more supply, one way of getting there. Watchdogonwallstreet.com.
