3 ms·

I have been speculating for some time that we are looking at a commercial real-estate correction or crash as many of the leases are now being held off the marke

I have been speculating for some time that we are looking at a commercial real-estate correction or crash as many of the leases are now being held off the market by big firms (Blackrock) while larger retail is actually reducing its foot print. I don't know what the disconnect here is, but my nefarious interpretation is that the larger funds are actually holding off a crash by not leasing, thereby hiding what would be a downwardly market adjusted portfolio value. The counter to this is that office space could fill it up, but again, large firms are contracting their downtown footprints for a wide variety of reasons, including cutting costs. Only a few tech companies are expanding. Looking at the mega projects like Hudson Yards which has lost and reduced several leases before even opening, SF's failed 7X7 mall which opened with ZERO leases and older established locations like 666 5th Ave struggling to find new buyers -- it appears pretty grim. Putting all that together, you have an interesting crash that could actually affect the current White House in a very personal way.

partiallypro 8y ago
I don't disagree that people are doing that, kind of. I don't think it's nefarious though, or some plot against Trump or potential plot against Trump. I think the simplest explanation is merely that real estate is a great vehicle to park capital for foreign nationals. NYT's ran a piece about this a few years ago with people hiding their money in real estate in markets like New York, Nashville, Atlanta, etc. It was largely Chinese money. The fear is if there is a longer than expected "trade war" and this property becomes sold in quick succession leading to a crisis to shore up balance sheets in East Asia. China will not admit it, but I have heard ramblings from very smart people that their economy is currently on the brink. They're waiting out for the midterms, but if what I've read/heard is true they might not be able to hold out that long without causing significant damage to the global economy. You have the "trade war" with the US and high debt loads, but you also have a ton of manufacturing flight to countries like Vietnam. Things could get ugly if the dominoes start to fall. That being said, I do think there is still reason to be optimistic that this is just a worst case and things will work out...but I still think foreign nationals parking money in real estate is a big problem that drives out actual tenants by obstructing true supply/demand.
- tsunamifury 8y ago
  Didn't mean to imply it was a plot against Trump. Just meant, unlike other presidents, a crash, or even a potential for a crash would strongly color his agenda as a leader.

partiallypro 8y ago

I don't disagree that people are doing that, kind of. I don't think it's nefarious though, or some plot against Trump or potential plot against Trump. I think the simplest explanation is merely that real estate is a great vehicle to park capital for foreign nationals. NYT's ran a piece about this a few years ago with people hiding their money in real estate in markets like New York, Nashville, Atlanta, etc. It was largely Chinese money. The fear is if there is a longer than expected "trade war" and this property becomes sold in quick succession leading to a crisis to shore up balance sheets in East Asia. China will not admit it, but I have heard ramblings from very smart people that their economy is currently on the brink. They're waiting out for the midterms, but if what I've read/heard is true they might not be able to hold out that long without causing significant damage to the global economy. You have the "trade war" with the US and high debt loads, but you also have a ton of manufacturing flight to countries like Vietnam. Things could get ugly if the dominoes start to fall. That being said, I do think there is still reason to be optimistic that this is just a worst case and things will work out...but I still think foreign nationals parking money in real estate is a big problem that drives out actual tenants by obstructing true supply/demand.

tsunamifury 8y ago
Didn't mean to imply it was a plot against Trump. Just meant, unlike other presidents, a crash, or even a potential for a crash would strongly color his agenda as a leader.