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I live in Brooklyn and have seen 2-3 business close a week around me. At this point almost every other storefront is vacant (many of which have been since befor

• wwweston 6y ago
  > My hope is that this will bring down commercial real estate prices down significantly I'm going to predict that this will not happen. More specifically, that it will be unusual in general for rents or prices anywhere to drop any more than 10%. There's something odd going on and my best guess is that there are (a) accounting/tax practices that provide incentives for vacancy with certain nominal values and (b) real estate markets are now driven more by massive pools of capital trying to soak up opportunities than they are by demand on short-to-mid-term horizons. But I don't know enough to say for certain and explain how, and I'm hoping that someone can tell me why/how I'm stupid.
  • diogenescynic 6y ago
    Rents in SF are already down 20%: https://socketsite.com/archives/2020/08/asking-rents-in-san-francisco-down-nearly-20-percent-from-peak.html https://socketsite.com/archives/2020/08/asking-rents-in-san-...
  • birdyrooster 6y ago
    Rent in SJC is down by at least 10% if not much more. I am in an apartment now that used to cost $3500/mo for only $2600/mo now. A month or so ago, I moved out of my dilapidated, old roach infested apartment I was paying $2750 for elsewhere in San Jose. Yeah lots of businesses have closed and people moved out, but the discount units are filling up and businesses are reopening.
    • wwweston 6y ago
      That does sound like a remarkable change in price. Thanks for the counterexample data point.
  • aorloff 6y ago
    Commercial real estate prices are coming down.
  • red_admiral 6y ago
    I think the massive pools of capital thing is somewhat true, but this investment strategy works because ultimately there's so much demand for property, which is what's driving the real estate prices. A permanent drop in demand because more people are working from home could crash the market.
  • raducu 6y ago
    If everybody has access to the pool of fake money: you get inflation. If only a handful of fools do, you will get economic devastation sooner or later, because you remove the feedbacks of capitalism and hand the reins to monkeys that just happen to have access to the money printer.
  • Bombthecat 6y ago
    Money printer goes brrrr. To save your money, land and houses are your best bet. (even in or after a civil war)
    • nthj 6y ago
      This has historically been true, but one major variable has changed: executives have been forced to see what their companies look like with remote workers. The land and housing markets look very different when a significant percentage of people aren’t paying for a shorter commute.
    • guidoism 6y ago
      I don’t think that this is always true. Land reform happens consistently in history when ownership gets out of wack. Also the value you assign to the land is going to change when the use changes, for example houses in currently popular tech hubs aren’t as important when people can work remotely. And the improvements to land like houses aren’t always going to necessarily hold their value. Labor is a huge influence on price, what happens when machines start building houses? Not saying you shouldn’t buy land or houses, I consider them part of my strategy but consider the downsides too. Oh yeah, take a look at the Georgists and The One Tax where land is the only thing taxed since it’s the only finite resource. It’s not impossible that we end up in a situation where holding land just to hold your wealth isn’t going to exist anymore.
  • barrkel 6y ago
    The value of land rented is mostly based on the rent that can be charged. Loans which use the land as collateral need the value to stay high in order to roll over (refinance) the loan. It's conceivably better for major real-estate holders to rent the land out at their preferred rate one or two months in a year, and leave it unoccupied otherwise, than accept reduced rates. The former gives a fig leaf for rental value, which props up the land value, which enables refinance. The latter admits that rental value has dropped, which would lower the land value, which would cause refinancing to fail.
    • ballenf 6y ago
      That makes sense, but I'm confused how you make loan payments without tenants paying rent. Not to mention property taxes, maintenance, utilities and other overhead. Kind of feels like the cliché "make it up in volume" when you're losing money on each transaction.
      • nradov 6y ago
        It's not sustainable indefinitely but most large landlords have significant capital reserves as well as revenue from a diverse portfolio of other properties. So they can afford to take losses on vacant properties for a few years while waiting for the market to recover.
        • stainforth 6y ago
          This is to the detriment of reality, to the actual structure of the city, therefore it must be curtailed.
          • wwweston 6y ago
            Vacancy taxes?
      • barrkel 6y ago
        You don't make loan payments; you make interest-only payments and are speculating on future appreciation on the value of the land, a proxy for the local economy. It's not sustainable indefinitely, but it can go on for some time. And if the economy picks up, then all is right again.
• blisterpeanuts 6y ago
  That's great four months a year, but what about the rest of the year? No one can eat outdoors in 20F, or bike to work in the snow and ice. SF does have the advantage of year round biking weather.
  • jdkardia 6y ago
    I would beg to differ. 3 season biking is easy as pie, and 4 season with just a little effort. there was only maybe a month out of the year I couldn't bike to work in Minneapolis or Chicago, all it takes is infrastructure and the right gear.
    • jodrellblank 6y ago
      As easy as pie, all it takes to bike to work is all the tarmac and smooth roads of a car world, all the parking space of a small car world, all the maintenance of a small vehicle, and a car/bus/taxi/train system for when you can’t bike, and their infrastructure, parking and maintenance. Do bikes have the largest amount of unmentioned externalities of any form of transport?
      • labawi 6y ago
        Have you been in a place where lots of people ride bikes? A small car world would be 100% -> 60% resource reduction. At reasonable scale, bikes are at least a 100% -> 10% reduction in all mentioned 'externalities' or should we say resource use, or 10x capacity for same resources, except for road size at maybe 3x, but still more than 10x on cost. Public transit would grow (no need to fit all cyclists), but that should actually be a net benefit. To comprehend the difference in scale, view images here [1]. Half as many cars wouldn't fit, even if they covered every cm of the image. [1] https://biketoeverything.com/2018/12/18/bicycle-infrastructure-in-amsterdam-and-the-netherlands/ https://biketoeverything.com/2018/12/18/bicycle-infrastructu...
        • jodrellblank 6y ago
          > A small car world would be 100% -> 60% resource reduction. You're missing the part I replied to which was about bikes being usable 11 months of the year. If you need all the car infrastructure for 1 month, plus the bike infrastructure, that makes it overall worse, not better. But discard that, if biking is a 60% reduction, then a walking+train world would be way more. Your link talks of a train station building a 12,500 bike-parking garage. For comparison the busiest train station in the UK (Waterloo) has 250,000 people using it every day. Note that the pictured bike parking in Amsterdam takes up the space of two of the large multistorey hotels next to it, just to store metal, but pushes actual walking humans two hotel distances further away from their destination just to walk past unused metal storage. Bike parking, like car parking, is a non-place in the sense of https://newworldeconomics.com//place-and-non-place/ https://newworldeconomics.com//place-and-non-place/ it's not somewhere anyone wants to go, or a place where anything happens. Scale that bike parking up to 100,000 people and it would be an enormous amount of physical city-center non-place. Now count that you have to park those bikes at both ends of every journey - bike parking at the supermarket, at the clothes shops, at the pubs, at the apartment buildings - and instead of a small, dense, walkable city center, you're now measuring the total area devoted to non-place metal storage in square kilometers, and inconveniencing everyone with kilometers more walking every week just to cross the distances taken up by mega bike park bloat. This picture is Shinjuku in Tokyo, the world's most populated city, near the world's busiest train station: https://newworldeconomics.com/wp-content/uploads/2017/01/shinjuku1.jpg https://newworldeconomics.com/wp-content/uploads/2017/01/shi... - can you imagine that street being as pleasant with 2,000 bikes barelling down it at 2x walking speed and every one of those eateries having 5-20 bike parking outside? And there's no chance those 12,500 bikes would fit on the trains, how many bikes fit on a passenger train, maybe 15 or so? Bike+train means most people can only bike on one side of any train journey. > Public transit would grow (no need to fit all cyclists), but that should actually be a net benefit. If public transit is growing, more people will be able to not-need bikes. > To comprehend the difference in scale, view images here [1]. Or you, view images here: https://newworldeconomics.com/what-a-real-train-system-looks-like/ https://newworldeconomics.com/what-a-real-train-system-looks... and comparisons here https://newworldeconomics.com/the-problem-with-bicycles/ https://newworldeconomics.com/the-problem-with-bicycles/ e.g. [1] "The typical U.S. solution is to surround the train station with acres and acres of free parking.[...] There are 157 acres of land in this photo. When you step off the train, you have immediate walking access to 157 acres of /nothing/" and [2] "The better solution is to surround the station with all the highest-value property. All the best offices, stores and restaurants are as close to the train station as possible, so we can walk there from the station, and where there is the most pedestrian traffic. Plus, you also try to put as many apartment buildings there as you can, so you can easily walk to the station in less than ten minutes." "if you want people to be able to live without automobiles, you have to make it easy to get from the train station to wherever you want to go on foot. This means you put all the good stuff right up against the train station — even build it into the train station itself if possible. When you step out of the train station, you want to land right in a wonderful pedestrian Traditional City environment, not a parking lot wasteland." When you switch a "large" surround of car parking for a "large" surround of bike parking, that doesn't fix anything. I put "large" in quotes because the measure is not abstract meters, dollars, or kilos of concrete, the measure is human size and human footsteps - walking past 12,000 bikes is 90% of people walking further for no benefit, while the bike owners also walk further for a small benefit of part of a journey, and puts desirable city space to use by metal instead of humans. [1] https://newworldeconomics.com/wp-content/uploads/2009/12/viennafairfax.jpg https://newworldeconomics.com/wp-content/uploads/2009/12/vie... [2] https://newworldeconomics.com/wp-content/uploads/2009/12/gakugeidaigaku.jpg https://newworldeconomics.com/wp-content/uploads/2009/12/gak...
• mark-r 6y ago
  My midwestern city is out of bikes too, but it isn't because of a surge in demand. It's because all the bikes were made in China, and supply has slowed to a trickle.
  • nradov 6y ago
    The bicycle component factories in China are now back to operating near normal capacity and the supply chain is recovering.
  • ldiracdelta 6y ago
    Me and the family bike many weekends on a city bikepath and I can report that there are a lot more bikers than normal these days.