4 ms·

This is an interesting story. With simple supply and demand, we have massive oversupply for office real estate and significantly reduced demand - prices should

This is an interesting story. With simple supply and demand, we have massive oversupply for office real estate and significantly reduced demand - prices should drop, right? Except we have the bag holders, the landlords who retained leases and the banks who own the mortgages, they are going to fight tooth and nail to maintain the value of their assets, and they have deep pockets. I've seen one story where the writer made the argument that this is why we've been seeing "you must return to the office" stories - big business must have line go up, line must never go down. We'll see what happens but I sure hope there are no government bail-outs for this sector. Investment involves the risk of the asset depreciating.

mediaman 3y ago
What's the commercial office tenants' incentive to bail out CME debt funds?
- anotherhue 3y ago
  If the tenant is large enough they may have stock price exposure through large investors such as pension funds.
game_the0ry 3y ago
> Investment involves the risk of the asset depreciating. The problem is that investors who have been working in the business since 2010 have no idea what a real economic recession looks like bc the fed keeps on swooping in to save the day. Asa result, a lot of investors levered up their books. The investment business is not a free market bc the downside risk is no longer present.
muttled 3y ago
Think the fact that the leases are coming due over the next few years rather than all at once will prevent a bailout? Might just be a slow decline like old factories in Chicago that sat vacant for a while and then got snapped up for commercial space since they were so cheap.
- mewse-hn 3y ago
  That sounds like the sort of soft landing that I think everyone is hoping for. Stuff I've been reading has described landlords leaving buildings empty rather than lower prices and rent to smaller tenants, that sort of artificial propping up seems like it could precipitate a crash.

mediaman 3y ago

What's the commercial office tenants' incentive to bail out CME debt funds?

anotherhue 3y ago
If the tenant is large enough they may have stock price exposure through large investors such as pension funds.

game_the0ry 3y ago

> Investment involves the risk of the asset depreciating. The problem is that investors who have been working in the business since 2010 have no idea what a real economic recession looks like bc the fed keeps on swooping in to save the day. Asa result, a lot of investors levered up their books. The investment business is not a free market bc the downside risk is no longer present.

muttled 3y ago

Think the fact that the leases are coming due over the next few years rather than all at once will prevent a bailout? Might just be a slow decline like old factories in Chicago that sat vacant for a while and then got snapped up for commercial space since they were so cheap.

mewse-hn 3y ago
That sounds like the sort of soft landing that I think everyone is hoping for. Stuff I've been reading has described landlords leaving buildings empty rather than lower prices and rent to smaller tenants, that sort of artificial propping up seems like it could precipitate a crash.