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Both CRE and RRE are doing the Wile E. Coyote levitating thing for now, mostly due to banks and investors being able to delay a reckoning. Used cars got hit fir
by Zigurd 2y ago
Both CRE and RRE are doing the Wile E. Coyote levitating thing for now, mostly due to banks and investors being able to delay a reckoning. Used cars got hit first because it's harder to pretend they are a good asset to hold. But it's coming. Enthusiasts of converting CRE will be disappointed because RRE is already overbuilt in some boomtowns. Only truly abandoned CRE will be economical to convert, and that will further delay widespread conversion. The earliest projects will be selected for low risk. The bottom is somewhere below pre-pandemic prices.
- triceratops 2y agoIs RRE residential?
- fred_is_fred 2y agoYes. I disagree that RRE is overbuilt, perhaps in some specific areas but not in general. You are not seeing houses sit empty for 9 months in most cities, and also people need a place to sleep and cook regardless of WFH or not. On the other hand, I think commercial office space is generally overbuilt in all areas. That's a big difference between the two.
- rasz 2y ago> Used cars got hit first because it's harder to pretend they are a good asset to hold. We arent even down to pre post covid prices on ordinary used cars, and dont get me started on collectibles craze.
- mbg721 2y agoI thought that was more actual demand than speculation. Consumers have relatively inelastic demand for cars in general, but 1) their real income took a hit post-COVID and hasn't recovered, and 2) simply being used makes a car cheaper, since they are such poor assets to hold.
- rasz 2y agoHow many people need a G-Wagon, or W113, or Porsche 914, or even old Toyota truck? Luxury and bad cheap commuter cars are a quickly depreciating asset, smart money would lease those.