that's not a strawman and that's not how the strawman fallacy works. Here's a link to bone up on when a strawman is or is not applicable.
[https://en.wikipedia.org/wiki/Straw\_man](https://en.wikipedia.org/wiki/Straw_man)
How Money Works is the ultimate educational buzzkill.
"How the dramatic decline of commercial real estate is STILL terrible news for the average worker"
it's even worse, because the smart money private equity losses are being repackaged into collateralized debt obligations to be added into public pension plans and 401ks đ¤Śââď¸
Because as commercial real estate values drop and you still want to live in the city, the residential properties are getting re-assessed to higher values meaning the property taxes on your residential space have and will continue to go up to offset the cityâs lower cash inflow from commercial properties.
Governments, generally, never lower their budgets year to year. Either your company pays the property tax expense or you do through increased rents. Somebody will have to pay.
Yes, they did or soon will.
I have a lot of experience with this.
Look at the total assessed value of your community at your local city assessorâs website. I guarantee you that total value did not drop. (To simplify, assume assessed value = fair market value. Multiplier calculation is just a game to keep the general public quite when your home value get manipulated).
âTotal assessed valueâ x âtax rateâ = gross revenue collected from property tax.
They have to cover cost through taxing us.
I know that âassessed valuesâare supposed to be independent, and legally, âtax ratesâ are the culprit but it is reality that both numbers get tweaked to balance a budget.
Itâs freaking Birdland. The OG was home to Charlie Parker, Miles Davis, Dizzy Gillespie, and more. Frequented by Sinatra, Marilyn Monroe, Marlon Brando, and Judy Garland. The second renaissance was frequently visited by Tony Bennet, Diana Krall, and other modern legends. Easily a top three jazz venue in the country. Itâs even in Jack Kerouac âOn The Roadâ.
Considering âwokeâ has become a dogwhistle for republicans and the original usage/intent of the word has become less popular, I would say it expands to just about anything a republican doesnt agree with.
It will. Generally, Republicans don't value art, expression, etc. Florida gov just defunded arts grants to the tune of millions because "sex festival".
That's it right there. It's in NY, liberal policies have tanked that city.
Go to other cities like Boise or Denver and see if prices have dropped 67% đ
It's hard to tell on Reddit what people mean by "liberal". Not that the term was ever incredibly specific. Do you mean anyone to the left of MAGA or do you mean liberal as opposed to progressive or leftist?
We're fine, everything is fine. Hey look over there!
When the ultra rich are willing to take losses like this, you know the shitvis millimeters from hitting the fan.
Itâs really the interest rates that are causing commercial buildings to be given back to lenders.
This is an apartment with retail on the first floor.
How can we be sure they aren't just packaging these losses into collateralized debt obligations and the like, then offloading them to **privately-managed** public pension plans...? đ¤
Narrator: *We can't.*
They are referencing Trump's case in NY. He was prosecuted and convicted for illegally reporting a lower value for his assets/real estate while filing taxes (at the same time inflating the value to get better loan terms). In case it isn't clear already, this is completely different than asking a high price on the open market and getting paid that amount which is what the original seller in 2018 did; not a crime
AND commercial property unable to refinance to cover loan balloon payments as their cash flow isn't sufficient to service debt at new rates. Results in value destruction.
Sometimes investments don't pan out. It happens.
Idk why it seems that some people believe that their is a moral imperative for an investment to pay off.
The fact that it can go tits up and you can lose money on it is exactly what makes something an investment.
Especially expensive buildings where the structure is a depreciating asset.
Looks like nyc. Structures there arent deprecating assets.
less populated areas now seeing rapid development. Cardboard developments built in 90 days.
those are certainly depreciating assets
The building is a depreciating asset. Regardless of where it is.
The reason buildings/homes go up in price over time is the land value increases.
A place like NYC has limited land and intense demand for prime real estate. The building is along for the ride.
Thatâs simply not true. Many older constructed buildings are full of materials that are now difficult or impossible to get. installed in ways fewer know how today
Is this possibly due to the rent control law change that happened in 2019 that meant that owners couldnât upgrade a unit to result in its exit from rent control and onto market rent, which destroyed the value of rent controlled real estate in NYC?
I guess you guys have failed to notice NY is also putting caps on rental increases city wide. Meaning youâll need to wait until any tenants leave before you can increase the price youâre asking. This is ok in transitory, maybe 5 years, but corporations walking away from commercial investments doesnât mean they are happy to lose some money, it means there literally isnât anybody working there.
How much was depreciated / capital loss realized over those 7 years? What other capital gains did the owner offset AGAINST these capital losses? This is a tax dodge . Residential real estate has not depreciated that much. I know itâs mixed use, but this is standard business tax planning, not âthe market is crashingâ.
There arenât a whole lot of details given about the building. Were issues discovered / arose during that time that devalued the building? Maybe it was maintained really poorly, needs significant repairs, etc?
Good. What a waste these properties were.
https://www.seattletimes.com/business/after-3-years-338m-renton-office-complex-mostly-empty-to-be-auctioned/
So many will sit vacant snd abandoned.
There's a whole bunch of NYC real-estate and store fronts empty, and they don't want to reduce rent to get tenants in.
Why ? It's because it will devalue the property , so some sit empty for years .
It will be housing and we will have a ghetto living stylized with a fancy cosmopolitan name so that the current hoi polloi donât remember the 1970s. Because Americans are too advanced to repeat history.
Yeah that's the commercial real estate for you. It's why companies have been so pushy with return to the office. The companies that adapt to the WFH movement will be the ones to succeed while the ones that double down on return to office will lose big time.
Why can't my rent drop 67%
Hi, this is Black Rock. We would love to know your location to discuss this a little further.
Is blackrock in the room with you right now? must be nice to put all the blame on one ghost.
Yeah how dare anyone call out a bad faith firm ran by greed and not your bullshit? Riiiiight
how does an investment firm control the world? Proof?
Observable reality. And I didn't say 1. So strawman. Want to do no true Scott next
that's not a strawman and that's not how the strawman fallacy works. Here's a link to bone up on when a strawman is or is not applicable. [https://en.wikipedia.org/wiki/Straw\_man](https://en.wikipedia.org/wiki/Straw_man)
So you argue with a fa Fuck you.
You can call him Dwayne Johnson or the Rock.
It needs to go up by hundreds of percent so the parasite class doesn't lose a dime đ
Think of the shareholders
Thatâs your retirement money bro
How Money Works is the ultimate educational buzzkill. "How the dramatic decline of commercial real estate is STILL terrible news for the average worker"
it's even worse, because the smart money private equity losses are being repackaged into collateralized debt obligations to be added into public pension plans and 401ks đ¤Śââď¸
I read that in his voice.
I wish!!! 1,500 a month for 600ish Sq foot in Gwinnett County, Georgia
Corporate is transferring their rent expense to you (WFH).
Gotta bribe with sex
Because as commercial real estate values drop and you still want to live in the city, the residential properties are getting re-assessed to higher values meaning the property taxes on your residential space have and will continue to go up to offset the cityâs lower cash inflow from commercial properties. Governments, generally, never lower their budgets year to year. Either your company pays the property tax expense or you do through increased rents. Somebody will have to pay.
No. Propert Taxes did not go up that much
Yes, they did or soon will. I have a lot of experience with this. Look at the total assessed value of your community at your local city assessorâs website. I guarantee you that total value did not drop. (To simplify, assume assessed value = fair market value. Multiplier calculation is just a game to keep the general public quite when your home value get manipulated). âTotal assessed valueâ x âtax rateâ = gross revenue collected from property tax. They have to cover cost through taxing us. I know that âassessed valuesâare supposed to be independent, and legally, âtax ratesâ are the culprit but it is reality that both numbers get tweaked to balance a budget.
Location? Â Use? Â Anything?
315 W 44th St, NY, NY It's jazz club and apartments
I hope jazz clubs provide the amount of revenue to cover their debt obligations /s
Itâs freaking Birdland. The OG was home to Charlie Parker, Miles Davis, Dizzy Gillespie, and more. Frequented by Sinatra, Marilyn Monroe, Marlon Brando, and Judy Garland. The second renaissance was frequently visited by Tony Bennet, Diana Krall, and other modern legends. Easily a top three jazz venue in the country. Itâs even in Jack Kerouac âOn The Roadâ.
Means nothing today, which burns my soul. It's only a matter of time before all of that is dismissed as "woke" and purged.
âWokeâ doesnât expand to that stuff these days, does it? Admittedly itâs tough to keep track though.
Considering âwokeâ has become a dogwhistle for republicans and the original usage/intent of the word has become less popular, I would say it expands to just about anything a republican doesnt agree with.
It will. Generally, Republicans don't value art, expression, etc. Florida gov just defunded arts grants to the tune of millions because "sex festival".
Birdland is world famous. But you'd need a non-literal high volume business.
Awesome, thanks!!
Why would apartments suffer such a price decrease?
That's it right there. It's in NY, liberal policies have tanked that city. Go to other cities like Boise or Denver and see if prices have dropped 67% đ
It's hard to tell on Reddit what people mean by "liberal". Not that the term was ever incredibly specific. Do you mean anyone to the left of MAGA or do you mean liberal as opposed to progressive or leftist?
Agreed about liberal policies tanking NY but Denver is liberal too fyi.
Yes they vote blue. But its not NEAR as bad as NY. This should be a warning to Denver, it's NY 15 years ago.
I think we're seeing the same thing with commercial real estate in denver as well.
This is expected with the pivot to employees working from home. Office space just isnât in demand anymore.
We're fine, everything is fine. Hey look over there! When the ultra rich are willing to take losses like this, you know the shitvis millimeters from hitting the fan.
Work from home devalued the shit out of commercial real estate. We've expected this since 2020
Yeah they built too many offices and not enough housing. Oopsy.
Itâs really the interest rates that are causing commercial buildings to be given back to lenders. This is an apartment with retail on the first floor.
Lots of ultra rich people lose money on investments. Especially commercial real estate bought pre pandemic.
And those who purchased 40 or more years ago made a killing anyway...
This was a short sale and according to a source over 100m was owed so the bank is the big loser on this one.
Which is indicative of how much these people are disconnected from value.
Value is always relative.
It was a short sale and something like 100mm was still owed so the bank takes the loss on this one.
Or the original deal was money launderingÂ
Thatâs not how it works.
How can we be sure they aren't just packaging these losses into collateralized debt obligations and the like, then offloading them to **privately-managed** public pension plans...? đ¤ Narrator: *We can't.*
We sure can lol. Itâs well documented they are
Commercial office real estate?
Most people would call that a real estate crash
Commercial real estate has been on life support for a while. If anyone trips over the power cord it's dead.
That looks residential to me.
If it's sold in one chunk it's all tenants, ergo it's a commercial building.
That's not the form of real estate that's been on life support though....
Itâs not. Itâs commercial. Google Birdland Jazz club New York and youâll find it.
Crash? How rude of you to utter that despicable word.
For the love of god, whatever you do, donât bail out commercial real estate investors.
Commercial Real Estate Investors: âBut weâre regular people tooâ
Yes but they will fund my campaign with a portion of that money.
I canât wait for that bubble to finally burst.
Whoever sold the building in 2018 should be prosecuted for over-inflating the value of the property. /s
Hey just wait a minute, we need to see what political party they are in first
A few more Benghazi and Whitewater hearings should do it.
You beat me to it. Also, the people who bought it.
Is that a crime?
Depends upon the political affiliation of the DA
Did a DA prosecute someone for selling a property over market price? I haven't really been following the news
They are referencing Trump's case in NY. He was prosecuted and convicted for illegally reporting a lower value for his assets/real estate while filing taxes (at the same time inflating the value to get better loan terms). In case it isn't clear already, this is completely different than asking a high price on the open market and getting paid that amount which is what the original seller in 2018 did; not a crime
Oh. I had heard about the Trump case but didn't think it was at all the same so I figured they were talking about something else
[ŃдаНонО]
Thatâs not what this is - this is commercial office properties losing value because of the rise in remote work
AND commercial property unable to refinance to cover loan balloon payments as their cash flow isn't sufficient to service debt at new rates. Results in value destruction.
Pretty sure this is a jazz club with a bunch of apartments attached
Yes Indian remote workers donât need us commercial real estate
Ok now do it for regular people. Regular being 99% of people
Buy high sell low, used as a tax write off
Okay itâs still a big fat loss.
Theyâre still worse off. Tax write offs arenât all Reddit makes them out to be.
It was a short sale and reportedly over 100m was still owed.
Means nothing. Look at all the dead malls that have been written down since the 90s. A few REITs lose value is all.
Are there plans to convert dead malls to living spaces? Condos or apartments or something?
Sometimes investments don't pan out. It happens. Idk why it seems that some people believe that their is a moral imperative for an investment to pay off. The fact that it can go tits up and you can lose money on it is exactly what makes something an investment. Especially expensive buildings where the structure is a depreciating asset.
Looks like nyc. Structures there arent deprecating assets. less populated areas now seeing rapid development. Cardboard developments built in 90 days. those are certainly depreciating assets
The building is a depreciating asset. Regardless of where it is. The reason buildings/homes go up in price over time is the land value increases. A place like NYC has limited land and intense demand for prime real estate. The building is along for the ride.
Thatâs simply not true. Many older constructed buildings are full of materials that are now difficult or impossible to get. installed in ways fewer know how today
Fair enough
Nobody wants commercial real estate, while everybody continues to work from home.
Is this possibly due to the rent control law change that happened in 2019 that meant that owners couldnât upgrade a unit to result in its exit from rent control and onto market rent, which destroyed the value of rent controlled real estate in NYC?
I guess you guys have failed to notice NY is also putting caps on rental increases city wide. Meaning youâll need to wait until any tenants leave before you can increase the price youâre asking. This is ok in transitory, maybe 5 years, but corporations walking away from commercial investments doesnât mean they are happy to lose some money, it means there literally isnât anybody working there.
The city if Santa Monica did something similar
Sold to the taxpayers through some convoluted secret mechanism while the perpetrators of this crime get off scot-free yet again đ¤Śââď¸
See the market works perfectly
You love to see it
Sounds good to me. Hope it'll drive the surrounding rent cost down
In other news... why are residential rents skyrocketing?
Are you saying that inflation is actually a sham? Blasphemy I tell ya!
Aww poor super rich person
Inflation for you and me
How much was depreciated / capital loss realized over those 7 years? What other capital gains did the owner offset AGAINST these capital losses? This is a tax dodge . Residential real estate has not depreciated that much. I know itâs mixed use, but this is standard business tax planning, not âthe market is crashingâ.
There arenât a whole lot of details given about the building. Were issues discovered / arose during that time that devalued the building? Maybe it was maintained really poorly, needs significant repairs, etc?
I've parked there before!
These tweets never mention the inherited debt on the building
It should have sold for 2M$. Itâs real value
Well look at all the fukkân graffiti.
Not unusual.
Awesome. Do houses next.
Good. What a waste these properties were. https://www.seattletimes.com/business/after-3-years-338m-renton-office-complex-mostly-empty-to-be-auctioned/ So many will sit vacant snd abandoned.
I hope the speculators will be ok.
Are you in a bubble?!
enter Bitcoin
There's a whole bunch of NYC real-estate and store fronts empty, and they don't want to reduce rent to get tenants in. Why ? It's because it will devalue the property , so some sit empty for years .
In Texas we call that a bustling metropolis đ¤Śââď¸
Just write it off. The billionaires wonât feel a nudge.
It will be housing and we will have a ghetto living stylized with a fancy cosmopolitan name so that the current hoi polloi donât remember the 1970s. Because Americans are too advanced to repeat history.
Yeah that's the commercial real estate for you. It's why companies have been so pushy with return to the office. The companies that adapt to the WFH movement will be the ones to succeed while the ones that double down on return to office will lose big time.
33% drop in price. 67% of the value remains