Commercial landlords baffle me

[MillauFr]

A friend in the banking industry says it is brutal in his industry now. There are 100 MBAs applying for every job. Banks just don't need to pay high salaries anymore.
And with AI, you may not even need people anymore.

Probably. If I was CEO though I would expect to live in one of those classic old houses in the east 40s. Not in Lodi or Stockton.

 

[tvguy]

Probably. If I was CEO though I would expect to live in one of those classic old houses in the east 40s. Not in Lodi or Stockton.

I don't have the latest information, but Lodi has a VERY high average per capita income and some very expensive houses. All that Winery money.

 

[Sweettears]

I just don't understand why a CEO of a community bank would accept less than $200k per year in a moderate to high cost of living area. That is a high pressure job. Way more than 40 hours per week. No way I would accept less than $500k for that. For $200k per year what can you afford? A 1 bedroom condo in Lodi?

I’ve had it three times and live quite comfortably

 

[DCLMP]

I have wondered that too. One guy seems to be buying all the vacant buildings and "trying" to rent them, and many of those buildings are in the category of being vacant for 10 years. But you can only afford so many business losses before you go bankrupt.

Haven’t you heard about the coming commercial real estate crisis?

 

[goofyernmost]

Small m stands for thousands

I thought it was a K for thousands in current terms. M is for thousands in roman numerals.

 

[tvguy]

Haven’t you heard about the coming commercial real estate crisis?

Coming? It's here and now in California. The permanent shift to remote work means our downtown area is a ghost town. As we are the State Capital, most of those jobs are state jobs and the restaurants in the core area are dying because there are no state workers there anymore to buy lunch. Lots of vacant buildings. My son works for the state and they went remote in March 2020 during the pandemic. In 2021 the state did not renew the lease on the building he worked in as they determined all the employees could work remotely permanently and they would rent a hotel conference room if they needed to get everyone together again. My son has since moved 400 miles away, but their first in personal meeting didn't happen until June of this year. And that meeting met with complaints because after the fact, it was clear it could have all been done on Zoom.

 

[DCLMP]

Coming? It's here and now in California. The permanent shift to remote work means our downtown area is a ghost town. As we are the State Capital, most of those jobs are state jobs and the restaurants in the core area are dying because there are no state workers there anymore to buy lunch. Lots of vacant buildings. My son works for the state and they went remote in March 2020 during the pandemic. In 2021 the state did not renew the lease on the building he worked in as they determined all the employees could work remotely permanently and they would rent a hotel conference room if they needed to get everyone together again. My son has since moved 400 miles away, but their first in personal meeting didn't happen until June of this year. And that meeting met with complaints because after the fact, it was clear it could have all been done on Zoom.

I meant the affect on the banks

 

[tvguy]

I meant the affect on the banks

Little impact on banks here since the vast majority of the buildings impacted are state owned. Or as with my son's office, the building sits vacant with the state still paying rent since the lease runs until 2029.

 

[DCLMP]

Little impact on banks here since the vast majority of the buildings impacted are state owned. Or as with my son's office, the building sits vacant with the state still paying rent since the lease runs until 2029.

The value of the properties are still declining. I don't where you live, but California has a big problem ahead.

 

[Sweettears]

Little impact on banks here since the vast majority of the buildings impacted are state owned. Or as with my son's office, the building sits vacant with the state still paying rent since the lease runs until 2029.

I’m in banking with a focus on CRE. Not seeing any decline.

 

[tvguy]

The value of the properties are still declining. I don't where you live, but California has a big problem ahead.

Sacramento

 

[MillauFr]

Coming? It's here and now in California. The permanent shift to remote work means our downtown area is a ghost town. As we are the State Capital, most of those jobs are state jobs and the restaurants in the core area are dying because there are no state workers there anymore to buy lunch. Lots of vacant buildings. My son works for the state and they went remote in March 2020 during the pandemic. In 2021 the state did not renew the lease on the building he worked in as they determined all the employees could work remotely permanently and they would rent a hotel conference room if they needed to get everyone together again. My son has since moved 400 miles away, but their first in personal meeting didn't happen until June of this year. And that meeting met with complaints because after the fact, it was clear it could have all been done on Zoom.

Isn't the San Francisco office market already coming back as a new AI goldrush is already brewing?

 

[tvguy]

Isn't the San Francisco office market already coming back as a new AI goldrush is already brewing?

No, among the worst cities in the nation.
https://sfstandard.com/2023/07/18/san-francisco-commercial-property-values-could-plummet-40-by-2025/

31% vacancy rate

https://www.forbes.com/sites/jimsch...might-be-streaking-toward-us/?sh=2fd1e286ddd3

AI is hoped to help, but face it, AI companies can locate at cheaper places.
https://www.cnn.com/2023/07/10/business/ai-real-estate-san-francisco/index.html

 

[Sweettears]

No, among the worst cities in the nation.
https://sfstandard.com/2023/07/18/san-francisco-commercial-property-values-could-plummet-40-by-2025/

31% vacancy rate

https://www.forbes.com/sites/jimsch...might-be-streaking-toward-us/?sh=2fd1e286ddd3

AI is hoped to help, but face it, AI companies can locate at cheaper places.
https://www.cnn.com/2023/07/10/business/ai-real-estate-san-francisco/index.html

I think the San Francisco market has been hit especially hard. For economic and social issues

 

[DCLMP]

I’m in banking with a focus on CRE. Not seeing any decline.

Where and what bank?

 

[DCLMP]

The majority of Americans including a majority of bankers didn't see a problem in the early 2000's, So a banker telling me there's no problem doesn't mean much,

 

[Sweettears]

The majority of Americans including a majority of bankers didn't see a problem in the early 2000's, So a banker telling me there's no problem doesn't mean much,

And your knowledge comes from where?

Im not projecting or predicting anything. Merely stating the current state. It seems like a shaky ground to stand on that since people may have missed predicting a rare economic event are bound to do it again.

 

[Sweettears]

The majority of Americans including a majority of bankers didn't see a problem in the early 2000's, So a banker telling me there's no problem doesn't mean much,

I also believe that this is a gross overstatement. There were plenty of people that were concerned about a real estate bubble. Keep me informed so I don’t lose my job.

 

[DCLMP]

And your knowledge comes from where?

Im not projecting or predicting anything. Merely stating the current state. It seems like a shaky ground to stand on that since people may have missed predicting a rare economic event are bound to do it again.

I fully expect to see more bank failures. Maybe even a major bank. I'll go out on a limb and make that prediction.

 

[DCLMP]

I also believe that this is a gross overstatement. There were plenty of people that were concerned about a real estate bubble. Keep me informed so I don’t lose my job.

I don't think most people knew what the banks were doing. All the sub-prime loans and predatory lending. It was a lot more complex than just a housing bubble.