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CRE will be fine in NYC. There’s enough liquidity to keep things afloat. What is and will happen is that the weak hands and pretenders are getting squeezed out.
Occupied offices will be fine, NYC has a vacancy rate of about 26% which is the highest ever.
The biggest problems are the buildings being built right now, the developers may pull the plug if the finished building will be valued less than the cost of building.
If a building is under construction. NYC cannot collect the full valued property taxes until the building is inspected and approved for tenants. So I suspect many developers will just let the property sit without finishing unless the economy improves or a bailout happens.
I don't have a crystal ball but NYC will be in for very rough decade if they can't get taxes out of businesses they will come after residents from the top then to the bottom.
Forget congestion pricing, they will create a lot of new tolls and taxes soon. If these buildings keep staying vacant.
Occupied offices will be fine, NYC has a vacancy rate of about 26% which is the highest ever.
The biggest problems are the buildings being built right now, the developers may pull the plug if the finished building will be valued less than the cost of building.
If a building is under construction. NYC cannot collect the full valued property taxes until the building is inspected and approved for tenants. So I suspect many developers will just let the property sit without finishing unless the economy improves or a bailout happens.
I don't have a crystal ball but NYC will be in for very rough decade if they can't get taxes out of businesses they will come after residents from the top then to the bottom.
Forget congestion pricing, they will create a lot of new tolls and taxes soon. If these buildings keep staying vacant.
Thankyou for your insight.
Although I do not have the Data to anticipate what's coming
I am an old timer and have witnessed cycles repeat over many decades
and it looks like time to make some serious decisions.
Businesses leaving , a larger dependant growing population, failing infrastructure, increasing crime,
in a poorly run city...... is not self sustaining.
I worry N.Y.C. and it's contributing members of society will be in a much tougher spot than the 70's.
It may take decades to recover and my time is limited. 7 years of Feast /Famine ?
Sorry.................I'll be 6 ft. under by then.
Time to start packing.
Last edited by Mr.Retired; 02-20-2024 at 07:40 AM..
The commercial banking sector is now also in big trouble since these office buildings landlords and developers are unable to make payments. When commercial banks fail, many people will be in financial trouble...
Thankyou for your insight.
Although I do not have the Data to anticipate what's coming
I am an old timer and have witnessed cycles repeat over many decades
and it looks like time to make some serious decisions.
Businesses leaving , a larger dependant growing population, failing infrastructure, increasing crime,
in a poorly run city...... is not self sustaining.
I worry N.Y.C. and it's contributing members of society will be in a much tougher spot than the 70's.
It may take decades to recover and my time is limited. 7 years of Feast /Famine ?
Sorry.................I'll be 6 ft. under by then.
Time to start packing.
If Biden wins (which I believe he will) NYC will get bailed out. If he doesn’t, NYCs deterioration will accelerate.
The commercial banking sector is now also in big trouble since these office buildings landlords and developers are unable to make payments. When commercial banks fail, many people will be in financial trouble...
It’s all funny money at the top. Nobody of any value will fail.
It’s all funny money at the top. Nobody of any value will fail.
The government will bail them out.
They just pushed a lot of money into failing regional banks (that program stops this March).
I think these years will be VERY bad for commercial RE and these smaller banks. Interest rates will remain sky high, and there is just no way most of these developments are viable. I think already most of the commercial banks are insolvent, however they do not have to mark to market their balance sheets and reprice their assets, so they look good on paper.
A lot of residential is also going to be underwater, since those landlords are close to refinancing their loans at the new ~10% interest rates.
Its a slow moving wreck, since most of these loans and tenant agreements are multi-year deals.
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