Rumor has it that the Fed wants to hike rates 50-75 points...... which is a sight to behold. I'm almost at the point of taking pictures of the "For Lease" signs on office space ala 2008. You can't walk two feet without a building under sublease.
I don't really know how office space works because I've never owned it. But I get the impression you have to re-up leases every 5 years. And despite all of that bullshit over the previous two years of the pandemic - PEOPLE LIKE WORKING FROM HOME. People living in the Bay Area get two hours a day of their lives back not sitting in traffic.
Working from home saves some people even more than two hours a day.
ReplyDeleteAn occasional colleague of mine took the opportunity to relocate to Idaho, where his grandson can get a decent education, while keeping his Silicon Valley job. Be a heck of a commute if he had to resume in-person work.
Fingers crossed the he gets to keep it the way. The force is strong.
ReplyDeleteThey tried bringing everyone back in December. No on wanted to be there except management. At Mr S.'s place the only people trying to act as if everything was normal was management. Engineers in full mask. Managers not. It wasn't until the mask mandate was reinstated that managers were like - yeah... we don't want to wear masks and back home everyone went.
Middle management is the most at risk of obsolesce. But they do have a ton of pull!. I'm abut at 50/50 if the working from home stays because I can't emphasize enough that the middle management pull is strong.
And there are all those empty buildings out there sort of rotting. No people in them - no need for maintenance.
I presume none of the empty buildings would make suitable small-business habitat? Last I was paying attention, it seemed like all the small commercial buildings were being bulldozed to make way for megacorp offices and high-density serf farms.
ReplyDeleteLike I said.
ReplyDeleteI'd like to think they would turn into relics. Or extra housing. But the force it strong.
Which should be interesting in itself as gas prices are pretty high. Traffic is no where near normal. If people start having to go back to the office - gas will have to go higher. And I don't think we've ever seen that. It's pretty solid at 5 bucks right now. So.. good luck with all that.
Sweetie - PPI up 9.7% per this article.
ReplyDeleteGoing to be a lot of pain for a couple of years.
https://www.dailymail.co.uk/news/article-10515219/Wholesale-inflation-surges-9-7.html
I wonder how far real estate will drop this time.
BunnyGoat
Oh lordy. Last weekend I paid 50 bucks for two chicken sandwiches . One fry, and two waters - FROM A FOOD TRUCK.
ReplyDeleteI had to ask them three times because I was so stunned. They are like 50 bucks please. I'm like 50?
I'm not especially sensitive to inflation, but yoooowza.
Your real estate Q made me smile because it's feeling mighty right before the housing crisis like. High gas. Bidding wars. Hyperinflation talk. All those feeling like there is no end in sight.
Also..... I don't know if you've been keeping track of those crazy bird flu flares going up all over. But they just hit a Tyson plant and they have to cull like 250 thousand birds.
ReplyDelete