Office Buildings at Fire Sale Prices

Corporate capitalist tears make the best lube

Wonderful. This correction should have happened ages ago.

Yes a 16 story building in San Francisco sold at 90% off

People need to get off their lazy asses and come back to work and stop this work from home nonsense. The Pandemic has been over for some time now.

It’s not just about health anymore. The pandemic was the catalyst for two realizations. First, many workers are far more productive working remotely. Second, commuting steals a huge amount of energy and time from workers.

I don't agree, R4. A company can manage who well it is doing with half in office half at home work. Workers themselves are responsible for their work-life balance, their income, their careers. If neither the company nor the worker needs to be downtown in an office 4-5 days a week, they shouldn't go there. They are NOT responsible and should not suffer and inconvenience themselves for the benefit of local economies nor for the real estate investments.

The vacant former AT&T building in downtown St. Louis sold for 100 million dollars 10 years ago. It most recently sold for about $2 million and the buyer still doesn't know what to do with it.

What's with the assholes here bitching about people working from home? What's it to you? Are your real estate holdings suffering or are you just a gigantic piece of shit?

[quote]People need to get off their lazy asses and come back to work and stop this work from home nonsense. The Pandemic has been over for some time now.

What the fuck for, R4? To keep commercial lease rentals afloat? Because you're not able to work from home and resent the hell out of anyone who is?

I believe if some workers must be physically present in a given company, then ALL of the company's workers should be on-site. None of this some get to work remotely, some must be on site. If the front line workers must be on site, then the back up/support workers must be on site.

Its simply not fair that in a given company, some get to work remotely while it's not even a possibility for others.

[quote]What the fuck for, [R4]? To keep commercial lease rentals afloat?

Because downtowns are going to suffer, stores and restaurants will close. Then your only options will be the suburbs. The pandemic did enough damage to major cities. There should be a happy medium, somewhere.

It's not just downtowns, suburban office buildings are going for a fraction of asking prices.

Downtown areas already have taken the hit, R11. OTOH their density and the era in which many older buildings were constructed makes them good candidates for housing. Suburban office parks like suburban malls often can't be turned into anything else wand will end up being bulldozed.

Things change R11. Cities will never return to what they were before the pandemic. People don't want to work/live like that anymore.

Only a fraction of pre-pandemic office space is required now. There is a housing shortage. The buildings could be converted to apartments. Who even cares about obscenely wealthy property owners. They'll either come up with a solution or they'll lose their money. Things change and that's just the way of life.

R11 then perhaps the centralized downtown model will need to evolve. Just be use something's worked one way doesn't mean it will always or even be necessary.

R7 Is this building you are referring to? Your numbers are quite different.

R10 and if some people make high six figures while other people make 60-70k, that's not fair either, right? Everyone should have the same exact value on the marketplace, and the same perks, because that's only fair!

[quote]Because downtowns are going to suffer, stores and restaurants will close. Then your only options will be the suburbs. The pandemic did enough damage to major cities. There should be a happy medium, somewhere.

Of course they will suffer. Any change to the old system means someone will suffer. In the 1950s and 1960s, everyone driving ack and forth from the suburbs to the city centers in their big new cars was thought to be a wonderful thing, after all there were goods in automobile manufacturing, fuel refineries, mom & pop gasoline station owners, office building doormen and porters and elevator operators, car parkers in the basement garages, house builders in distant counties, farmers getting rich from selling their farms, commuter train and bus services, and not a thought given to air pollution or climate consequences or the rise of factory farms or a system of schools good for the white children in the suburbs and not good for those left behind in the cities who couldn't afford prestigious private schools. Everything has a consequence whether good, bad, or both.

But I find it difficult to feel that sorry for landlords who own millions, ten of millions of dollars, or hundreds of millions of dollars in major regional or national commercial real estate investment groups, or even too very bad for their stockholders. REITs are not usually the first line of retirement investment for small, novice investor. Commercial real estate has always been highly volatile in times of financial crisis -- better to have some different sorts of eggs in a few different baskets, as anyone I know who is a big real estate investor has. The guy who comes in form the suburbs each day to his tiny shop that used to sell newspapers and magazines switched to selling pricey coffees from a shiny and expensive Italian machine. If the building he's in sits vacant for a few years, he will probably have to change his location and his services yet again.

Those office workers who do work from home, many of them were told by surprised execs that productivity was actually up markedly during COVID and, hey, our lease is coming up for renegotiation anyway, keep doing what you're doing, On that advice they bought houses in distant suburbs, or near their families in more distant parts of the country. It's not simply turning back the clock and everybody going back to what they were doing before because time didn't freeze. A lot of my younger colleagues moved to places where they could actually afford to have a nice life, now you would tell them, no, move back to where you were and live small -- follow the example of your CEO who lives on a golf course in Scottsdale (with a place in Paris and a beach house in Maine) and sticks his head in an executive office once or twice a year.

Unfortunately, modern office buldings are usually terrible candidates for conversion to housing. The floor areas are huge with vast internal areas far from windows that can never be opened. The elevators and stairs are often in the wrong places, the ceilings too low to accomodate alterations and to let light penetrate the interior, the bathroom and plumbing stacks are in the wrong places making bathrooms and kitchens infeasible. Office buildings are clustered too tightly together in many cities in office zones with no reasonable retail possibilities for grocery stores and anything but tiny lobby shops. What is the point in living in a dense downtown zone if it has only retail spaces big enough for a few restaurants, lots of coffee and sandwich shops, a key copier, and a dry cleaner. Those raw spaces don't translate in most cases to what residents would want/need if those buildings were suddenly, somehow converted to housing.

It's easier said than done, putting the cat back in the bag and insisting that all asses be seated in on-premises Aeron chairs starting Monday morning the 15th.

Thems the breaks.

Downtowns can and will evolve. The suburban office market lacks that flexibility and there already are dead office parks much like dead malls. My former office is part of a half mile stretch of ugly 1970s/80s office buildings with few or no tenants. One was recently bulldozed for apartments. I'm sure there will be others.

Tear down these no longer needed buildings and create more green spaces in our cities.

Go to the top of the Gateway Arch in St. Louis, R20. Look to the north and west and all you will see are vast amounts of green space where buildings once used to be. Downtown St. Louis is already a patchwork of smaller buildings that have been torn down for parking lots, which has destroyed pedestrian traffic. You start tearing down 40 story skyscrapers like the AT&T building and mammoth 1 million square foot buildings like the Railway Exchange Building and you might as well just start shoveling dirt on the rest of the city cause it's dead.

Yours is really a stupid remark, R20.

They should bring back the West Side Club in one of these empty office buildings.

Artist lofts.

There is a huge difference between cultivated green spaces and vacant lots gone to seed, though.

[quote]People need to get off their lazy asses and come back to work and stop this work from home nonsense. The Pandemic has been over for some time now.

That's one way to announce to the world you're a CRE lawyer.

Time to find a permanent location for Datalounge World Headquarters!

r21 would tear down Central Park if he could. And Forest Park. Heck, what's a park, precious, what's a park??

Fat, drunk and stupid is no way to go through life, R27.

Where exactly am I advocating for parks to be torn down, R27? Show me the exact words I used to advocate for tearing down public parks.

Ask anybody interested in downtown St. Louis (or Cleveland or Detroit) what is one of the main problems with these downtowns: There are already far too many "open spaces" and not enough density to sustain a viable downtown. Tearing down buildings willy nilly serves only one purpose: destroying the urban fabric.

I was too broad in my post, I should have said tear down SOME of these unnecessary buildings to create more cultivated green spaces. I wouldn't advocate tearing them all down for that. There are a lot of uses many existing buildings could have. But in order for cities to be liveable again they can't all be concrete and steel.

My company instituted a 2.5 days in the office per week policy. Which is good as we moved to a new space and wouldn’t be able to accommodate everyone in at once.

This applies to anybody who lives within 50 miles of a work site. And we have several. And they said either do it or surrender your job. Some people did quit over it.

R28 is right. Philly has the same problem. Vacant parking lots or nasty Walgreens where beautiful schools ones stood.

^once

This steep decline in commercial property value is going to have major ripple effects throughout the entire economy. I bet this will be the factor that ultimately results in a long overdue recession and stock market correction.

[quote] People need to get off their lazy asses and come back to work and stop this work from home nonsense

Many, many, many people have been laid off by corporations looking to increase shareholder profits as wealth gets transferred from the many to the few. Those layoffs no longer fill office buildings

Tear down unusable office towers and build apartments.

[quote] What's with the assholes here bitching about people working from home? What's it to you? Are your real estate holdings suffering or are you just a gigantic piece of shit?

Some people are extroverts and/or just like interacting with office mates. The support staff at my office love throwing office "parties" and are already planning the 2024 Christmas party. It will be on a Friday, after work, so I'm definitely not going. (I voted to have the Xmas party during regular work hours.)

Also, apparently, it's not so easy to convert office space to residential. Think about all the windowless spaces there are on each floor, where the lowly worker bees work. Also, think about where all the plumbing pipes are. Each floor would have maybe one large men's bathroom, one large women's bathroom, and maybe a communal kitchen.

[quote]Because downtowns are going to suffer, stores and restaurants will close. Then your only options will be the suburbs. The pandemic did enough damage to major cities. There should be a happy medium, somewhere.

R11, your post is an example of the flabby thinking that too many in power positions have.

It's why we have disastrous flooding in normally safe zones, because we've allowed development to drain floodplains and watersheds to build more McMansions, but never affordable housing.

It's why state and federal agencies artificially channelize big rivers that used to change course over time, destroying the good, rich soil that those rivers used to spread over the lower 1/2 of its run. That rich black silt that built the Gulf Coast now spills way off into the Gulf of Mexico, devastating coastal communities and barrier islands that were a check on hurricane force further inland.

It's why we still have no major, *serious* initiatives to obliterate the need for fossil fuels, because 100+ years after the founding of Standard Oil and its spawn, our state and federal government STILL subsidizes that industry despite the BILLION dollar profits they make every year, money that never trickles down to the neighborhoods left blighted by transport of crude, refining that crude, and transport of refined fuel, plastics, chemicals and other products that continue to pollute the land.

I could go on. I mean, when the horseless carriage obliterated the horse, buggy, and mule industry, Coach didn't whine about "Why couldn't governments continue to buy all that outdated shit from us?"; it started selling leather handbags, luggage, and apparel accessories like belts.

When the tractor and combine arrived on Southern farms, the free/cheap Black labor that formerly was TIED legally to those farms, suddenly had no need for that labor. Thus began the Greal Migration north, east, and west.

I could go on all night.

But, sure, Mac--let's just pillory all the "lazy, entitled" workers who carry the fucking economy and productivity on their backs, and never give that same energy to the oligarchs who've fucked us over for generations.

I commute into NYC 3 days a week and it’s wonderful. I feel like I get the best of both worlds. I’m in my late 40’s and this hybrid lifestyle feels so earned after decades of 5 day a week drudgery. I’m so grateful.

Also a hybrid worker, 3 days per week in the office. It works.

The bosses who shit their angry pants about not being able to control getting their productive remote-working employees back in the physical office, are those inadequate bosses who are afraid of losing their comfy positions and relevance.

That said, regarding people who think it’s inequitable if companies have different job types and responsibilities warranting some employees being more or less able to work remotely vs. onsite—well, it’s a free country and, if you don’t like such policies, it’s not your company’s responsibility and you’re free to choose to leave or not work there.

Working remotely on Monday and Friday saves a lot of time and money. Monday mornings and Friday afternoons were generally the least productive times at the office.

Yeah, it's mostly extroverted people in supervisory positions who hate WFH. They want to see faces and want to interact.

I hate office extroverts. They are time sucks. I don't give a shit about your husband, your kids, who you're fucking at the moment. I don't want to attend the team building (mandatory) pizza party where you pay yourself on the back. I want to do my work and get the fuck back to my real life, as quickly as possible.

Work is not my life. My coworkers are nice but not my family or friends. Office extroverts need to get a life of their own or seek therapy.

*pat yourself on the back

Oh God R37, take it down a notch, toots. Wanting major urban areas and downtowns to thrive isn't some awful position to take. You need people to keep these areas moving and growing and changing. A happy medium is a hybrid work schedule or turning office buildings into apartments or condos where possible.

Interacting with people, face to face, a few times a week and not over Zoom is actually a good thing.

I WFH 2 days per week, usually Wed. and Friday. Wish I could do it more often, 3 days would be awesome in that I’d never have to go into the office 2 days in a row.

I worked remotely for a company for 20 years, in the last five of those I was told five times that I had a choice: move back into the office or accept a severance package (or sometimes not). None of these moves had anything to do with fostering some Mad Men image of creative collaboration, brilliant inspiration, or increased efficiency, they had everything to do with a continual shopping around for venture capital and for merger and acquisition opportunities. These measures were ways of clearing the books of senior, experienced, higher salaried employees who had moved to other cities or states or countries without problems. The goal was to temporarily reduce the number of employees for one or two quarters for 'better cost numbers' then rehire cheaper, less experienced faces fresh from university and, on paper, overqualified for (now reduced) underpaid positions. No matter if it required two new hires to replace one old, that could be painted as growth in the next quarter, the cost of replacing people was never a serious concern. Nor were the supposed collaborative synergies of working under the same roof held in esteem when inconvenient -- as when those fired people were rehired as remote contractors when work demand was high. I survived these bloodlettings only because I reminded my employer that I had been doing this for many years with their encouragement, but more importantly, that I qualified under the Americans with Disabilities Act a fact of which many of my past supervisors were aware. They said well, okay then, so sorry about that, of course you can stay on working entirely from home, and you've no need to provide any medical evidence, please carry on, and if there's anything we can do for you...

One month during COVID it as announced that productivity was so high that were given $3500 payments (on top of an earlier $1500 payment and apart from usual bonuses) to pocket or for whatever might make our home workspaces more comfortable or efficient, we were told that only a few office locations would be maintained on a streamlined basis and that a spate of expiring leases internationally would not be renewed. Consolidation and working from home were the new norm. A few months later, another merger, another acquisition, another offer from venture capital and everything would be reversed. And so on, back and forth for five years before I retired, 'trimming the fat' either in physical or human resources, than fattening up again.

In the case of my company, the cost of providing office space and related services was estimated at $16,000 - $18,000 per office-based employee per year. Given the nature of our work it was clearly wise to hire people who worked well independently and to shed the great majority of office space and with it any illusion of bullpen style collaboration/productivity. Of the last 3 or 4 CEOs, not one of them lived in the city where the company was headquartered, two didn't live in the same country as city where the company was headquartered. On the rare company-wide conference calls, they phoned in from hotels, or terraces from their homes where the weather seemed always very pleasant, or from a pit stop at some conference room in some office somewhere in the network of things. Their vice-presidents and officers of this and that did the same. Top down, it was a bit of a hard sell to claim that everyone had to be under a corporate roof to foster collaboration -- and when they did you knew immediately that the company was being shopped around yet again.

Not every workplace is like every other of course, some don't lend themselves in the least to remote work policies, but I'm a little cynical when I hear a sudden call for 'Everybody back to the office, we need collaboration!'

The figures in the link at R47 are almost a decade old, I meant to point out.

Ewww downtowns

[quote]Downtown St. Louis is already a patchwork of smaller buildings that have been torn down for parking lots, which has destroyed pedestrian traffic. You start tearing down 40 story skyscrapers like the AT&T building and mammoth 1 million square foot buildings like the Railway Exchange Building and you might as well just start shoveling dirt on the rest of the city cause it's dead.

Downtown St. Louis has been dead for decades.

Cities with downtowns filled with empty office buildings that sell for a fraction of their previous value will see tax revenues fall. Services will be reduced and curtailed while other property owners (for the most part homeowners) will see higher taxes and lower economic activity because office workers aren’t downtown shopping or eating. Transit systems don’t bring in the fares needed to support the services because people aren’t commuting.

Of course it will all change over time. It’s just that the short-term effects are pretty miserable for cities and their residents.

That's all true and horrible R51. But it's not a reason to force corporations to act against their own interests and it's not a reason to shame workers for choosing the best work-life balance possible.

[quote]it's not a reason to shame workers for choosing the best work-life balance possible.

It's not about shaming workers. It's in the best interest of those same workers to have a functioning, thriving downtown instead of one with abandoned buildings and boarded up shops. Then eventually, event and entertainment venues will close and move elsewhere, along with hotels.

[quote]It's not about shaming workers. It's in the best interest of those same workers to have a functioning, thriving downtown instead of one with abandoned buildings and boarded up shops.

Is it? It's in the interests of those workers who live downtown to have a thriving downtown, of course. They can then find the things they need in the city (imagine!) without having to care a care to drive to suburban strip malls for their groceries and clothes and pet food. They can avail themselves of the entertainment venues you describe. Or not, if they are DL recluses who can't leave Mother's side because someone has to rub lotion on her legs at 10 every night.

Do the many people who commute from the suburbs or exurbs care, beyond having someplace to take lunch? Probably they don't care in the least. Does the full-time work from home employee who moved to Italy 6 years ago care? Probably not. A lot of people who work in downtown office districts don't live anywhere near them.

Great. We'll just turn our American cities into projects. Thanks work-from-home propaganda. We can all enjoy societal collapse from our jammies in front of a screen. Where it's safe. And life will go on as before.

The one thing I learned from working at home was how little work I actually did. Most of my time at work seems to have been spent chatting and other social activities.

What a nutty loop. Crap up cities with bad policy and then cite crappy cities as a driving force behind WFH - and lie about WFH productivity increases when in reality quality controls and productivity have never been worse. What I'd like to know is what exactly is keeping the wheels on the fucking bus?

[quote] It's in the best interest of those same workers to have a functioning, thriving downtown instead of one with abandoned buildings and boarded up shops.

This doesn't make sense? What are downtowns for? People. If people would rather WFH and are productive there, then it's the people that matter.

Anyway, no downtown is "thriving" at night. Downtown LA (courthouse area) and San Francisco's Financial District: dead at night. They're basically half-dead, already.

Most workers go the fuck home after work. Home. Away from their desks, and paperwork, and coworkers who won't shut the fuck up.

They don't say: "Fuck yessssss! I can't WAIT to shut off my PC and go one block over to so and so's shithole little shop, then head on over to such-and-such's shithole business, then I want to finish up my work night at that craphole three blocks from the office!", so they can take 90 minutes to get home, spend 32 minutes getting ready for bed, sleep for 6-7 hours, get up and repeat five days a week.

If they're the type to want to do this, WFH isn't going to keep them from leaving their domicile after they're done for the day. Actually, some of them might even crave human interaction more than those who work in-office.

^^^ Wall Steet and the area around the WTC in NY was always dead at night even when NY was at its peak.

I believe it, R60. In the city where I used to live (pre-Covid), it was pretty vibrant at lunch (M-F). They tried to do "block parties" (at night) and First Fridays (night-time events), but it didn't create a night-time buzz. On top of that, there were actually a handful of mixed-use buildings in the downtown area (residential and business, combined). Still didn't work. There were places outside of DT to have dinner, shop, etc. People didn't feel the need to stay downtown.

[quote] One month during COVID it as announced that productivity was so high that were given $3500 payments (on top of an earlier $1500 payment and apart from usual bonuses) to pocket or for whatever might make our home workspaces more comfortable or efficient

That's nice. The mean lady who is in charge of stuff like that (in my office) said they wouldn't pay for my keyboard.

The cool neighborhoods in NYC have all been low rise. The Village, Tribeca, SoHo, Astoria, Brooklyn Heights, Williamsburg , Bushwick, Hunter’s Point all had low rise buildings that enabled a neighborhood vibe to develop.

But that vibe is fast disappearing as real estate moguls have torn down every 6 story building and replaced it with a highrise. Luxury condos have been built everywhere, turning neighborhoods into anonymous places where only Duane Reade can survive. They’re killing NYC for the sake of slurping up foreign investors who want a safe place to store cash.

Instead of restaurants there will be industrial kitchens (ghost kitchens) rented to numerous chefs who will run their business from kitchens in highrises owned by investors. Ubers Eats and Door Dash will deliver food to the residents of highrises. Everything else is done online. That’s the future.

To add to R33’s post: this might not be an issue in the US, but in the UK it’s recently transpired that many pension funds had invested in commercial property, especially in the types of offices built in enterprise parks on the outskirts of towns over the past few decades.

The need for such buildings and their value has plummeted, and so it’s anticipated that the next economic crisis will be sparked by the resulting collapse in pension funds.

Collapsing cities will reverberate straight into the surrounding, cool neighborhoods everybody covets sure as night follows day.

A friend of mine who still works at home had to invest in something that moves her Mouse every couple minutes

It all worked out for Jared!

Regular workers lose their income and livelihoods by economic changes and business decisions. These commercial real estate owners should be no different.

I'm tired of everyone protecting corporate interests - cuz if they fail, then it's going to have a ripple effect! This isn't closing a business - this is just a building.

Time to evolve. We will survive.

[quote]What a nutty loop. Crap up cities with bad policy and then cite crappy cities as a driving force behind WFH - [bold]and lie about WFH productivity increases when in reality quality controls and productivity have never been worse.[/bold] What I'd like to know is what exactly is keeping the wheels on the fucking bus?

And your truth about productivity is free from agenda, R57?

Working from home will reduce commuting, thereby reducing pollution and gasoline consumption. I rejoice in those changes.

[quote] Regular workers lose their income and livelihoods by economic changes and business decisions. These commercial real estate owners should be no different.

Exactly. When us worker bees become "redundant," too bad.