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See through buildings everywhere here as well. Old strip malls are vacant and every new one has a for lease sign on it. Seeing "Free Rent" and "Low Rent" signs popping up now.
CR, In a jobless recovery how many new office buildings were really needed? My guess is not many. Anything built above not many is significant oversupply. Especially since the only new jobs during this time, real estate and mortgage related, are going away. I believe it will get ugly for CRE. Very ugly.
so what does it all means ? i.e. why do you think the recession will not be severe. Was it just over calculation on the part of builders and developers or is it that EVERYBODY where making economic projection way up in the air and soon we see a reduction in everything that was planned to be in those buildings:
Less cisco routers, less PCs, less air condition, less hiring....
If I was the landlord of one of these buildings, I would offer free parking.
If you see some cars in the lot, it doesn't look so dead.
Where is Lunatic Fringe?
If I were a landlord, I'd start hiding money in various oversea accounts and/or tell my investors that the CRE unexpectedly hit a brick wall and no one could have seen it coming...
It is true that the less office space you lease, the less telecom equip. and tech stuff you need to buy.
I said here last week that telecom equip. looks weak, and that's a canary in the coal mine for all of tech capx spending.
Next to the Banana Belt?
I've already seen
Move In Now and The First 3 Months are Free.
Lot's of empty warehouse space Sacramento, Stockton, and Tracy, Calif and they're still building.
jo6pac
The race to the bottom continues
The Luantic Fringe is next to the new Home Depot.
Change those "handicapped' parking spaces. Make one for Lender, and one for Trustee.
If I was the landlord of one of these buildings, I would offer free parking.
How soon til the parking space market collapses? IIRC, in some cities parking spaces went for over 200K.
<a href="http://calculatedrisk.blogspot.com/2008/07/report-wachovia-existing-wholesale.html>http://calculatedrisk.blogspot.com/2008/07/report-wachovia-existing-wholesale.html
I'm in NE Irvine. And I can actually go take pictures of the empty Home Depot parking lot a block away as well, Elvis.
See, I do know where it is.
if you drove on hghway 237 thru silicon valley in 03-04 and even today you see empty buildings everywhere....Yet they still build. We relocated behind oracle in San Mateo, thier is more unused space thier than between Bush's ears..
The Lunatic Fringe starts just east of the Pacific Ocean?
Bank Analyst Bove Sued Over 'Who Is Next' Report
Bank Analyst Bove Sued Over 'Who Is Next' Report - CNBC
Richard Bove, a prominent U.S. banking analyst, was sued Monday by BankAtlantic Bancorp, which accused him of defamation and negligence over a recently published research report, the bank said.
Interesting, their stock went from negative 10% to positive 10% right after this news broke.
I would think car dealer's could really use those parking lots
The Die Hard movie franchise will definitely be able to stay under budget.
Just a thought, the troubling thing about this build out is that demand could potentially be declining for years as more people tele-commute. I work from my home and have an executive suite I use on occasion. Of course, I pay a fee per usage and try to use a restaurant or Starbucks for meetings whenever possible.
cd,
speaking of 237, I love that pair of 6 story buildings they're building on top of the landfill in Alviso. I wonder how long it will take to fill those.
speaking of 237, I love that pair of 6 story buildings they're building on top of the landfill in Alviso. I wonder how long it will take to fill those.
Or how long it takes them to sink in to the mud that's under them.
jo6pac
Here is the nationwide office vacancy rates from Grubb and Ellis. This is where the papers are probably getting their info...
http://www.grubb-ellis.com/PDF/natmrkttrnd/markettrendoffice.pdf
CR,
Love the work!
As always thanks....
......
joe6pac,
That would be one way of filling them...
Oops that was the 1st quarter nationwide report. If you go to this site:
Grubb & Ellis :: Market Research :: Research Reports
you can select the cities for the 2nd qtr 2008 report on each city.
Guess they haven't aggregated and posted the nationwide version yet.
winston,
I can't imagine anybody renting it, if someone rented space and I was in an environmental or work injury lawyer I would be handing out cards their. Headaches from methane gas leaking from landfill into building kind of stuff....
Driving north on 101 is another sign company dream....Is thier a publically traded sign company?
EorrFU:
Thanks for the link. Now, I find out my town is going to CRE crash and burn:
While the Columbia market usually has 15,000 square feet available for sublease at any given time, there were 25,967 square feet available at the end of the fourth quarter of 2007. That number skyrocketed to 64,025 square feet available for sublease at the end of the second quarter of 2008. The increase was the largest percentage increase of all the markets tracked by Grubb & Ellis.
A few points to consider, CR:
1) The late 1990s CRE build up was never fully absorbed (in San Jose, for example)...there are see-throughs left over from 1999, which are probably tied up in some bankruptcy or other... so any new builds were probably not going to be ok.
2) globalization is reducing the demand for CRE....much moreso than the late 1990s.
So it may look like a smaller peak, but it's a sinkhole underneath this one....
If you want to see massive amounts of vacant office space in San Diego, go to the former navy facility on Point Loma that now has a few schools and 2 grocery stores anchoring a strip mall. There are some large and nicely landscaped 2-story office buildings the strip mall. The retail spaces are full, but all of the empty and semi-finished about two years after the Trader Joe's there opened with the exception of a small new age healing business.
This being San Diego, the developer won't be having any debt problems because he got some prime former navy space worth hundreds of millions of dollars for free in a complex transaction with the city.
If I were a landlord, I'd start hiding money in various oversea accounts and/or tell my investors that the CRE unexpectedly hit a brick wall and no one could have seen it coming...
If I were a landlord I'd make sure my office was on the first floor and my loved ones hid all the sharp objects...
Landlords have loved ones, right?
Vegas in trouble already and has 30,000 new hotel rooms coming online in the near future.
Video - Breaking News Videos from CNN.com
You have to pay those construction workers so they can come to the casinos and lose their wages, right?
Hotels still under construction here in downtown San Diego - at least 3 cranes up on new holes and the big Hilton (1200 rooms) to open by end year...
As for office parks see also the 15 and 94 in Riverside County - what were they thinking out there??
Does anyone know from which BEA tables this comes from? I'm having trouble trying to find it in the usual NIPA suspects.
Thanks.
Does this mean Barry Minkow is back in business with ZZZZZZZZZzbest?
The building looks much nicer with nobody in it or around it. It stands, gleaming white, as a marvelous example of cubic art, pristine and serene. I think lots more of these buildings should be kept tenant free and enjoyed as marvelous works of contemporary art. Their asthetic value outweights everything else.
think lots more of these buildings should be kept tenant free and enjoyed as marvelous works of contemporary art. Their asthetic value outweights everything else.
jim
Except when there is no gas station around and you really need to use a toilet.
Its not completely bad, AA members can now afford to rent the nicest rooms in town for their meetings.
Around my way, we have one 2-floor see-through building, and one 6 floor newly-finished commercial building that is completely empty.
Just more examples of "Mission Accomplished!"
Oh, I am posting from blue-collar zone, central Maryland, for those keeping track of the Bubble.
Its not just California, in the prime busiest retail section in Chattanooga TN. 2 new office/retail strip malls completed 6 months ago sit empty. Numerous vacancies in less than 3 year old retail strip malls a large anchor mall Hamilton Place lost its Disney store and feels more like a bazaar with kiosk vendors aggressively hawking their junk merchandise.