I'm going to tell everyone that I live in Manhatten. They'll say, "you mean Manhattan, right?" I'll reply, "no, I mean Manhatten! Other people may live in Manhattan, but I live in Manhatten!"
The good news is it took them forever to start building the Freedom Tower. Imagine if they had not wasted so much time in courts and this tower were already on the market.
I'll bet anyone those predictions turn out to be very wrong -- you can see group think, and local-vision-itis in those predictions big time. It would be beyond amazing if the credit led recession ended up being less of a problem for NY than the tech bust in San Francisco. It would be beyond amazing if employment number like 1974 (which we are already seeing) didn't affect NY, what with NY leading the way in downsizing...
Sigh...
CR, this reads just like your projections in 2006 for modest orderly declines in occupancy and prices of housing. Didn't happen for RRE, ain't gonna happen for CRE. I can easily see the financial industry contracting to the point that NYC loses its critical mass that justifies its current valuations.
This comment is probably more philosophy and morals than economics, but.... the problem bugs me and my conscience. The answer has, IMO, major economic implications as well.
I think we'd be better off with a Swedish style bank takeover by a new administration (early on) that removed the huge uncertainty on which financial institutions and instruments are sound/solvent. Or some very strict laws/rules that forced complete bank disclosure enforced by criminal penalties measured in decades.
However, what if that complete transparency resulted in a complete crash of the financial system worldwide, with huge layoffs, civil unrest and hoarding of goods?
The question in my mind is whether in a democracy it is morally OK to hide things from the public because you fear greater consequences from disclosure than you fear the lack of confidence in the institutions and financial forms (cash money, T-bills, LOC's, etc.).
The hide-the-problem solution seems to be the prevalent mode under Bush. Should Obama continue to hide the issue or disclose/force disclosure?
I can't reconcile actors in the government (Fed included) hiding the truth from the people, with an government accountable to the government in a democracy. To justify the hiding is to accept that "if the President does it, it's legal" (the Nixon/Bush/Cheney doctrine). That is the definition of rule by dictat, whether it is a single leader or an aristocratic/ologopolistic set of overlords both in and out of government.
My sense of things is that a moral person, having taken an oath to protect the nation and constitution cannot justify acting such that the public is being mislead about crucial-to-survival matters.
Or, should the citizens/voters just allow big daddy to set the rules and go to their bedroom and play online games and listen to music?
ArtVandelay: You sir are a marine biologist and a fraud.
Not sure if this qualifies as a thought experiment, but, is 50% office vacancy reasonable to anticipate? Seems about right for retail. 30-40% unemployment? It's possible, but is it probably too at this point?
JimPortlandOR - I assume you were asking not about the "Fire in the theater!" truth but about the "Blood, toil, tears and sweat" truth.
I am with you on this one (I already argued this point in the past). Obama should not be silently supporting the expectations that his stimulus will bring the economic groove back. He should tell the nation what the new equilibrium is likely to look like.
"Elviswrites: \t"Word has it that 3 floors of the Lipstick Building at 57th and 3rd are coming on the market. RK"
Sounds like a good place for a brothel. \t Elvis | \t \t \t \t12.23.08 - 7:43 pm | #" Well, a lot of people have been reportedly been screwed over there big-time recently.
The new growth industry is making vodoo dolls of bankers.
"When she isnt leading one of the almost daily acts of protest in this land devastated by the global financial meltdown, Hauksdottir sells good luck charms made from the claws of ptarmigans, a local bird, and voodoo dolls in the form of bankers. She says she expects to lose her home, worth less than when she bought it two years ago, after the amount she owes jumped more than 20 percent."
...
"With leasing activity languishing and tenant space choices growing exponentially, it is not surprising that the overall asking rent for Manhattan dropped by 4 percent from the previous quarter," Mark Jaccom, FirstService Williams chief executive, said in a statement.
By Hui-yong Yu
Dec. 22 (Bloomberg) -- U.S. commercial properties at risk of default could triple if rental income from office, retail and apartment buildings drops by even 5 percent, a likely possibility given the recession, according to research by New York-based real estate analysts at Reis Inc.
Lenders that used optimistic rent estimates to grant mortgages beginning in 2005 stand to lose as much as $23.1 billion, or 7.02 percent, of total unpaid balances if landlords lose 5 percent of net operating income, according to Reis. Analysts examined data on 22,890 properties that together may account for unpaid loans of about $329 billion in 2009, said Victor Calanog, director of research.
Banks are at risk as office vacancies are forecast to rise to 15.6 percent next year from an estimated 14.6 percent at the end of 2008. Lenders who sold commercial mortgage-backed securities to pension funds, investment banks and foreign governments have been hit by more than $1 trillion in losses and asset writedowns connected to bad residential loans.
A large decline in net operating income isnt necessary to shift a lot of properties underlying CMBS loans into debt- service coverage ratios that would be worrisome, Calanog said in an interview.
Anonymous(Unrated) writes: Jim, Is it possible we have become too big to be a democracy?
Maybe too big to govern.
Not too big to govern some certain way.
An autocrat would have the same problems unless he reformed the administration and rebuilt it regionally -- that is, achieved the same solution under the guise of unitary rule and gave his satraps autonomy.
He'd turn into a figurehead shortly thereafter if he was successful.
Look. Anyone predicting a quick turnaround in 2009 must have some type of vested interest in furthering that belief.
If I tell you don't expect a turnaround until 2010, you'll fire me. The scam of these folks is that they can keep on making predictions, because; I guess, no one is holding them to their predictions.
I had a long drawn out discussion with a co-worker. He bought a multi-million dollar house in the beginning of 2008 and told me I should buy a house; the bottom is going to be in and the end of 2009 will be the "buying opportunity of a lifetime!" (for stocks).
I tried pointing to him that I just don't understand the demographics. If all of the boomers are getting older they will be all trying to sell their houses and downgrade, and furthermore with job losses mounting there will be less money saved up and more people will have to draw out of their 401(k) and other savings in the market. He just called me a gloomerdoomer...
Anonymous: I have experience with "democratic" communities of between 300-1000 residents and it breaks down at that size too. Uncle Billy Vs. Mt. Pelerin | Homepage | 12.23.08 - 7:58 pm | #
Gladwell pegged this tipping point at 150 ppl. I'm not opposed to the idea of splitting the nation up into smaller units. We could call them "States" and give each its own government. I think 50 is a good, round number to start off with.
/sarc off
It's hard to see how CRE isn't going to absolutely crash, particularly in some of these "high-growth" markets in the south and west. I was recently reminded that occupancy rates here in Dallas got down in the 60%-range in the 80s. That said, BB&H may be able to prop up the FSI enough to prop up Manhattan occupancy rates.
A begging letter just sent out by the American Civil Liberties Union reveals that the organization, which has taken on such an important role in recent years with its battles against the Bush administration's assaults on due process and revival of the use of torture, is a victim of the Bernard Madoff Ponzi scheme.
OT - For the person who wanted to receive David Rosenberg's daily e-mails. I tried e-mailing him. Amazingly enough, he replied and told me that only the ML sales rep is allowed to do that. Does anybody know how to get this done free
I was recently reminded that occupancy rates here in Dallas got down in the 60%-range in the 80s. That said, BB&H may be able to prop up the FSI enough to prop up Manhattan occupancy rates.
Signed,
The Honey Baked Ham Czar
RockyR
Speaking of Dallas:
09:05 PM CST on Friday, December 19, 2008
By STEVE BROWN / The Dallas Morning News stevebrown@dallasnews.com
While most of the bad real estate news here so far has been about housing, billions of dollars in commercial properties could also be at risk, a new report shows.
More than $260 million in Dallas commercial real estate deals are already in trouble, and another $2.5 billion are potentially threatened, according to the study by New York-based Real Capital Analytics.
The research and consulting firm looked at commercial properties all over the country to find which ones were in loan default or facing future problems.
It identified more than $100 billion in distressed commercial properties, including shopping centers, offices and hotels.
Real Capital Analytics
A new study finds that billions of dollars in commercial property deals are in trouble or face loan default across the country.
View larger More photos Photo store "A wave of defaults and foreclosures has hit the commercial property market, and the magnitude of the situation is becoming clear," Real Capital Analytics researchers say in the report. "Truly distressed situations, where the mortgage is in default, the owner is bankrupt or the property has already been foreclosed, total approximately $25.7 billion, encompassing well over 1,000 significant assets."
More than a dozen of those properties are in North Texas, and analysts identified another 117 commercial real estate deals here that could be headed for problems.
"The distress is light now but may be coming," said managing director Dan Fasulo. "The Texas markets may be three to six months behind the slowdown in the rest of the country."
Dallas-Fort Worth ranks 11th nationally on Real Capital Analytics' list of U.S. markets with the highest volume of problem or potentially troubled commercial real estate deals.
New York, Los Angeles and Las Vegas top the list. Most of the distressed properties are in the Northeast, West and Florida.
The more than 3,700 troubled real estate deals researchers are tracking nationwide include properties that have financing that must be renewed next year. The credit crunch has made it difficult for many borrowers to arrange loans for commercial real estate deals.
"It is no surprise that trouble has emerged first and is currently the greatest for development projects, where an estimated $7 billion in construction financing is in default or already foreclosed," the researchers said. "The retail sector has the largest pipeline of potentially troubled properties."
Federalism definitely is no longer tenable--states inducing companies to move is obscenely counterproductive. The pro union states (labor union but blue grey kinda fits also) and the "right to work" states might split and remain in a common market. The red/blue split in politics is indeed indicative of seperate ideologies--and might prefer different types of governments.
Put another way, we weren't, and still are not quite one nation under god--divisible might be worth a try. The economy is going to get much tougher, and not even a Lincoln/FDR might be able to keep the nation together.
That should be 'you're' as in you (me) are boring the cat. Not the possessive 'your' which means mine, some thing I possess, some ideal I admire, some collectible found along the way.
And no, I am not boring the cat. She's a resuce cat who found us. It was exactly what my wife imagined. And now we have a cat named Cat Cat. She wants to play, I feed her, I clean the clumps and turds from the box.
RockyR - there's a slew of organizational management research that suggests 150 is a trigger point for a company growing, at which point they need to radically reorganize from IPO practice to mid-cap. Leadership, management, allocation of resources, and addressing risk all need to change along with that. Before I came to a big outfit I was in a small one facing just that, and the process has been wrenching, even watching from arms-length. I think the old outfit will come through because the basic culture is quite cohesive and commitment-based, but if it had been otherwise, eg based on founder's personal drive, with less than healthy work practices it would have busted.
That should be 'you're' as in you (me) are boring the cat. Not the possessive 'your' which means mine, some thing I possess, some ideal I admire, some collectible found along the way.
It's gonna be 9mm and SKS's v. the high end plastic white dudes assault rifles.
nova | Homepage | 12.23.08 - 8:12 pm | #
Hmmmm. Spoken like one who doesn't know what it means. One who may have dodged the actual event. You know, the point where it's us and them. We know where they are. They know where we are. And we intend to kill them.
So much talk about democracy makes me wonder if anyone is left who understands that we are supposed to have a constitutional republic. Democracy is mob rule and will always infringe on the rights of the minority(or the majority when the votes are counted by a minority) whether there are 3 people or 3 billion.
300 Capitol Mall Sacramento, CA 95814 916.445.2636 www.controller.ca.gov CONTROLLER JOHN CHIANG STATE OF CALIFORNIA
PR08:068 FOR IMMEDIATE RELEASE: CONTACT: HALLYE JORDAN DECEMBER 23, 2008 916-445-2636
Controller Chiang Calls for Federal Guarantee to Restart Public Works Projects
SACRAMENTO â In a letter to President-elect Obama's transition team and the California Congressional Delegation, State Controller John Chiang today recommended a federally guaranteed infrastructure financing program to stimulate the economy, promote lending confidence, and infuse capital to state and local governments for public works projects. Signatories also include the California State Association of Counties, the League of California Cities, and the State Building and Construction Trades Council of California.
CashOnlyHousing writes:
So much talk about democracy makes me wonder if anyone is left who understands that we are supposed to have a constitutional republic.
there's a slew of organizational management research that suggests 150 is a trigger point for a company growing, at which point they need to radically reorganize
That's Coase, transaction costs.
Companies become bureaucratic in order to grow larger, not vice versa.
Speaking of Dallas: 09:05 PM CST on Friday, December 19, 2008 By STEVE BROWN / The Dallas Morning News stevebrown@dallasnews.com Anonymous | 12.23.08 - 8:10 pm | #
Thank you for the article, Anonymous. I've been calling this warning to the locals and they have not been listening. It hasn't been more than 3 months since I overheard Vance Miller saying that commercial real estate is a wonderful place to be right now.
My hypothesis: if CRE takes a dump, we'll be in trouble down here. Add what's happening to oil and you have a bunch of rednecks in dire straights
Folks, I recently released my December Strategy report. If you want a copy, shoot me an e-mail at dhvd_2004@yahoo.com and I'll shoot you a copy. sort of my way of saying thanks to the posters here (CR always gets a copy). You will recognize a fair number of the charts.
Exit, the company puts it behind the Premium wall, actually not too bad a deal, about $12 a month and get access to lots (1000+) of individual stock reports. Dont tell my boss I'm sending it for free here, but some how dont really think I'm causing lost sales. You can find my work e-mail on the site, but posted personal e-mail above. Not at the office right now and dont feel like logging on to the VPN (moves like molasas outside right now in Chicago)
In Huang, 1587, he makes explicit reference to capture of the imperial policy apparatus by vested interests.
I am lazy, so I haven't checked his footnotes yet, but is there a Chinese language literature you know of on policy apparatus compromise and decay? Not just organizational -- which is a pretty well-beaten threshing floor -- but in the organic context of state failure?
Not sure about the state of Chinese language political economy scholarship. Can you even tell me where to look?
I am finishing Olson and about to run through Tainter maybe next week and I feel like I'm shortly to run up against the edge of the English-lang lit on the subject.
As yoou can see from the graph NY RE is used to cyclical vacancy rates and rents.
There is also a counter-cycle movement which tends to bring tenants who are in cheaper space in the 'burbs back into the Apple.
And for the older spaces, there is a lot of demand from non-traditional tenants and even residential use.
New York is different from the rest of America and has been since it was founded by the Dutch early in the 1600's.
" Volker the Viking writes:
CashOnlyHousing writes:
So much talk about democracy makes me wonder if anyone is left who understands that we are supposed to have a constitutional republic.
Manhat
Manhattan (damn you , HaloScan!)
Mn'ht'den
Maybe they should try lowering their rents.
I'm going to tell everyone that I live in Manhatten. They'll say, "you mean Manhattan, right?" I'll reply, "no, I mean Manhatten! Other people may live in Manhattan, but I live in Manhatten!"
Trade it for a spice island.
C
But I thought Manhattan was different? Rents and RE never go down in Manhattan!
The Federal Government needs to create a program to reverse this trend. Obvious name would be "The Manhattan Project".
I cannot wait to open a five floor paintball business in the Chrysler building.
The good news is it took them forever to start building the Freedom Tower. Imagine if they had not wasted so much time in courts and this tower were already on the market.
Same digits for a year from now, just rearrainged.
ArtVandelay - How is the architecture business....
I've got an idea for the vacancies. Boat and Motorhome storage.
It's pied-à-terre time!
"I keep my RV in SoHo."
"I keep my boat in Midtown."
"Let's go to the Chrysler Building to play paintball, and then we can go to Times Square now that the Peep Shows are back."
First we take Manhattan, then we take Berlin.
"crispy&colewrites:
\tArtVandelay - How is the architecture business...."
Lousy, together with my import-export income.
Lucky for me, my earnings as a latex salesman have been stable...
The Manhattan Project
'What we need is a super swap to cancel out all other swaps that won't accidentally light the atmosphere on fire.
Word has it that 3 floors of the Lipstick Building at
57th and 3rd are coming on the market.
I wonder if that Manhattan rent surcharge will be taken off the clients' bills. Probably not.
I'll bet anyone those predictions turn out to be very wrong -- you can see group think, and local-vision-itis in those predictions big time. It would be beyond amazing if the credit led recession ended up being less of a problem for NY than the tech bust in San Francisco. It would be beyond amazing if employment number like 1974 (which we are already seeing) didn't affect NY, what with NY leading the way in downsizing...
More fabulous prediction from 'economists
"Word has it that 3 floors of the Lipstick Building at
57th and 3rd are coming on the market.
RK"
Sounds like a good place for a brothel.
Sigh...
CR, this reads just like your projections in 2006 for modest orderly declines in occupancy and prices of housing. Didn't happen for RRE, ain't gonna happen for CRE. I can easily see the financial industry contracting to the point that NYC loses its critical mass that justifies its current valuations.
[repost from dead thread below]
This comment is probably more philosophy and morals than economics, but.... the problem bugs me and my conscience. The answer has, IMO, major economic implications as well.
I think we'd be better off with a Swedish style bank takeover by a new administration (early on) that removed the huge uncertainty on which financial institutions and instruments are sound/solvent. Or some very strict laws/rules that forced complete bank disclosure enforced by criminal penalties measured in decades.
However, what if that complete transparency resulted in a complete crash of the financial system worldwide, with huge layoffs, civil unrest and hoarding of goods?
The question in my mind is whether in a democracy it is morally OK to hide things from the public because you fear greater consequences from disclosure than you fear the lack of confidence in the institutions and financial forms (cash money, T-bills, LOC's, etc.).
The hide-the-problem solution seems to be the prevalent mode under Bush. Should Obama continue to hide the issue or disclose/force disclosure?
I can't reconcile actors in the government (Fed included) hiding the truth from the people, with an government accountable to the government in a democracy. To justify the hiding is to accept that "if the President does it, it's legal" (the Nixon/Bush/Cheney doctrine). That is the definition of rule by dictat, whether it is a single leader or an aristocratic/ologopolistic set of overlords both in and out of government.
My sense of things is that a moral person, having taken an oath to protect the nation and constitution cannot justify acting such that the public is being mislead about crucial-to-survival matters.
Or, should the citizens/voters just allow big daddy to set the rules and go to their bedroom and play online games and listen to music?
well, let's get moving on that CRE bailout!!
CR - they are talking about this issue on Talking Points Memo
and have referenced your post on the CRE bailout request
ArtVandelay: You sir are a marine biologist and a fraud.
Not sure if this qualifies as a thought experiment, but, is 50% office vacancy reasonable to anticipate? Seems about right for retail. 30-40% unemployment? It's possible, but is it probably too at this point?
"JimPortlandOR writes:
[repost from dead thread below]"
Keep it at the dead thread.
JimPortlandOR - I assume you were asking not about the "Fire in the theater!" truth but about the "Blood, toil, tears and sweat" truth.
I am with you on this one (I already argued this point in the past). Obama should not be silently supporting the expectations that his stimulus will bring the economic groove back. He should tell the nation what the new equilibrium is likely to look like.
Q: Did you hear of the economist who dove into his swimming pool and broke his neck?
A: He forgot to seasonally adjust his pool.
Dirk(Good) writes:
\tSame digits for a year from now, just rearrainged.
\t Dirk | \t \t \tHomepage | \t12.23.08 - 7:34 pm | #
Dirk | Homepage | 12.23.08 - 7:34 pm | #
Is that re-arraigned, as in they get to be arraigned again? Whose court? Isn't Madoff in the NY let-white-collar-crims-go-free court?
Or re-arranged, as in deck chairs, Titanic?
I'd put a smiley face here but fear retribution.
"Elviswrites:
\t"Word has it that 3 floors of the Lipstick Building at
57th and 3rd are coming on the market.
RK"
Sounds like a good place for a brothel.
\t Elvis | \t \t \t \t12.23.08 - 7:43 pm | #"
Well, a lot of people have been reportedly been screwed over there big-time recently.
er, "probable too at this point."
Jim, Is it possible we have become too big to be a democracy?
Jim, Is it possible we have become too big to be a democracy?
Anonymous
That is a possibility. Then the question becomes 'one nation, oligopoly' or 'several nations, democracy. I'd favor the later.
Anonymous: I have experience with "democratic" communities of between 300-1000 residents and it breaks down at that size too.
The new growth industry is making vodoo dolls of bankers.
"When she isnt leading one of the almost daily acts of protest in this land devastated by the global financial meltdown, Hauksdottir sells good luck charms made from the claws of ptarmigans, a local bird, and voodoo dolls in the form of bankers. She says she expects to lose her home, worth less than when she bought it two years ago, after the amount she owes jumped more than 20 percent."
Iceland ‘Like Chernobyl’ as Meltdown Shows Anger Can Boil Over - Bloomberg.com
...
"With leasing activity languishing and tenant space choices growing exponentially, it is not surprising that the overall asking rent for Manhattan dropped by 4 percent from the previous quarter," Mark Jaccom, FirstService Williams chief executive, said in a statement.
By Hui-yong Yu
Dec. 22 (Bloomberg) -- U.S. commercial properties at risk of default could triple if rental income from office, retail and apartment buildings drops by even 5 percent, a likely possibility given the recession, according to research by New York-based real estate analysts at Reis Inc.
Lenders that used optimistic rent estimates to grant mortgages beginning in 2005 stand to lose as much as $23.1 billion, or 7.02 percent, of total unpaid balances if landlords lose 5 percent of net operating income, according to Reis. Analysts examined data on 22,890 properties that together may account for unpaid loans of about $329 billion in 2009, said Victor Calanog, director of research.
Banks are at risk as office vacancies are forecast to rise to 15.6 percent next year from an estimated 14.6 percent at the end of 2008. Lenders who sold commercial mortgage-backed securities to pension funds, investment banks and foreign governments have been hit by more than $1 trillion in losses and asset writedowns connected to bad residential loans.
A large decline in net operating income isnt necessary to shift a lot of properties underlying CMBS loans into debt- service coverage ratios that would be worrisome, Calanog said in an interview.
Anonymous(Unrated) writes:
Jim, Is it possible we have become too big to be a democracy?
Maybe too big to govern.
Not too big to govern some certain way.
An autocrat would have the same problems unless he reformed the administration and rebuilt it regionally -- that is, achieved the same solution under the guise of unitary rule and gave his satraps autonomy.
He'd turn into a figurehead shortly thereafter if he was successful.
There have been a flurry of posts, all real estate related. Is CR granting us an early Xmas present?
O! Merry Christmas everybody. I'm home alone, just me and the cat. And we've run out of things to talk about.
Look. Anyone predicting a quick turnaround in 2009 must have some type of vested interest in furthering that belief.
If I tell you don't expect a turnaround until 2010, you'll fire me. The scam of these folks is that they can keep on making predictions, because; I guess, no one is holding them to their predictions.
I had a long drawn out discussion with a co-worker. He bought a multi-million dollar house in the beginning of 2008 and told me I should buy a house; the bottom is going to be in and the end of 2009 will be the "buying opportunity of a lifetime!" (for stocks).
I tried pointing to him that I just don't understand the demographics. If all of the boomers are getting older they will be all trying to sell their houses and downgrade, and furthermore with job losses mounting there will be less money saved up and more people will have to draw out of their 401(k) and other savings in the market. He just called me a gloomerdoomer...
Anonymous: I have experience with "democratic" communities of between 300-1000 residents and it breaks down at that size too.
Uncle Billy Vs. Mt. Pelerin | Homepage | 12.23.08 - 7:58 pm | #
Gladwell pegged this tipping point at 150 ppl. I'm not opposed to the idea of splitting the nation up into smaller units. We could call them "States" and give each its own government. I think 50 is a good, round number to start off with.
/sarc off
It's hard to see how CRE isn't going to absolutely crash, particularly in some of these "high-growth" markets in the south and west. I was recently reminded that occupancy rates here in Dallas got down in the 60%-range in the 80s. That said, BB&H may be able to prop up the FSI enough to prop up Manhattan occupancy rates.
Signed,
The Honey Baked Ham Czar
And we've run out of things to talk about.
Volker the Viking | 12.23.08 - 8:04 pm
Your boring the cat?
I'd put a smiley face here but fear retribution.
Exit | Homepage | 12.23.08 - 7:52 pm | #
LOL, meant the later, would like to see the former.
sort of an off the cuff prediction of 19.0% vacancy rate by end of 09.
ACLU hit by Madoff Ponzi scheme.
A begging letter just sent out by the American Civil Liberties Union reveals that the organization, which has taken on such an important role in recent years with its battles against the Bush administration's assaults on due process and revival of the use of torture, is a victim of the Bernard Madoff Ponzi scheme.
ACLU hit by Madoff Ponzi scheme
How come we never get a post on downtown Lancaster, PA? They have CRE. They are American.
nova writes:
And we've run out of things to talk about.
Volker the Viking | 12.23.08 - 8:04 pm
Your boring the cat?
DMI - disturbing mental imagery.
OT - For the person who wanted to receive David Rosenberg's daily e-mails. I tried e-mailing him. Amazingly enough, he replied and told me that only the ML sales rep is allowed to do that. Does anybody know how to get this done free
Ok, sufficiently horrified now. See you next year.
Me thinks that all of the big banks are just a Madoff Ponzi scheme, with no there there.
I was recently reminded that occupancy rates here in Dallas got down in the 60%-range in the 80s. That said, BB&H may be able to prop up the FSI enough to prop up Manhattan occupancy rates.
Signed,
The Honey Baked Ham Czar
RockyR
Speaking of Dallas:
09:05 PM CST on Friday, December 19, 2008
By STEVE BROWN / The Dallas Morning News
stevebrown@dallasnews.com
While most of the bad real estate news here so far has been about housing, billions of dollars in commercial properties could also be at risk, a new report shows.
More than $260 million in Dallas commercial real estate deals are already in trouble, and another $2.5 billion are potentially threatened, according to the study by New York-based Real Capital Analytics.
The research and consulting firm looked at commercial properties all over the country to find which ones were in loan default or facing future problems.
It identified more than $100 billion in distressed commercial properties, including shopping centers, offices and hotels.
Real Capital Analytics
A new study finds that billions of dollars in commercial property deals are in trouble or face loan default across the country.
View larger More photos Photo store "A wave of defaults and foreclosures has hit the commercial property market, and the magnitude of the situation is becoming clear," Real Capital Analytics researchers say in the report. "Truly distressed situations, where the mortgage is in default, the owner is bankrupt or the property has already been foreclosed, total approximately $25.7 billion, encompassing well over 1,000 significant assets."
More than a dozen of those properties are in North Texas, and analysts identified another 117 commercial real estate deals here that could be headed for problems.
"The distress is light now but may be coming," said managing director Dan Fasulo. "The Texas markets may be three to six months behind the slowdown in the rest of the country."
Dallas-Fort Worth ranks 11th nationally on Real Capital Analytics' list of U.S. markets with the highest volume of problem or potentially troubled commercial real estate deals.
New York, Los Angeles and Las Vegas top the list. Most of the distressed properties are in the Northeast, West and Florida.
The more than 3,700 troubled real estate deals researchers are tracking nationwide include properties that have financing that must be renewed next year. The credit crunch has made it difficult for many borrowers to arrange loans for commercial real estate deals.
"It is no surprise that trouble has emerged first and is currently the greatest for development projects, where an estimated $7 billion in construction financing is in default or already foreclosed," the researchers said. "The retail sector has the largest pipeline of potentially troubled properties."
JimPortlandOR | 12.23.08 - 7:43 pm
Yep ...
Federalism definitely is no longer tenable--states inducing companies to move is obscenely counterproductive. The pro union states (labor union but blue grey kinda fits also) and the "right to work" states might split and remain in a common market. The red/blue split in politics is indeed indicative of seperate ideologies--and might prefer different types of governments.
Put another way, we weren't, and still are not quite one nation under god--divisible might be worth a try. The economy is going to get much tougher, and not even a Lincoln/FDR might be able to keep the nation together.
ova writes: Your boring the cat?
That should be 'you're' as in you (me) are boring the cat. Not the possessive 'your' which means mine, some thing I possess, some ideal I admire, some collectible found along the way.
And no, I am not boring the cat. She's a resuce cat who found us. It was exactly what my wife imagined. And now we have a cat named Cat Cat. She wants to play, I feed her, I clean the clumps and turds from the box.
She doesn't appreciate me.
Paintball fanatics I laugh at you! I sneer. I look at your posts with an arched eyebrow of disdain.
It's gonna be 9mm and SKS's v. the high end plastic white dudes assault rifles.
Vic,
He's telling you to open an account at Merrill.
RockyR - there's a slew of organizational management research that suggests 150 is a trigger point for a company growing, at which point they need to radically reorganize from IPO practice to mid-cap. Leadership, management, allocation of resources, and addressing risk all need to change along with that. Before I came to a big outfit I was in a small one facing just that, and the process has been wrenching, even watching from arms-length. I think the old outfit will come through because the basic culture is quite cohesive and commitment-based, but if it had been otherwise, eg based on founder's personal drive, with less than healthy work practices it would have busted.
C
C
That should be 'you're' as in you (me) are boring the cat. Not the possessive 'your' which means mine, some thing I possess, some ideal I admire, some collectible found along the way.
Wow, I can see how you could bore a cat.
Bond Girl --
He's telling you to open an account at Merrill.
One of my credit cards is with Bank of America. I wonder if that counts?
Anonymous | 12.23.08 - 8:11 pm | # was me.
Viking:
Maybe your cat should be called Here Kitty Kitty. He could then go by his middle name.
It's gonna be 9mm and SKS's v. the high end plastic white dudes assault rifles.
nova | Homepage | 12.23.08 - 8:12 pm | #
Hmmmm. Spoken like one who doesn't know what it means. One who may have dodged the actual event. You know, the point where it's us and them. We know where they are. They know where we are. And we intend to kill them.
Not so sure I'd want you on my side.
She doesn't appreciate me
I told you before...
girth matters.
.
I'd be happy if Bank of America closed shop and sold the name to some SF bank that cared about customers. Repatriate that name!
So much talk about democracy makes me wonder if anyone is left who understands that we are supposed to have a constitutional republic. Democracy is mob rule and will always infringe on the rights of the minority(or the majority when the votes are counted by a minority) whether there are 3 people or 3 billion.
OT, from the desk of the CA State Controller:
300 Capitol Mall
Sacramento, CA 95814
916.445.2636
www.controller.ca.gov
CONTROLLER JOHN CHIANG
STATE OF CALIFORNIA
PR08:068
FOR IMMEDIATE RELEASE: CONTACT: HALLYE JORDAN
DECEMBER 23, 2008 916-445-2636
Controller Chiang Calls for Federal Guarantee
to Restart Public Works Projects
SACRAMENTO â In a letter to President-elect Obama's transition team and the California
Congressional Delegation, State Controller John Chiang today recommended a federally
guaranteed infrastructure financing program to stimulate the economy, promote lending
confidence, and infuse capital to state and local governments for public works projects.
Signatories also include the California State Association of Counties, the League of California
Cities, and the State Building and Construction Trades Council of California.
###
CashOnlyHousing writes:
So much talk about democracy makes me wonder if anyone is left who understands that we are supposed to have a constitutional republic.
I do. And I support the notion.
Not so sure I'd want you on my side.
Volker the Viking | 12.23.08 - 8:16 pm
It's ok. I will go with the cat. We will be sure to wave good-bye.
It's ok. I will go with the cat. We will be sure to wave good-bye.
nova | Homepage | 12.23.08 - 8:18 pm | #
Bye, bye!
Exit --
Wouldn't it be great if the Obama team responded with a "pre-packaged bankruptcy" proposal for the state of CA?
Nemo,
It would be really funny if you called the 1-800 number on the back of your card and requested economic research reports.
there's a slew of organizational management research that suggests 150 is a trigger point for a company growing, at which point they need to radically reorganize
That's Coase, transaction costs.
Companies become bureaucratic in order to grow larger, not vice versa.
I was thinking today that CA will not do anything about the problem. Why bother. They figure the federal gov will rescue them.
Nemo-
With Maria as trustee?
Asia seems to be unhappy tonight.
You know, the Bi-coastal Kennedy's running the show. Maria in Calli, and Caroline in NY.
(Counterpointer - this vid's for you....)
Speaking of Dallas:
09:05 PM CST on Friday, December 19, 2008
By STEVE BROWN / The Dallas Morning News
stevebrown@dallasnews.com
Anonymous | 12.23.08 - 8:10 pm | #
Thank you for the article, Anonymous. I've been calling this warning to the locals and they have not been listening. It hasn't been more than 3 months since I overheard Vance Miller saying that commercial real estate is a wonderful place to be right now.
My hypothesis: if CRE takes a dump, we'll be in trouble down here. Add what's happening to oil and you have a bunch of rednecks in dire straights
Rednecks - what about these poor people...
2009 The year of the noK
Starbucks Corp. told employees the company will no longer guarantee that it will make a company match to their 401(k) accounts next year.
Ah, Manflatten. Well at least I have my lease payments invested with Madoff. That guy really keeps beating the numbers.
Boy, being disconnected from the grid for the month is refreshing. Gotta get caught up on some news.
Nostrovia,
Where you been Misean? Your fans have missed you
Hey, Misean! Welcome back.
Folks, I recently released my December Strategy report. If you want a copy, shoot me an e-mail at
dhvd_2004@yahoo.com and I'll shoot you a copy. sort of my way of saying thanks to the posters here (CR always gets a copy). You will recognize a fair number of the charts.
Boy, being disconnected from the grid for the month is refreshing. Gotta get caught up on some news.
Nostrovia,
Comrade Misean is Dope | Homepage | 12.23.08 - 8:29 pm | #
Did you have somebody pick up your paper everyday? Do you have the Dec Strategy Report?
ew thread
Dirk, is it on your home page?
Broward - Coase early, a bit of Meyerson late. A number of lesser lights in the betweening years.
C
So what's the best empty-Manhattan dystopia movie soundtrack for our thread music?
Vanilla Sky?
Escape from New York?
The Day After Tomorrow?
I Am Legend?
I'm sure there are several others I'm not thinking of at the moment...
Ah, let's go with this YouTube
- Broadcast Yourself.
Exit, the company puts it behind the Premium wall, actually not too bad a deal, about $12 a month and get access to lots (1000+) of individual stock reports. Dont tell my boss I'm sending it for free here, but some how dont really think I'm causing lost sales. You can find my work e-mail on the site, but posted personal e-mail above. Not at the office right now and dont feel like logging on to the VPN (moves like molasas outside right now in Chicago)
Hey Counterpointer.
Had a Q for you --
In Huang, 1587, he makes explicit reference to capture of the imperial policy apparatus by vested interests.
I am lazy, so I haven't checked his footnotes yet, but is there a Chinese language literature you know of on policy apparatus compromise and decay? Not just organizational -- which is a pretty well-beaten threshing floor -- but in the organic context of state failure?
Not sure about the state of Chinese language political economy scholarship. Can you even tell me where to look?
I am finishing Olson and about to run through Tainter maybe next week and I feel like I'm shortly to run up against the edge of the English-lang lit on the subject.
Shnaps(Unrated) writes:
So what's the best empty-Manhattan dystopia movie soundtrack for our thread music?
"Future Legend" / "Diamond Dogs"
As yoou can see from the graph NY RE is used to cyclical vacancy rates and rents.
There is also a counter-cycle movement which tends to bring tenants who are in cheaper space in the 'burbs back into the Apple.
And for the older spaces, there is a lot of demand from non-traditional tenants and even residential use.
New York is different from the rest of America and has been since it was founded by the Dutch early in the 1600's.
" Volker the Viking writes:
CashOnlyHousing writes:
So much talk about democracy makes me wonder if anyone is left who understands that we are supposed to have a constitutional republic.
I do. And I support the notion.
Volker the Viking | 12.23.08 - 8:17 pm | # "
Glad somebody remembered that-
Comrade Byzantine_Ruins (Un-fucking-rated?! What up wit dat?) writes:
Shnaps..blah blah etc.
Thanks, Byz. My netflix queue needed some inspiration.
YouTube - A Walk On The Wild Side
Dig it.
Manhattan in bad times.
Starting up the economy in 2009:
YouTube - CRANKING A 1947 DODGE
Oops, bad link. try this one:
YouTube -
remember that great take-off on Woody's Manhattan on SNL with Rick Moranis and Rodney Dangerfield titled 'Manhassett'?
Conterpointer:
on my way down to that spice island very soon