A surge in office construction combined with sweeping layoffs at mortgage companies lead to both higher office vacancy and higher rents in O.C. in the third quarter...
Why don't any of these layoffs seem to show up in jobless claims?
Are a lot of these real estate jobs not eligible for unemployment benefits?
A surge in office construction combined with sweeping layoffs at mortgage companies lead to both higher office vacancy and higher rents in O.C. in the third quarter ...
Excuse me, has anybody seen my housing led recession. I've been looking for it going on two years now. I thought it might be near my 600,000 lost construction jobs, but I can't seem to find those either...
Excuse me, has anybody seen my housing led recession. I've been looking for it going on two years now. I thought it might be near my 600,000 lost construction jobs, but I can't seem to find those either...
I'm also curious to know the reason behind the higher rents -- one would imagine that the laws of supply and demand would have pushed things in the opposite direction.
Bennie is getting squished into a corner in between a weakening economy and a strong stock market. Defies logic. He is going to have a tough time cutting rates and risking blowing an even bigger equities bubble. Either rate cut expectations or stock prices need to come down, both together actually.
Why don't any of these layoffs seem to show up in jobless claims?
How do you know they're not showing up in jobless claims? Roughly 300,000 new people apply for unemployment each week. You don't think some of these people are mortgage employees?
"Since Google's IPO in 2003, close to 30% of its entire revenue has been from mortgage lenders and mortgage brokers- they were the single largest advertising group in Google's universe. You have to understand that the mortgage industry standard was to spend up to $10,000 in advertising just to get ONE loan customer. No other advertising segment came anywhere near that. Not by a mile."
They raise rents while they still can, I think. Trying to make up for what they are losing elsewhere. There is a cost to moving a location, so for a while, you can get away with charging more.
Once people start moving to cheaper space, rates will drop quickly. My local pet shop is closing and moving into storage unit space, from which he will do home deliveries. I expect lots of businesses to start moving that direction. More convenient for customers, and costs less to boot. Can't beat it.
Retail office space can sit vacant for a long time before being filled and leases are typically long (i.e. multi-year) in duration. Rents for office space are therefore likely slower to come down than residential rents.
Rents were up a penny per square foot in OC from 2nd quarter to 3rd. So, they spun it as rents increasing. It takes time for the machine to slow down.
I think one of the BIG stories ahead is the number of large developers who will get trapped building big projects into a CRE crash in specific markets, like OC and Chicago now and NY City in '08. They will still be building long after markets have tanked. They will BK and take down CRE lenders with them.
A lot of these developers take out the equivalent of bridge loans, praying that more or better financing will be availale down the road. It won't be in OC. Lenders are shutting down money to big spec CRE projects.
And what about the projects that don't get started at all? Deal for a big local hotel/tourism/residential complex in my area is falling through because the developer is now unsure of of his capital funding. Expect to see a lot more of this in the papers...
A Palo Alto-based developer has decided not to proceed with plans to build an eco-tourism hotel and senior-living complex on the 13-acre Poor Clares property in Seacliff.
Clarum Homes had been in negotiations with officials from Dominican Hospital, which owns the property between Seacliff State Beach Park and Highway 1. Clarum officials decided to pull out of the purchase agreement, according to Kelly Duffin, Dominican's chief operating officer.
"The reason they did that is primarily related to what we've experienced in the financial markets access to capital funding," Duffin said. "They felt if they would proceed it would be too risky"
There is no community that typifies the housing bubble, the excessive spending, the reckless debt machine, the home of subprime, more than the infamous Orange County.
Congratulations O.C., you're #1, and you're f****d!
Rents follow demand and supply, but do they follow even more long-term interest rates?
This is actually a question to the experts. My thinking is that if LT interest rates were up, then I as a landlord would also seek higher rents, otherwise I could invest into treasuries more advantangeously. Is there a graph around?
A surge in office construction combined with sweeping layoffs at mortgage companies lead to both higher office vacancy and higher rents in O.C. in the third quarter...
Why don't any of these layoffs seem to show up in jobless claims?
Are a lot of these real estate jobs not eligible for unemployment benefits?
That's still the one great mystery to me.
Hmmm, I think they might go for at least 20% vacancy for their new record.
See throughs galore!
Commercial will be the next card to begin to fall into place.
We still have a lot more economy to downsize, let alone the number of folks on Wall Street who will be gone after massive trading collapses.
After all, if everyone is continually stealing nickels from retail, and the last retail investor throws in the towel...
Someday this war's gonna end...
A surge in office construction combined with sweeping layoffs at mortgage companies lead to both higher office vacancy and higher rents in O.C. in the third quarter ...
why higher rents?
rt
commercial space is growing, but not as much as supply?
Excuse me, has anybody seen my housing led recession. I've been looking for it going on two years now. I thought it might be near my 600,000 lost construction jobs, but I can't seem to find those either...
Stop working so hard. It will find you.
--
Reminiscent of Silly.con Valley during 2001-03
Jas
What's driving rents higher at the same time as higher vacancies?
I'm also curious to know the reason behind the higher rents -- one would imagine that the laws of supply and demand would have pushed things in the opposite direction.
Bennie is getting squished into a corner in between a weakening economy and a strong stock market. Defies logic. He is going to have a tough time cutting rates and risking blowing an even bigger equities bubble. Either rate cut expectations or stock prices need to come down, both together actually.
Why don't any of these layoffs seem to show up in jobless claims?
How do you know they're not showing up in jobless claims? Roughly 300,000 new people apply for unemployment each week. You don't think some of these people are mortgage employees?
is this true:
"Since Google's IPO in 2003, close to 30% of its entire revenue has been from mortgage lenders and mortgage brokers- they were the single largest advertising group in Google's universe. You have to understand that the mortgage industry standard was to spend up to $10,000 in advertising just to get ONE loan customer. No other advertising segment came anywhere near that. Not by a mile."
???
A lot of real estate people are self-employed (even at brokerage firms). Also the illegals have borne the brunt of the construction layouts.
They raise rents while they still can, I think. Trying to make up for what they are losing elsewhere. There is a cost to moving a location, so for a while, you can get away with charging more.
Once people start moving to cheaper space, rates will drop quickly. My local pet shop is closing and moving into storage unit space, from which he will do home deliveries. I expect lots of businesses to start moving that direction. More convenient for customers, and costs less to boot. Can't beat it.
Retail office space can sit vacant for a long time before being filled and leases are typically long (i.e. multi-year) in duration. Rents for office space are therefore likely slower to come down than residential rents.
CR
why do u think the CMBX spreads have been narrowing recently over at Markit?
Rents were up a penny per square foot in OC from 2nd quarter to 3rd. So, they spun it as rents increasing. It takes time for the machine to slow down.
I think one of the BIG stories ahead is the number of large developers who will get trapped building big projects into a CRE crash in specific markets, like OC and Chicago now and NY City in '08. They will still be building long after markets have tanked. They will BK and take down CRE lenders with them.
A lot of these developers take out the equivalent of bridge loans, praying that more or better financing will be availale down the road. It won't be in OC. Lenders are shutting down money to big spec CRE projects.
I thought it might be near my 600,000 lost construction jobs
expect to see 600,000 new flippers on ebay in the coming weeks.
And what about the projects that don't get started at all? Deal for a big local hotel/tourism/residential complex in my area is falling through because the developer is now unsure of of his capital funding. Expect to see a lot more of this in the papers...
Home - Santa Cruz Sentinel
Developer backs out of Dominican deal
A Palo Alto-based developer has decided not to proceed with plans to build an eco-tourism hotel and senior-living complex on the 13-acre Poor Clares property in Seacliff.
Clarum Homes had been in negotiations with officials from Dominican Hospital, which owns the property between Seacliff State Beach Park and Highway 1. Clarum officials decided to pull out of the purchase agreement, according to Kelly Duffin, Dominican's chief operating officer.
"The reason they did that is primarily related to what we've experienced in the financial markets access to capital funding," Duffin said. "They felt if they would proceed it would be too risky"
Excuse me, but this needs to be said:
There is no community that typifies the housing bubble, the excessive spending, the reckless debt machine, the home of subprime, more than the infamous Orange County.
Congratulations O.C., you're #1, and you're f****d!
IDOC,
YTD commercial real estate is up 40% in volume (according to the MBA). The hot money is bringing in spreads.
Mortgage companies only 4% of large buildings.
Looking at OC i would have expected at least 10-20% of large office space is mortgage related.
A New York woman is so angry at Apple Inc. for lopping $200 off the price of the iPhone that she's filed a lawsuit seeking $1 million in damages.
My Way - Money
In the WTF department.......
Rents follow demand and supply, but do they follow even more long-term interest rates?
This is actually a question to the experts. My thinking is that if LT interest rates were up, then I as a landlord would also seek higher rents, otherwise I could invest into treasuries more advantangeously. Is there a graph around?
Thanks,
O-Joe
In normal times you'd be right on rental yield matching interest rates, but we're in a greater fool enviornment, so the yield has actually shrunk.