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So which firms would you buy puts on specifically? For instance, CBRE is a mixed portfolio and likely held up by industrial which isn't dropping.

Only in big overpriced cities. Midwest will be fine.

Every service company I know downsized their real estate commitment during the pandemic…

And quickly realized it saved lots of money…and maintained productivity.

None of these companies can bring all their workers back to the office on a full time basis.

All these companies are adopting a 2-day a week in-office rotation.

• Employees are happy keeping 3 days work-from-home.
• Companies are happy with the savings.

The new normal.

Commercial Real Estate is fukked.

Real estate is fine. Commercial real estate is not. However, your timing is off. Most CRE loans aren’t due / renewing until June. That’s when the ‘crash’ will be possible (PS it won’t bc banks are already restructuring loans).

He’s early. It’s a nothing burger until Summer.

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COMMERCIAL Real Estate is the next domino. Farmland, industrial, residential is fine. But yeah commercial is big fked.

Some of these smaller regional banks will not be able to restructure fully and will take massive hits, but that also is positive in the sense that rates won’t go up ¯_(ツ)_/¯

What suggests that most CRE loans will renew/due in June? I am keeping cash aside to acquire CRE defaults.

Imagine what it is in Albuquerque….

How many of the vacancies are subleases though?

Commercial RE Broker here. Farmland and industrial are considered commercial real estate. Basically, any property used for commercial business enterprise is considered commercial real estate.

Also, office rentals only account for about 15% of all Commercial real estate. Most of Commercial real estate is actually doing fine right now. The only guys getting hurt are those who have portfolios that mainly consist office space. Most Commercial RE companies are highly diversified and will be protected even if half the office space In the U.S collapsed.

Also pretty sure Blackstone owns a majority of the office space In the U.S and I wouldn't bet against those fucks.

CBRE is badly exposed in the SEA and Australian markets. Hemorrhaging money atm.

Yep, out smallish company is looking to expand into another building, and while basic office space is plentiful, we do light manufacturing and need a 70-30 mix of lab/light manufacturing with a 15x15 bay door and office area, which is surprisingly hard to come by.

Yes — part of the cycle

True but CBRE has also been aggressively paying down their debt which makes me think their getting ready for something big.

Amzn is 3 days in office

What would u short tho

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yeah bailing out their aussie and asian businesses - https://www.afr.com/property/commercial/high-incentives-high-vacancy-why-office-values-could-tumble-20pc-20230328-p5cvus

I’m a commercial contractor that specialized in large corporate office and call center construction pre pandemic. Haven’t built a pure office since 2019, the last one I built I’m about to gut back to a warehouse 4 years later. When people say “commercial real estate is dead” they actually mean corporate office. Warehouse/flex/production space is booming in my are, especially small and medium size spaces. In my area shithole 10k SF warehouses are commanding higher rent than class a office. We are tearing out $50/sf buildouts to make more warehouse space because the rent justifies it. Any office building with the bones to go to warehouse is an investment opportunity.

Classic light industrial set up, perfect for a little tilt wall, or Pre Engineered Metal Building if you can find an area that will let you get away with it. I work for a General contractor that builds a ton of these basically the whole length of the I35 corridor. Usually built for developers and a mix of build to suit or spec. That market is booming

how about u eat my ASS

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What’s an ETF so I can short it?

Great insight…

My comment was just observations…I’m definitely not a Real Estate expert.

What public Commercial Real Estate companies specialize in the hot Warehouse/Flex Production space?

They may be trading at a deep discount.

A good question is whether commercial or residential real estate goes first down.

Also why live in sf? High taxes, crime, and col. Move out and remote

Just got back from NYC, that place is fucked. They're barely sniffing half occupancy for offices. Medium sized and smaller cities will be fine.

INB4: Coomercial Real sTate fuked.

People forget, or might not know that in Sep '22 Gavin Newsom signed a state law opening up commercial real estate for residential development. NIMBY cities have no choice, as the location isn't re-zoned, the state just allows the construction to convert from Com to Res.

There is going to be a construction boom as commercial real estate demand and costs continue to fall, and companies start to look at what to do with their vacancies.

If you think CBRE is going to take a big hit in this, they could come out on the other side of the transition much stronger. During the boom and bust cycles of the Bay Area, especially in SF, some long term commercial tenants could use vacancy rates to argue to lower their lease. By converting to Residential, the owners have nearly no risk. Each tenant represents a smaller portion of their overall income from the building, versus dealing with larger commercial tenants, so if one of them tries to threaten to leave it's no big deal. In SF they will have 100 applications in the first hour. Or years long wait lists they can immediately pull from. A building full of $5k-$15k a month for apartments in SF will keep their revenue nearly the same.

I already know of several buildings in SF that have been commercial for 70+ years that are being converted. Some of them are offsetting the low income or below market value guidelines by doing multiple buildings at once and calling it one development. Prime location is all luxury apartments and the 10% of the low income apartments that should be there are in another building entirely.

It also shores up their street level commercial spaces because all those fucking people need coffee and food. The spaces have built-in customers. This is ground-up construction, but basically what they will try and do elsewhere

TLDR: Commercial real estate market drying up, market changes to residential, CBRE: Global Commercial Real Estate Services GRES: Global Real Estate Services.

You should join Jim Cramer's research team.

On the flipside, not in that area, but I am seeing most logistic centers hold off on opening new warehouses. The demand seems to have slowed down vs the blistering pace of expansion during covid.

Not sure if its a temporary pause due to companies being cautious or something that will hold.