Dear LLs: as your commercial CDO^3's end up eating themselves [and assoc. real assets], will you please lessen-up on triple-net and rents? Capitalism "works both ways," and watching storefronts sit vacant for years with ridiculous rental terms is just astonishing.
It's because those rent prices are being used as collateral for other commercial real estate property loans. The rent price used is based on the rent the previous tenant paid, not the market value of the property.
If the owner leases at a lower rent price, they will essentially get margin called on their other properties. Therefore it actually might make sense to just have the property sit vacant with a (now) ridiculous rental price.
If governments start implementing a vacancy tax that grows as vacancy duration increases, essentially forcing the market to unstick, we'd likely see a rapid implosion of commercial real estate.
> If governments start implementing a vacancy tax that grows as vacancy duration increases, essentially forcing the market to unstick, we'd likely see a rapid implosion of commercial real estate.
Doesn’t sounds like a horrible thing, but perhaps I’m not understanding what the impact would be to us “regular folk” if the commercial real estate bubble popped.
Due to fractional reserve lending, unwinding such a large cohort of debt could really cause problems. The 2008, and the 89-90 contractions both had effects beyond the notes and real estate.
Every time I explain this to people you see the 5 stages of grief go across their face, especially when it's a property that used to host their favorite restaurant or something.
I sometimes have to go back and remind myself this is really happening, it's such bullshit.
Doesn't this impugn the competence of the lenders, that their solvency metrics are being gamed so easily? Or, behind the lenders, is it a matter of gaming a government regulatory solvency test?
This isn't unintentional, if that's what you're implying.
Property ownership and property "development" has been, and is, propped up at every level, because the people making policy are, or know, the people owning property.
Hate to be that guy, but WSJ is blocking Firefox on my end for unknown reasons, whereas with a base install of Chrome it loads fine after a "human verification" process. The only way I can view this with Firefox is through an archive link. Hope it helps others. Not sure if this is something new since I rarely browse WSJ.
Change your DNS to something else that isn't using CloudFlare and this won't happen. Cloudflare isn't compatible with configurations used by archive.is . You can search "cloudflare DNS hackernews" with your favorite engine to find extensive and comprehensive details about what's happening and why.
Take control of your DNS - using your ISP's default never benefits you, and almost certainly benefits them, and almost certainly at the expense of your time, effort, and comfort. Find a DNS setup that you like that isn't using cloudflare, doesn't censor you, doesn't funnel you into walled gardens or censorship bubbles or otherwise try to position itself as a gatekeeper between you and the internet.
I wouldn't say it's non-technical. In fact his argument might be more technical than CloudFlare's position.
archive.is wants full EDNS information so they can do a proper IP-based location lookup and serve users from a local data center for speed or whatever reasons
CloudFlare does not want to expose this information for privacy reasons.
It really depends on your viewpoints on which is more important to you. But I do think calling the archive.is position to be non-technical is hard to support
I think you have misunderstood what I said. Wall Street Journal -- the website -- is blocking me. Ironically, I use Cloudflare DNS and archive.is links now work, even though they used to be an endless captcha loop.
The message I get from WSJ is the following. Note: the following does NOT happen when browsing with Chrome.
You have been blocked
Why? Something about the behaviour of the browser has caught our attention.
There are various possible explanations for this:
- You are browsing and clicking at a speed much faster than expected of a human being.
- Something is preventing JavaScript from working on your computer.
- There is a robot on the same network as you.
I am used to these kind of sites calling me a robot, so I guess the third point is true to some extent :)
P.S. I had to change the Accept-Language headers in Firefox to get this message in English. Otherwise I get machine-translated gibberish, which is ironic considering the page is accusing me of being a machine.
I've seen Firefox-only blocking at WSJ before. Today, when I visit their front page with Firefox, I see the same message you get.
But when I load the OP's article I see a white screen with the following page code behind it (ublock disabled).
<html><head><title>wsj.com</title><style>#cmsg{animation: A 1.5s;}@keyframes A{0%{opacity:0;}99%{opacity:0;}100%{opacity:1;}}</style></head><body style="margin:0"><p id="cmsg">Please enable JS and disable any ad blocker</p><script data-cfasync="false"> ... host':'geo.captcha-delivery.com'}</script><script data-cfasync="false" src="https://ct.captcha-delivery.com/c.js"></script></body></html>
I quite like iCloud Private Relay, and that (sometimes) uses Cloudflare DNS. The only gatekeeper here is archive.is being opinionated about which DNS's users are or aren't allowed to view their content.
My dad alleges that it's common practice for apartment/condo developers to sell the first few units with an undisclosed rebate so that the selling price is anchored to a higher point for later buyers.
Does anyone know what it means when a new condo building has many unsold units, and rents out some units?
I was recently trying to get a straight answer on whether the rentals were intended to be long-term income-producing (for the condo association, the builder, or some other party), to only be a holding pattern until more units sell (to pick up some money and/or to make the unsold units look more scarce, then maybe breaking the lease at their convenience), to demonstrate high rent potential to investor buyers of units, or something else.
* Dump the apartments on the market at a price where they will sell (which for a large property developer in a city will depress prices and is poisoning the well for their next project)
I'm wondering what their intentions mean for how long those rentals will be available.
For example: Will the renter get kicked out in 12 months, or the lease broken abruptly with a sale clause in 7 months, because the intention was holding pattern? Will the renter be able to live there 5 years, with reasonable rent increases at each lease renewal, because the goal is to be income-generating property with a stable tenant, to keep condo association fees low? Or some other intention, and how it affects the renter?
Not a property developer, but it depends on how fast the other units are bought, right? If the "many unsold" units start moving, they'll want to get the rentals off their books as well.
My guess is they won't break the lease early, but will not renew / jack up the price once the building has filled up.
Depends on who is the current owner of the unsold, rented out units. If it's the developer, the bids were probably far lower than expected but they expect the prices to rebound. In general, developers are really not in the business of rentals. They don't have the financing for it or the capacity for it and they needed to sell to free up financing for the next project. They're not set up to be holding on to assets like rental properties, and so if it's happening either suggests some sort of integration with a property manager or that something has gone wrong.
I have no idea how most shops are profitable when they are paying $3k+ per month, either for a run down shopfront in a non-prime location, or for a 100m2 office.
I’m going to also blame VC money on inflating the price of everything and making it difficult to afford to do profitable tech business at local scale. That’s my theory anyway.
My corner bodega in a non-posh neighborhood in Brooklyn is paying $5550/month rent for a 750 square foot space. That means having to sell approx 45 packs of cigarettes smuggled up from Georgia per day just to pay rent. I don't know how they do it.
46 comments
[ 3.5 ms ] story [ 104 ms ] threadIf the owner leases at a lower rent price, they will essentially get margin called on their other properties. Therefore it actually might make sense to just have the property sit vacant with a (now) ridiculous rental price.
If governments start implementing a vacancy tax that grows as vacancy duration increases, essentially forcing the market to unstick, we'd likely see a rapid implosion of commercial real estate.
Doesn’t sounds like a horrible thing, but perhaps I’m not understanding what the impact would be to us “regular folk” if the commercial real estate bubble popped.
Have a 401K, a 403B, or a Government Pension?
Most marketmakers tend to be Pension and Retirement Funds - they are the only ones with the actual liquidity needed to capitalize on market changes.
I sometimes have to go back and remind myself this is really happening, it's such bullshit.
Property ownership and property "development" has been, and is, propped up at every level, because the people making policy are, or know, the people owning property.
unfortunately cre incentives beung what they are, that will never happen
The current dynamic is how economies seize up.
---
Hate to be that guy, but WSJ is blocking Firefox on my end for unknown reasons, whereas with a base install of Chrome it loads fine after a "human verification" process. The only way I can view this with Firefox is through an archive link. Hope it helps others. Not sure if this is something new since I rarely browse WSJ.
Change your DNS to something else that isn't using CloudFlare and this won't happen. Cloudflare isn't compatible with configurations used by archive.is . You can search "cloudflare DNS hackernews" with your favorite engine to find extensive and comprehensive details about what's happening and why.
Take control of your DNS - using your ISP's default never benefits you, and almost certainly benefits them, and almost certainly at the expense of your time, effort, and comfort. Find a DNS setup that you like that isn't using cloudflare, doesn't censor you, doesn't funnel you into walled gardens or censorship bubbles or otherwise try to position itself as a gatekeeper between you and the internet.
Good luck!
> Cloudflare isn't compatible with configurations used by archive.is
archive.is blocks cloudflare for non-technical reasons. The “configurations” mentioned is to block cloudflare.
This also impacts private relay users, annoyingly.
archive.is wants full EDNS information so they can do a proper IP-based location lookup and serve users from a local data center for speed or whatever reasons
CloudFlare does not want to expose this information for privacy reasons.
It really depends on your viewpoints on which is more important to you. But I do think calling the archive.is position to be non-technical is hard to support
The message I get from WSJ is the following. Note: the following does NOT happen when browsing with Chrome.
I am used to these kind of sites calling me a robot, so I guess the third point is true to some extent :)P.S. I had to change the Accept-Language headers in Firefox to get this message in English. Otherwise I get machine-translated gibberish, which is ironic considering the page is accusing me of being a machine.
I've seen Firefox-only blocking at WSJ before. Today, when I visit their front page with Firefox, I see the same message you get.
But when I load the OP's article I see a white screen with the following page code behind it (ublock disabled).
The reason is supposedly jurisdiction arbitrage: https://news.ycombinator.com/item?id=36971650
No, it's not (necessarily). The archive.is recaptcha loop happens to me too, but only on with Firefox, not Chrome. My DNS does not use CloudFlare.
When prices plateau they'd much rather "spend" the loss in upgrades than in dropping the price.
I was recently trying to get a straight answer on whether the rentals were intended to be long-term income-producing (for the condo association, the builder, or some other party), to only be a holding pattern until more units sell (to pick up some money and/or to make the unsold units look more scarce, then maybe breaking the lease at their convenience), to demonstrate high rent potential to investor buyers of units, or something else.
* Dump the apartments on the market at a price where they will sell (which for a large property developer in a city will depress prices and is poisoning the well for their next project)
* Leave the properties vacant for years
For example: Will the renter get kicked out in 12 months, or the lease broken abruptly with a sale clause in 7 months, because the intention was holding pattern? Will the renter be able to live there 5 years, with reasonable rent increases at each lease renewal, because the goal is to be income-generating property with a stable tenant, to keep condo association fees low? Or some other intention, and how it affects the renter?
My guess is they won't break the lease early, but will not renew / jack up the price once the building has filled up.
https://www.theguardian.com/business/2017/may/03/buy-a-home-...
I have no idea how most shops are profitable when they are paying $3k+ per month, either for a run down shopfront in a non-prime location, or for a 100m2 office.
I’m going to also blame VC money on inflating the price of everything and making it difficult to afford to do profitable tech business at local scale. That’s my theory anyway.
I think you answered it
> That means having to sell approx 45 packs of cigarettes smuggled up from Georgia per day
Either way, thanks for an actual LOL.
In Austin, I'm starting to see things like "2 months free". They'll do ANYTHING to avoid actually--you know--lowering the damn rent.