Anonymous
09/05/2023 09:44
Subject: Doom loop in cities - Commercial real estate
I guess those families living off commercial property rents will have to sell and then innovate.
Anonymous
09/05/2023 00:08
Subject: Doom loop in cities - Commercial real estate
Anonymous wrote:DC needs to focus these conversions on areas that are next to other residential apartment and condo buildings. West End, NoMa, and Dupont Circle are possibilities.
They already are redeveloping midtown, which is close to the areas you mentioned.
Anonymous
09/01/2023 07:48
Subject: Doom loop in cities - Commercial real estate
Anonymous wrote:Anonymous wrote:Anonymous wrote:I’d also be curious about how industrial space in NYC transitioned to residential. I think that’s a way forward for DC commercial property. Become housing and hoteling. Or if retrofitting is too burdensome tear down and start fresh— look at the Navy Yard and the Wharf developments.
How much demand is there for downtown condos? There is a housing shortage, but is there really a condo shortage, or at least enough of one to justify a large amount of new construction?
They need to start doing 3-4br condos for families. Most of the new inventory in these buildings you refer to are 1 and 2br units.
Why condos, and not rentals? And, reasonably-priced multi-bedroom units could serve well for young single professionals as roommates which is something already happening around DC.
Anonymous
08/31/2023 23:57
Subject: Doom loop in cities - Commercial real estate
Anonymous wrote:Anonymous wrote:Anonymous wrote:I’d also be curious about how industrial space in NYC transitioned to residential. I think that’s a way forward for DC commercial property. Become housing and hoteling. Or if retrofitting is too burdensome tear down and start fresh— look at the Navy Yard and the Wharf developments.
How much demand is there for downtown condos? There is a housing shortage, but is there really a condo shortage, or at least enough of one to justify a large amount of new construction?
They need to start doing 3-4br condos for families. Most of the new inventory in these buildings you refer to are 1 and 2br units.
I agree. Too many of the condos are too small for families.
Anonymous
08/31/2023 23:55
Subject: Doom loop in cities - Commercial real estate
DC needs to focus these conversions on areas that are next to other residential apartment and condo buildings. West End, NoMa, and Dupont Circle are possibilities.
Anonymous
08/31/2023 21:32
Subject: Doom loop in cities - Commercial real estate
Anonymous wrote:People need to understand that most of these 1960s, 70s and 80s era commercial office buildings are not easily converted to residential. It isn't like taking an old industrial warehouse and creating cool lofts---these are spaces with 8 foot ceilings, which no one wants anymore in residential buildings (or even in new office, for that matter). Many of the office buildings that age were constructed with post-tension concrete slabs where it is difficult and expensive to install the necessary plumbing stacks for kitchens and bathrooms because the cabling running through the concrete has to be navigated around lest you cut it and compromise the integrity of the slab. The column structure was designed for office use; when you reconfigure the buildings you wind up with long, dark, narrow units.
Sure, there ARE buildings where this can be done---corner properties where there is more light, e.g. And there are a few conversion projects (around L and M in the 1400 and 1500 blocks) going on, so we will soon see if there is a market for it. But---because of the physical constraints I just described coupled with the valuation/lender/owner conundrums described by a PP above---this is not some quick solution to the empty office buildings.
This is true, but it's also the case that there really hasn't been strong demand for these buildings in some time. DC's office vacancy rates were approaching 20% even before the pandemic; the types of firms that are willing to pay downtown DC rents are willing to pay extra for Class A office space. Ultimately, it's just a matter of time before many older buildings get either torn down or have very intensive overhauls.
Anonymous
08/31/2023 18:13
Subject: Doom loop in cities - Commercial real estate
Anonymous wrote:People are returning to the office. World Bank back 4 days/week, IMF won’t be far behind, Us gov agencies gradually increasing time in office.
Secondly, even if people don’t need an office, they need to work somewhere. And they want to live in a vibrant city with walkability, access to restaurants etc. So there is huge demand for suitable housing and opportunities for office to apartment/condo conversions. The key question is if DC is willing to address crime-without safety and quality of life, people won’t choose to live here.
I'm hopeful this is the case, both that DC is an outlier in that it's a hub of employment for which the Federal government is mandating return to work, which spurs growth, but also that the city itself decides to stop just allowing crime to happen. It does that with progressive criminal justice policies.
Anonymous
08/31/2023 14:42
Subject: Doom loop in cities - Commercial real estate
People need to understand that most of these 1960s, 70s and 80s era commercial office buildings are not easily converted to residential. It isn't like taking an old industrial warehouse and creating cool lofts---these are spaces with 8 foot ceilings, which no one wants anymore in residential buildings (or even in new office, for that matter). Many of the office buildings that age were constructed with post-tension concrete slabs where it is difficult and expensive to install the necessary plumbing stacks for kitchens and bathrooms because the cabling running through the concrete has to be navigated around lest you cut it and compromise the integrity of the slab. The column structure was designed for office use; when you reconfigure the buildings you wind up with long, dark, narrow units.
Sure, there ARE buildings where this can be done---corner properties where there is more light, e.g. And there are a few conversion projects (around L and M in the 1400 and 1500 blocks) going on, so we will soon see if there is a market for it. But---because of the physical constraints I just described coupled with the valuation/lender/owner conundrums described by a PP above---this is not some quick solution to the empty office buildings.
Sure, there ARE buildings where this can be done---corner properties where there is more light, e.g. And there are a few conversion projects (around L and M in the 1400 and 1500 blocks) going on, so we will soon see if there is a market for it. But---because of the physical constraints I just described coupled with the valuation/lender/owner conundrums described by a PP above---this is not some quick solution to the empty office buildings.
Anonymous
08/31/2023 11:50
Subject: Doom loop in cities - Commercial real estate
People are returning to the office. World Bank back 4 days/week, IMF won’t be far behind, Us gov agencies gradually increasing time in office.
Secondly, even if people don’t need an office, they need to work somewhere. And they want to live in a vibrant city with walkability, access to restaurants etc. So there is huge demand for suitable housing and opportunities for office to apartment/condo conversions. The key question is if DC is willing to address crime-without safety and quality of life, people won’t choose to live here.
Secondly, even if people don’t need an office, they need to work somewhere. And they want to live in a vibrant city with walkability, access to restaurants etc. So there is huge demand for suitable housing and opportunities for office to apartment/condo conversions. The key question is if DC is willing to address crime-without safety and quality of life, people won’t choose to live here.
Anonymous
08/31/2023 11:49
Subject: Doom loop in cities - Commercial real estate
Anonymous wrote:Anonymous wrote:Anonymous wrote:I’d also be curious about how industrial space in NYC transitioned to residential. I think that’s a way forward for DC commercial property. Become housing and hoteling. Or if retrofitting is too burdensome tear down and start fresh— look at the Navy Yard and the Wharf developments.
How much demand is there for downtown condos? There is a housing shortage, but is there really a condo shortage, or at least enough of one to justify a large amount of new construction?
They need to start doing 3-4br condos for families. Most of the new inventory in these buildings you refer to are 1 and 2br units.
bigger condos probably make more sense in neighborhoods already established for families - more building on the Hill, upper NW, etc. Not sure how many families w older kids would stay downtown.
Anonymous
08/31/2023 11:45
Subject: Doom loop in cities - Commercial real estate
Anonymous wrote:Anonymous wrote:I’d also be curious about how industrial space in NYC transitioned to residential. I think that’s a way forward for DC commercial property. Become housing and hoteling. Or if retrofitting is too burdensome tear down and start fresh— look at the Navy Yard and the Wharf developments.
How much demand is there for downtown condos? There is a housing shortage, but is there really a condo shortage, or at least enough of one to justify a large amount of new construction?
They need to start doing 3-4br condos for families. Most of the new inventory in these buildings you refer to are 1 and 2br units.
Anonymous
08/31/2023 09:51
Subject: Doom loop in cities - Commercial real estate
Anonymous wrote:I’d also be curious about how industrial space in NYC transitioned to residential. I think that’s a way forward for DC commercial property. Become housing and hoteling. Or if retrofitting is too burdensome tear down and start fresh— look at the Navy Yard and the Wharf developments.
How much demand is there for downtown condos? There is a housing shortage, but is there really a condo shortage, or at least enough of one to justify a large amount of new construction?
Anonymous
08/31/2023 09:48
Subject: Doom loop in cities - Commercial real estate
Anonymous wrote:I’d also be curious about how industrial space in NYC transitioned to residential. I think that’s a way forward for DC commercial property. Become housing and hoteling. Or if retrofitting is too burdensome tear down and start fresh— look at the Navy Yard and the Wharf developments.
The problem with this approach is:
(1) creditors/banks who are owed the money would need to write off the mortgage and take possession of property - courts are not fast, you'd have properties sitting empty for a few years while things shake out; abd
(2) would re-trigger a massive devaluation of otherwise-performing CRE which would then (i.) force existing CRE borrowers to pony up more capital to their lenders (because LTV ratios would increase with a devaluation) and (ii) create a large property tax shortfall for the city government due to lower valuations
The best thing to do right now is for the city to create incentives for conversion of existing properties to residential/mixed use by easily changing zoning codes, construction codes, eliminating permitting red tape, provide some tax variances/relief for a fixed period of time, etc. Maybe even think about a temporary reduction/elimination of corporate tax rate.
Anonymous
08/30/2023 23:21
Subject: Doom loop in cities - Commercial real estate
I’d also be curious about how industrial space in NYC transitioned to residential. I think that’s a way forward for DC commercial property. Become housing and hoteling. Or if retrofitting is too burdensome tear down and start fresh— look at the Navy Yard and the Wharf developments.
Anonymous
08/28/2023 19:32
Subject: Doom loop in cities - Commercial real estate
It seems the key to understanding how this affects DC is to know:
- percentage of revenue coming into city from commercial real estate and commuters using metro, buying lunches/coffees, etc
- how DC uses any covid relief and when that dries up
- where DC raises revenue for policing and schools among other services (would these be cut?)
- health of commercial real estate landlords in the city and when leases in the city expire, like is there a wave of them expiring soon?
What other factors are important? How might this affect DC? Article below
https://www.washingtonpost.com/business/2023/08/28/commercial-real-estate-economy-urban-doom-loop/
- percentage of revenue coming into city from commercial real estate and commuters using metro, buying lunches/coffees, etc
- how DC uses any covid relief and when that dries up
- where DC raises revenue for policing and schools among other services (would these be cut?)
- health of commercial real estate landlords in the city and when leases in the city expire, like is there a wave of them expiring soon?
What other factors are important? How might this affect DC? Article below
https://www.washingtonpost.com/business/2023/08/28/commercial-real-estate-economy-urban-doom-loop/