The Nation's Financial Condition

[Farfromgeneva]

Charles Schwab Plans To Cut Staff, Reduce Real Estate Footprint In Latest Cost-Cutting Push

https://www.bisnow.com/national/news/of ... int-120348

Very serious issue with office real estate. Not worried so much for financial services nor Schwab in particular.

But big, big problem for office real estate, especially in over built regions, but throughout the country.

Huge vacancy rates persist post Covid, especially in urban cores....and that has all sorts of negative ripple effects. Falling rental rates are understated as leases for subtenancies are significantly less than master. So, when leases turnover, tenants are taking the opportunity to downsize and then paying much lower rates per foot as well.

I think that this is going to be a persistent issue as white collar work expectations continue to change and companies look for ways to rightsize in-office and be more productive with their resources overall. Technology has had, and will continue to have, a big impact on number and necessary location of workers. And we're going to see this continue as various forms of AI make a good worker far more productive, accomplishing 1.5X, 2X, 10X what they could have done before...there will be competition based on these dynamics...

Want to see where things are truly out of whack disastrously? China. Largest real estate company (one of largest in world) went bankrupt. 2nd largest close to doing so as well...

Every CFO or CEO Ive talked to thinks remote work is wildly unproductive. They do occasionally check internal messaging networks for green lights and get pissed every time they see 80% off. (Kind of like Bloomberg dot colors). Most would prefer hybrid at most 2 days offsite in a week.

That being said (webinar by Trepp next week on office): https://www.trepp.com/market-pulse-webi ... e=hs_email

A report on office from end of July

https://www.trepp.com/access-trepp-offi ... 6f0c4fcec0

[Farfromgeneva]

Charles Schwab Plans To Cut Staff, Reduce Real Estate Footprint In Latest Cost-Cutting Push

https://www.bisnow.com/national/news/of ... int-120348

Very serious issue with office real estate. Not worried so much for financial services nor Schwab in particular.

But big, big problem for office real estate, especially in over built regions, but throughout the country.

Huge vacancy rates persist post Covid, especially in urban cores....and that has all sorts of negative ripple effects. Falling rental rates are understated as leases for subtenancies are significantly less than master. So, when leases turnover, tenants are taking the opportunity to downsize and then paying much lower rates per foot as well.

I think that this is going to be a persistent issue as white collar work expectations continue to change and companies look for ways to rightsize in-office and be more productive with their resources overall. Technology has had, and will continue to have, a big impact on number and necessary location of workers. And we're going to see this continue as various forms of AI make a good worker far more productive, accomplishing 1.5X, 2X, 10X what they could have done before...there will be competition based on these dynamics...

Want to see where things are truly out of whack disastrously? China. Largest real estate company (one of largest in world) went bankrupt. 2nd largest close to doing so as well...

CRE is problematic beyond office (retail/malls in particular, multifamily has issues especially sunbelt B-/C properties. Industrial has strong demand but a ton of new supply coming online to absorb. Ironically though the WSJ continues to focus on office

https://www.wsj.com/lifestyle/careers/t ... 76?mod=mhp

[MDlaxfan76]

Charles Schwab Plans To Cut Staff, Reduce Real Estate Footprint In Latest Cost-Cutting Push

https://www.bisnow.com/national/news/of ... int-120348

Very serious issue with office real estate. Not worried so much for financial services nor Schwab in particular.

But big, big problem for office real estate, especially in over built regions, but throughout the country.

Huge vacancy rates persist post Covid, especially in urban cores....and that has all sorts of negative ripple effects. Falling rental rates are understated as leases for subtenancies are significantly less than master. So, when leases turnover, tenants are taking the opportunity to downsize and then paying much lower rates per foot as well.

I think that this is going to be a persistent issue as white collar work expectations continue to change and companies look for ways to rightsize in-office and be more productive with their resources overall. Technology has had, and will continue to have, a big impact on number and necessary location of workers. And we're going to see this continue as various forms of AI make a good worker far more productive, accomplishing 1.5X, 2X, 10X what they could have done before...there will be competition based on these dynamics...

Want to see where things are truly out of whack disastrously? China. Largest real estate company (one of largest in world) went bankrupt. 2nd largest close to doing so as well...

Every CFO or CEO Ive talked to thinks remote work is wildly unproductive. They do occasionally check internal messaging networks for green lights and get ticked every time they see 80% off. (Kind of like Bloomberg dot colors). Most would prefer hybrid at most 2 days offsite in a week.

That being said (webinar by Trepp next week on office): https://www.trepp.com/market-pulse-webi ... e=hs_email

A report on office from end of July

https://www.trepp.com/access-trepp-offi ... 6f0c4fcec0

yes, hybrid is preferred but that's a 20-40% reduction of on-site workforce.

[Farfromgeneva]

Charles Schwab Plans To Cut Staff, Reduce Real Estate Footprint In Latest Cost-Cutting Push

https://www.bisnow.com/national/news/of ... int-120348

Very serious issue with office real estate. Not worried so much for financial services nor Schwab in particular.

But big, big problem for office real estate, especially in over built regions, but throughout the country.

Huge vacancy rates persist post Covid, especially in urban cores....and that has all sorts of negative ripple effects. Falling rental rates are understated as leases for subtenancies are significantly less than master. So, when leases turnover, tenants are taking the opportunity to downsize and then paying much lower rates per foot as well.

I think that this is going to be a persistent issue as white collar work expectations continue to change and companies look for ways to rightsize in-office and be more productive with their resources overall. Technology has had, and will continue to have, a big impact on number and necessary location of workers. And we're going to see this continue as various forms of AI make a good worker far more productive, accomplishing 1.5X, 2X, 10X what they could have done before...there will be competition based on these dynamics...

Want to see where things are truly out of whack disastrously? China. Largest real estate company (one of largest in world) went bankrupt. 2nd largest close to doing so as well...

Every CFO or CEO Ive talked to thinks remote work is wildly unproductive. They do occasionally check internal messaging networks for green lights and get ticked every time they see 80% off. (Kind of like Bloomberg dot colors). Most would prefer hybrid at most 2 days offsite in a week.

That being said (webinar by Trepp next week on office): https://www.trepp.com/market-pulse-webi ... e=hs_email

A report on office from end of July

https://www.trepp.com/access-trepp-offi ... 6f0c4fcec0

yes, hybrid is preferred but that's a 20-40% reduction of on-site workforce.

I was mostly speaking to necessary location of workers. You’ll find most execs still want a concentration for the benefits that provides. The idea folks can relocate to Boise or wherever and that’s the new normal I don’t expect for the vast majority.

Yes I expect a 40% reduction in footprint of legacy businesses then maybe new enterprises soaks up 5-10% of supply but if a typical office market was 80-85% occupancy (lenders underwrite 90-95% too easily for any market incl Manhattan) that implies future occupancies on ACC will be more like a 1/3 down from there to 55-65%. But what’ll really happen is some will barbell as functionally obsolete and need to be demolished (converting to residential is a disaster because of windows, mechanical and ceiling heights plus typical interior corridor elevators) and the surviving ones will get back to 80%. Markets of CRE won’t survive at 60% occupancy for too long.

In Manhattan I think this will happen faster with ground lease bifurcated from the vertical improvement (leased fee vs fee simple interest) often as well as the new emissions laws kicking in there that are going to crush old office bldgs.

Local Law 97 in NYC

https://www.nyc.gov/site/sustainablebui ... aw-97.page

[Farfromgeneva]

P&C industry analysis from McKinsey

https://www.mckinsey.com/industries/fin ... ba2b922599

[youthathletics]

Charles Schwab Plans To Cut Staff, Reduce Real Estate Footprint In Latest Cost-Cutting Push

https://www.bisnow.com/national/news/of ... int-120348

Very serious issue with office real estate. Not worried so much for financial services nor Schwab in particular.

But big, big problem for office real estate, especially in over built regions, but throughout the country.

Huge vacancy rates persist post Covid, especially in urban cores....and that has all sorts of negative ripple effects. Falling rental rates are understated as leases for subtenancies are significantly less than master. So, when leases turnover, tenants are taking the opportunity to downsize and then paying much lower rates per foot as well.

I think that this is going to be a persistent issue as white collar work expectations continue to change and companies look for ways to rightsize in-office and be more productive with their resources overall. Technology has had, and will continue to have, a big impact on number and necessary location of workers. And we're going to see this continue as various forms of AI make a good worker far more productive, accomplishing 1.5X, 2X, 10X what they could have done before...there will be competition based on these dynamics...

Want to see where things are truly out of whack disastrously? China. Largest real estate company (one of largest in world) went bankrupt. 2nd largest close to doing so as well...

Every CFO or CEO Ive talked to thinks remote work is wildly unproductive. They do occasionally check internal messaging networks for green lights and get ticked every time they see 80% off. (Kind of like Bloomberg dot colors). Most would prefer hybrid at most 2 days offsite in a week.

That being said (webinar by Trepp next week on office): https://www.trepp.com/market-pulse-webi ... e=hs_email

A report on office from end of July

https://www.trepp.com/access-trepp-offi ... 6f0c4fcec0

yes, hybrid is preferred but that's a 20-40% reduction of on-site workforce.

I was mostly speaking to necessary location of workers. You’ll find most execs still want a concentration for the benefits that provides. The idea folks can relocate to Boise or wherever and that’s the new normal I don’t expect for the vast majority.

Yes I expect a 40% reduction in footprint of legacy businesses then maybe new enterprises soaks up 5-10% of supply but if a typical office market was 80-85% occupancy (lenders underwrite 90-95% too easily for any market incl Manhattan) that implies future occupancies on ACC will be more like a 1/3 down from there to 55-65%. But what’ll really happen is some will barbell as functionally obsolete and need to be demolished (converting to residential is a disaster because of windows, mechanical and ceiling heights plus typical interior corridor elevators) and the surviving ones will get back to 80%. Markets of CRE won’t survive at 60% occupancy for too long.

In Manhattan I think this will happen faster with ground lease bifurcated from the vertical improvement (leased fee vs fee simple interest) often as well as the new emissions laws kicking in there that are going to crush old office bldgs.

Local Law 97 in NYC

https://www.nyc.gov/site/sustainablebui ... aw-97.page

Our office just did this. Went from 1 1/2 floors of a 3 story OB, of which we own, consolidated and now under construction to one full floor. Designed much like a home office setting. Gathering room much like a family room extended off a kitchen with sofas and small side meeting settings. Incorporated a training facility which was almost an entire half of a floor, into a smaller section of new design with more A/V Tech engagement. Gathering rooms for quick private meetings, focus rooms with sound proofing. Looks to be great place to come in and see p2p collaboration.

[MDlaxfan76]

Charles Schwab Plans To Cut Staff, Reduce Real Estate Footprint In Latest Cost-Cutting Push

https://www.bisnow.com/national/news/of ... int-120348

Very serious issue with office real estate. Not worried so much for financial services nor Schwab in particular.

But big, big problem for office real estate, especially in over built regions, but throughout the country.

Huge vacancy rates persist post Covid, especially in urban cores....and that has all sorts of negative ripple effects. Falling rental rates are understated as leases for subtenancies are significantly less than master. So, when leases turnover, tenants are taking the opportunity to downsize and then paying much lower rates per foot as well.

I think that this is going to be a persistent issue as white collar work expectations continue to change and companies look for ways to rightsize in-office and be more productive with their resources overall. Technology has had, and will continue to have, a big impact on number and necessary location of workers. And we're going to see this continue as various forms of AI make a good worker far more productive, accomplishing 1.5X, 2X, 10X what they could have done before...there will be competition based on these dynamics...

Want to see where things are truly out of whack disastrously? China. Largest real estate company (one of largest in world) went bankrupt. 2nd largest close to doing so as well...

Every CFO or CEO Ive talked to thinks remote work is wildly unproductive. They do occasionally check internal messaging networks for green lights and get ticked every time they see 80% off. (Kind of like Bloomberg dot colors). Most would prefer hybrid at most 2 days offsite in a week.

That being said (webinar by Trepp next week on office): https://www.trepp.com/market-pulse-webi ... e=hs_email

A report on office from end of July

https://www.trepp.com/access-trepp-offi ... 6f0c4fcec0

yes, hybrid is preferred but that's a 20-40% reduction of on-site workforce.

I was mostly speaking to necessary location of workers. You’ll find most execs still want a concentration for the benefits that provides. The idea folks can relocate to Boise or wherever and that’s the new normal I don’t expect for the vast majority.

Yes I expect a 40% reduction in footprint of legacy businesses then maybe new enterprises soaks up 5-10% of supply but if a typical office market was 80-85% occupancy (lenders underwrite 90-95% too easily for any market incl Manhattan) that implies future occupancies on ACC will be more like a 1/3 down from there to 55-65%. But what’ll really happen is some will barbell as functionally obsolete and need to be demolished (converting to residential is a disaster because of windows, mechanical and ceiling heights plus typical interior corridor elevators) and the surviving ones will get back to 80%. Markets of CRE won’t survive at 60% occupancy for too long.

In Manhattan I think this will happen faster with ground lease bifurcated from the vertical improvement (leased fee vs fee simple interest) often as well as the new emissions laws kicking in there that are going to crush old office bldgs.

Local Law 97 in NYC

https://www.nyc.gov/site/sustainablebui ... aw-97.page

Our office just did this. Went from 1 1/2 floors of a 3 story OB, of which we own, consolidated and now under construction to one full floor. Designed much like a home office setting. Gathering room much like a family room extended off a kitchen with sofas and small side meeting settings. Incorporated a training facility which was almost an entire half of a floor, into a smaller section of new design with more A/V Tech engagement. Gathering rooms for quick private meetings, focus rooms with sound proofing. Looks to be great place to come in and see p2p collaboration.

sounds great!

[PizzaSnake]

Charles Schwab Plans To Cut Staff, Reduce Real Estate Footprint In Latest Cost-Cutting Push

https://www.bisnow.com/national/news/of ... int-120348

Very serious issue with office real estate. Not worried so much for financial services nor Schwab in particular.

But big, big problem for office real estate, especially in over built regions, but throughout the country.

Huge vacancy rates persist post Covid, especially in urban cores....and that has all sorts of negative ripple effects. Falling rental rates are understated as leases for subtenancies are significantly less than master. So, when leases turnover, tenants are taking the opportunity to downsize and then paying much lower rates per foot as well.

I think that this is going to be a persistent issue as white collar work expectations continue to change and companies look for ways to rightsize in-office and be more productive with their resources overall. Technology has had, and will continue to have, a big impact on number and necessary location of workers. And we're going to see this continue as various forms of AI make a good worker far more productive, accomplishing 1.5X, 2X, 10X what they could have done before...there will be competition based on these dynamics...

Want to see where things are truly out of whack disastrously? China. Largest real estate company (one of largest in world) went bankrupt. 2nd largest close to doing so as well...

Every CFO or CEO Ive talked to thinks remote work is wildly unproductive. They do occasionally check internal messaging networks for green lights and get ticked every time they see 80% off. (Kind of like Bloomberg dot colors). Most would prefer hybrid at most 2 days offsite in a week.

That being said (webinar by Trepp next week on office): https://www.trepp.com/market-pulse-webi ... e=hs_email

A report on office from end of July

https://www.trepp.com/access-trepp-offi ... 6f0c4fcec0

yes, hybrid is preferred but that's a 20-40% reduction of on-site workforce.

I was mostly speaking to necessary location of workers. You’ll find most execs still want a concentration for the benefits that provides. The idea folks can relocate to Boise or wherever and that’s the new normal I don’t expect for the vast majority.

Yes I expect a 40% reduction in footprint of legacy businesses then maybe new enterprises soaks up 5-10% of supply but if a typical office market was 80-85% occupancy (lenders underwrite 90-95% too easily for any market incl Manhattan) that implies future occupancies on ACC will be more like a 1/3 down from there to 55-65%. But what’ll really happen is some will barbell as functionally obsolete and need to be demolished (converting to residential is a disaster because of windows, mechanical and ceiling heights plus typical interior corridor elevators) and the surviving ones will get back to 80%. Markets of CRE won’t survive at 60% occupancy for too long.

In Manhattan I think this will happen faster with ground lease bifurcated from the vertical improvement (leased fee vs fee simple interest) often as well as the new emissions laws kicking in there that are going to crush old office bldgs.

Local Law 97 in NYC

https://www.nyc.gov/site/sustainablebui ... aw-97.page

"for the benefits that provides."

Apart from obvious cases where physical presence is the job, i.e. trades, manufacturing, etc., what benefits are those? Any data to back up these squishy metrics of collaboration (still a bad word to me -- don't call me a fcuking collaborator... , synergy, innovation? What a load of soft-science shite!! Why is it everyone loves science but tolerates the BS management speak? Sociology or pop psychology at best! Like the ultimate expression, the Myers-Briggs -- total carp.

I'm not so sure these CEOs know their asz from a hole in the ground.

[a fan]

Charles Schwab Plans To Cut Staff, Reduce Real Estate Footprint In Latest Cost-Cutting Push

https://www.bisnow.com/national/news/of ... int-120348

Very serious issue with office real estate. Not worried so much for financial services nor Schwab in particular.

But big, big problem for office real estate, especially in over built regions, but throughout the country.

Huge vacancy rates persist post Covid, especially in urban cores....and that has all sorts of negative ripple effects. Falling rental rates are understated as leases for subtenancies are significantly less than master. So, when leases turnover, tenants are taking the opportunity to downsize and then paying much lower rates per foot as well.

I think that this is going to be a persistent issue as white collar work expectations continue to change and companies look for ways to rightsize in-office and be more productive with their resources overall. Technology has had, and will continue to have, a big impact on number and necessary location of workers. And we're going to see this continue as various forms of AI make a good worker far more productive, accomplishing 1.5X, 2X, 10X what they could have done before...there will be competition based on these dynamics...

Want to see where things are truly out of whack disastrously? China. Largest real estate company (one of largest in world) went bankrupt. 2nd largest close to doing so as well...

Every CFO or CEO Ive talked to thinks remote work is wildly unproductive. They do occasionally check internal messaging networks for green lights and get ticked every time they see 80% off. (Kind of like Bloomberg dot colors). Most would prefer hybrid at most 2 days offsite in a week.

That being said (webinar by Trepp next week on office): https://www.trepp.com/market-pulse-webi ... e=hs_email

A report on office from end of July

https://www.trepp.com/access-trepp-offi ... 6f0c4fcec0

yes, hybrid is preferred but that's a 20-40% reduction of on-site workforce.

I was mostly speaking to necessary location of workers. You’ll find most execs still want a concentration for the benefits that provides. The idea folks can relocate to Boise or wherever and that’s the new normal I don’t expect for the vast majority.

Yes I expect a 40% reduction in footprint of legacy businesses then maybe new enterprises soaks up 5-10% of supply but if a typical office market was 80-85% occupancy (lenders underwrite 90-95% too easily for any market incl Manhattan) that implies future occupancies on ACC will be more like a 1/3 down from there to 55-65%. But what’ll really happen is some will barbell as functionally obsolete and need to be demolished (converting to residential is a disaster because of windows, mechanical and ceiling heights plus typical interior corridor elevators) and the surviving ones will get back to 80%. Markets of CRE won’t survive at 60% occupancy for too long.

In Manhattan I think this will happen faster with ground lease bifurcated from the vertical improvement (leased fee vs fee simple interest) often as well as the new emissions laws kicking in there that are going to crush old office bldgs.

Local Law 97 in NYC

https://www.nyc.gov/site/sustainablebui ... aw-97.page

"for the benefits that provides."

Apart from obvious cases where physical presence is the job, i.e. trades, manufacturing, etc., what benefits are those? Any data to back up these squishy metrics of collaboration (still a bad word to me -- don't call me a fcuking collaborator... , synergy, innovation? What a load of soft-science shite!! Why is it everyone loves science but tolerates the BS management speak? Sociology or pop psychology at best! Like the ultimate expression, the Myers-Briggs -- total carp.

I'm not so sure these CEOs know their asz from a hole in the ground.

How do you learn to deal with people, or how to manage people.....if you're never in the same room?

[youthathletics]

Charles Schwab Plans To Cut Staff, Reduce Real Estate Footprint In Latest Cost-Cutting Push

https://www.bisnow.com/national/news/of ... int-120348

Very serious issue with office real estate. Not worried so much for financial services nor Schwab in particular.

But big, big problem for office real estate, especially in over built regions, but throughout the country.

Huge vacancy rates persist post Covid, especially in urban cores....and that has all sorts of negative ripple effects. Falling rental rates are understated as leases for subtenancies are significantly less than master. So, when leases turnover, tenants are taking the opportunity to downsize and then paying much lower rates per foot as well.

I think that this is going to be a persistent issue as white collar work expectations continue to change and companies look for ways to rightsize in-office and be more productive with their resources overall. Technology has had, and will continue to have, a big impact on number and necessary location of workers. And we're going to see this continue as various forms of AI make a good worker far more productive, accomplishing 1.5X, 2X, 10X what they could have done before...there will be competition based on these dynamics...

Want to see where things are truly out of whack disastrously? China. Largest real estate company (one of largest in world) went bankrupt. 2nd largest close to doing so as well...

Every CFO or CEO Ive talked to thinks remote work is wildly unproductive. They do occasionally check internal messaging networks for green lights and get ticked every time they see 80% off. (Kind of like Bloomberg dot colors). Most would prefer hybrid at most 2 days offsite in a week.

That being said (webinar by Trepp next week on office): https://www.trepp.com/market-pulse-webi ... e=hs_email

A report on office from end of July

https://www.trepp.com/access-trepp-offi ... 6f0c4fcec0

yes, hybrid is preferred but that's a 20-40% reduction of on-site workforce.

I was mostly speaking to necessary location of workers. You’ll find most execs still want a concentration for the benefits that provides. The idea folks can relocate to Boise or wherever and that’s the new normal I don’t expect for the vast majority.

Yes I expect a 40% reduction in footprint of legacy businesses then maybe new enterprises soaks up 5-10% of supply but if a typical office market was 80-85% occupancy (lenders underwrite 90-95% too easily for any market incl Manhattan) that implies future occupancies on ACC will be more like a 1/3 down from there to 55-65%. But what’ll really happen is some will barbell as functionally obsolete and need to be demolished (converting to residential is a disaster because of windows, mechanical and ceiling heights plus typical interior corridor elevators) and the surviving ones will get back to 80%. Markets of CRE won’t survive at 60% occupancy for too long.

In Manhattan I think this will happen faster with ground lease bifurcated from the vertical improvement (leased fee vs fee simple interest) often as well as the new emissions laws kicking in there that are going to crush old office bldgs.

Local Law 97 in NYC

https://www.nyc.gov/site/sustainablebui ... aw-97.page

"for the benefits that provides."

Apart from obvious cases where physical presence is the job, i.e. trades, manufacturing, etc., what benefits are those? Any data to back up these squishy metrics of collaboration (still a bad word to me -- don't call me a fcuking collaborator... , synergy, innovation? What a load of soft-science shite!! Why is it everyone loves science but tolerates the BS management speak? Sociology or pop psychology at best! Like the ultimate expression, the Myers-Briggs -- total carp.

I'm not so sure these CEOs know their asz from a hole in the ground.

How do you learn to deal with people, or how to manage people.....if you're never in the same room?

Agreed, afan. Not to mention, look no further than what just happened with our school aged kids that had to learn 'remotely'. Furthermore, how some students excelled in a class setting and fell off the map while stuck at home; some adults are no different.

[Typical Lax Dad]

Charles Schwab Plans To Cut Staff, Reduce Real Estate Footprint In Latest Cost-Cutting Push

https://www.bisnow.com/national/news/of ... int-120348

Very serious issue with office real estate. Not worried so much for financial services nor Schwab in particular.

But big, big problem for office real estate, especially in over built regions, but throughout the country.

Huge vacancy rates persist post Covid, especially in urban cores....and that has all sorts of negative ripple effects. Falling rental rates are understated as leases for subtenancies are significantly less than master. So, when leases turnover, tenants are taking the opportunity to downsize and then paying much lower rates per foot as well.

I think that this is going to be a persistent issue as white collar work expectations continue to change and companies look for ways to rightsize in-office and be more productive with their resources overall. Technology has had, and will continue to have, a big impact on number and necessary location of workers. And we're going to see this continue as various forms of AI make a good worker far more productive, accomplishing 1.5X, 2X, 10X what they could have done before...there will be competition based on these dynamics...

Want to see where things are truly out of whack disastrously? China. Largest real estate company (one of largest in world) went bankrupt. 2nd largest close to doing so as well...

Every CFO or CEO Ive talked to thinks remote work is wildly unproductive. They do occasionally check internal messaging networks for green lights and get ticked every time they see 80% off. (Kind of like Bloomberg dot colors). Most would prefer hybrid at most 2 days offsite in a week.

That being said (webinar by Trepp next week on office): https://www.trepp.com/market-pulse-webi ... e=hs_email

A report on office from end of July

https://www.trepp.com/access-trepp-offi ... 6f0c4fcec0

yes, hybrid is preferred but that's a 20-40% reduction of on-site workforce.

I was mostly speaking to necessary location of workers. You’ll find most execs still want a concentration for the benefits that provides. The idea folks can relocate to Boise or wherever and that’s the new normal I don’t expect for the vast majority.

Yes I expect a 40% reduction in footprint of legacy businesses then maybe new enterprises soaks up 5-10% of supply but if a typical office market was 80-85% occupancy (lenders underwrite 90-95% too easily for any market incl Manhattan) that implies future occupancies on ACC will be more like a 1/3 down from there to 55-65%. But what’ll really happen is some will barbell as functionally obsolete and need to be demolished (converting to residential is a disaster because of windows, mechanical and ceiling heights plus typical interior corridor elevators) and the surviving ones will get back to 80%. Markets of CRE won’t survive at 60% occupancy for too long.

In Manhattan I think this will happen faster with ground lease bifurcated from the vertical improvement (leased fee vs fee simple interest) often as well as the new emissions laws kicking in there that are going to crush old office bldgs.

Local Law 97 in NYC

https://www.nyc.gov/site/sustainablebui ... aw-97.page

"for the benefits that provides."

Apart from obvious cases where physical presence is the job, i.e. trades, manufacturing, etc., what benefits are those? Any data to back up these squishy metrics of collaboration (still a bad word to me -- don't call me a fcuking collaborator... , synergy, innovation? What a load of soft-science shite!! Why is it everyone loves science but tolerates the BS management speak? Sociology or pop psychology at best! Like the ultimate expression, the Myers-Briggs -- total carp.

I'm not so sure these CEOs know their asz from a hole in the ground.

How do you learn to deal with people, or how to manage people.....if you're never in the same room?

Agreed, afan. Not to mention, look no further than what just happened with our school aged kids that had to learn 'remotely'. Furthermore, how some students excelled in a class setting and fell off the map while stuck at home; some adults are no different.

Mr. Homeschooling.

[PizzaSnake]

Charles Schwab Plans To Cut Staff, Reduce Real Estate Footprint In Latest Cost-Cutting Push

https://www.bisnow.com/national/news/of ... int-120348

Very serious issue with office real estate. Not worried so much for financial services nor Schwab in particular.

But big, big problem for office real estate, especially in over built regions, but throughout the country.

Huge vacancy rates persist post Covid, especially in urban cores....and that has all sorts of negative ripple effects. Falling rental rates are understated as leases for subtenancies are significantly less than master. So, when leases turnover, tenants are taking the opportunity to downsize and then paying much lower rates per foot as well.

I think that this is going to be a persistent issue as white collar work expectations continue to change and companies look for ways to rightsize in-office and be more productive with their resources overall. Technology has had, and will continue to have, a big impact on number and necessary location of workers. And we're going to see this continue as various forms of AI make a good worker far more productive, accomplishing 1.5X, 2X, 10X what they could have done before...there will be competition based on these dynamics...

Want to see where things are truly out of whack disastrously? China. Largest real estate company (one of largest in world) went bankrupt. 2nd largest close to doing so as well...

Every CFO or CEO Ive talked to thinks remote work is wildly unproductive. They do occasionally check internal messaging networks for green lights and get ticked every time they see 80% off. (Kind of like Bloomberg dot colors). Most would prefer hybrid at most 2 days offsite in a week.

That being said (webinar by Trepp next week on office): https://www.trepp.com/market-pulse-webi ... e=hs_email

A report on office from end of July

https://www.trepp.com/access-trepp-offi ... 6f0c4fcec0

yes, hybrid is preferred but that's a 20-40% reduction of on-site workforce.

I was mostly speaking to necessary location of workers. You’ll find most execs still want a concentration for the benefits that provides. The idea folks can relocate to Boise or wherever and that’s the new normal I don’t expect for the vast majority.

Yes I expect a 40% reduction in footprint of legacy businesses then maybe new enterprises soaks up 5-10% of supply but if a typical office market was 80-85% occupancy (lenders underwrite 90-95% too easily for any market incl Manhattan) that implies future occupancies on ACC will be more like a 1/3 down from there to 55-65%. But what’ll really happen is some will barbell as functionally obsolete and need to be demolished (converting to residential is a disaster because of windows, mechanical and ceiling heights plus typical interior corridor elevators) and the surviving ones will get back to 80%. Markets of CRE won’t survive at 60% occupancy for too long.

In Manhattan I think this will happen faster with ground lease bifurcated from the vertical improvement (leased fee vs fee simple interest) often as well as the new emissions laws kicking in there that are going to crush old office bldgs.

Local Law 97 in NYC

https://www.nyc.gov/site/sustainablebui ... aw-97.page

"for the benefits that provides."

Apart from obvious cases where physical presence is the job, i.e. trades, manufacturing, etc., what benefits are those? Any data to back up these squishy metrics of collaboration (still a bad word to me -- don't call me a fcuking collaborator... , synergy, innovation? What a load of soft-science shite!! Why is it everyone loves science but tolerates the BS management speak? Sociology or pop psychology at best! Like the ultimate expression, the Myers-Briggs -- total carp.
E
I'm not so sure these CEOs know their asz from a hole in the ground.

How do you learn to deal with people, or how to manage people.....if you're never in the same room?

Sounds like excuses for insufficiency. You play the hand you’re dealt or you go out of business.

Given the failure of the social contract over the past 40 odd years, culminating in the triple threat of unattainable housing, crushing debt burdens, and increasingly obvious environmental degradation, why would young and mid-career workers bend to the yoke and indulge these largely white, male sociopaths? “Live life as if today is your last,” appears to be the trending ethos. Don’t like it? Tough shite.

Hint:this isn’t American exceptionalism, boys and girls. Chinese youth and the lying down cultural reaction to the 996 plan is telling.

[NattyBohChamps04]

Every CFO or CEO Ive talked to thinks remote work is wildly unproductive. They do occasionally check internal messaging networks for green lights and get ticked every time they see 80% off. (Kind of like Bloomberg dot colors). Most would prefer hybrid at most 2 days offsite in a week.

Unlocking The Remote Work Productivity Advantage

A study conducted by Stanford University in the summer of 2020 discovered that remote workers were 5% more productive than those working in a physical office. By the spring of 2022, remote worker productivity had risen to 9% as businesses became more familiar with remote work practices and invested in technology to support it.

I don't doubt every CFO/CEO you've talked to thinks it's wildly unproductive for a number of reasons.

It's shining a small light on the unspoken truth we all know. That a lot of time spent at the physical office is already unproductive. Pushing for too much in-office work is gonna lead to losing good employees. Cutting off their nose to spite their face.

Having people in the office when it's not necessary is just a security blanket for insecure managers. If I wasn't manufacturing stuff and needed my employees on-site, I'd have a 1-3 day in office work week depending on employee preference.

The irony of course is so much work done across America (and the globe) is already nearly 100% remote - all the stuff we contract out. My lawyers are remote, my accountants are remote. Factories in China, Vietnam, Utah, etc manufacturing components for us to use? We work remotely with them. I may see them in person once or twice per year.

[a fan]

Sounds like excuses for insufficiency. You play the hand you’re dealt or you go out of business.

I was just asking a question. And you didn't answer it: how do you get a culture, let alone a managerial culture, if no one is ever in the same room together?

Given the failure of the social contract over the past 40 odd years, culminating in the triple threat of unattainable housing, crushing debt burdens, and increasingly obvious environmental degradation, why would young and mid-career workers bend to the yoke and indulge these largely white, male sociopaths?

To be a part of something larger than yourself, and to give your life purpose. Meet lifelong friends and peers....people who can help your career along, and even get you new jobs. I could list the bennies of in place work all day long.

The SBA is BEGGING to give Americans money to start their own business. BEGGING. Workers can stop telling other businesses how they are "doing it wrong", and band together and start their own businesses.

[a fan]

Every CFO or CEO Ive talked to thinks remote work is wildly unproductive. They do occasionally check internal messaging networks for green lights and get ticked every time they see 80% off. (Kind of like Bloomberg dot colors). Most would prefer hybrid at most 2 days offsite in a week.

Unlocking The Remote Work Productivity Advantage

A study conducted by Stanford University in the summer of 2020 discovered that remote workers were 5% more productive than those working in a physical office. By the spring of 2022, remote worker productivity had risen to 9% as businesses became more familiar with remote work practices and invested in technology to support it.

I don't doubt every CFO/CEO you've talked to thinks it's wildly unproductive for a number of reasons.

It's shining a small light on the unspoken truth we all know. That a lot of time spent at the physical office is already unproductive. Pushing for too much in-office work is gonna lead to losing good employees. Cutting off their nose to spite their face.

Yes, folks are forgetting something: almost every manager working in the world today has been working in-person for decades.

Folks are ASSUMING the people skills and management skills just fell from the sky.

What's the plan for 20-somethings to learn how to deal with people and systems if they have never set foot in an office with other people. Never seen how a good manager operates OUTSIDE of the rote "we need to execute x, y, and z" on a Zoom call?

How do you mentor over these non-stop zoom calls?

I'm 100% for giving power to the people. I'm simply pointing out, I can't see how you train new American leaders without human interaction.

This all sounds inhuman and cold to me.

[a fan]

Agreed, afan. Not to mention, look no further than what just happened with our school aged kids that had to learn 'remotely'. Furthermore, how some students excelled in a class setting and fell off the map while stuck at home; some adults are no different.

The one thing I wish that I was told, or learned on my own at some point.......I'm a technician. A highly trained maltster and distiller. No one in college or HS, or my trade schools told me the truth about the world: 90% of work is about dealing with other people.

I think our entire educational system when I was growing up misses teaching us that lesson.

The exceptions, and why we are on this site? Sports, and other activities like band or choir where you have to learn to work together as a team.

Our production manager? He's a gift from above. One reason? He previously worked as the athletic trainer for the Denver Mammoth (indoor lacrosse), and played two sports in HS. He's seen how important locker room culture is when it comes to winning and working together.

Maybe that's the answer? Work remotely, but have mandatory sports teams.....or even just things like quilting clubs. Something where your coworkers are together, socializing, and working on a common goal.

It might sound stupid, but I'd bet it would help.

Our shop, obviously, is nearly 100% on site for work.

[Typical Lax Dad]

Every CFO or CEO Ive talked to thinks remote work is wildly unproductive. They do occasionally check internal messaging networks for green lights and get ticked every time they see 80% off. (Kind of like Bloomberg dot colors). Most would prefer hybrid at most 2 days offsite in a week.

Unlocking The Remote Work Productivity Advantage

A study conducted by Stanford University in the summer of 2020 discovered that remote workers were 5% more productive than those working in a physical office. By the spring of 2022, remote worker productivity had risen to 9% as businesses became more familiar with remote work practices and invested in technology to support it.

I don't doubt every CFO/CEO you've talked to thinks it's wildly unproductive for a number of reasons.

It's shining a small light on the unspoken truth we all know. That a lot of time spent at the physical office is already unproductive. Pushing for too much in-office work is gonna lead to losing good employees. Cutting off their nose to spite their face.

Yes, folks are forgetting something: almost every manager working in the world today has been working in-person for decades.

Folks are ASSUMING the people skills and management skills just fell from the sky.

What's the plan for 20-somethings to learn how to deal with people and systems if they have never set foot in an office with other people. Never seen how a good manager operates OUTSIDE of the rote "we need to execute x, y, and z" on a Zoom call?

How do you mentor over these non-stop zoom calls?

I'm 100% for giving power to the people. I'm simply pointing out, I can't see how you train new American leaders without human interaction.

This all sounds inhuman and cold to me.

Mentoring young people is important. I have 4 in my office. I plan on being in more this fall to help them with development. We have done very well in a remote environment but we are aware of the importance of mentoring and personal development for our young people. We are not going back to 100% in person. We have taken less square footage and so long as we deliver results, we will maintain status quo.

[Typical Lax Dad]

Agreed, afan. Not to mention, look no further than what just happened with our school aged kids that had to learn 'remotely'. Furthermore, how some students excelled in a class setting and fell off the map while stuck at home; some adults are no different.

The one thing I wish that I was told, or learned on my own at some point.......I'm a technician. A highly trained maltster and distiller. No one in college or HS, or my trade schools told me the truth about the world: 90% of work is about dealing with other people.

I think our entire educational system when I was growing up misses teaching us that lesson.

The exceptions, and why we are on this site? Sports, and other activities like band or choir where you have to learn to work together as a team.

Our production manager? He's a gift from above. One reason? He previously worked as the athletic trainer for the Denver Mammoth (indoor lacrosse), and played two sports in HS. He's seen how important locker room culture is when it comes to winning and working together.

Maybe that's the answer? Work remotely, but have mandatory sports teams.....or even just things like quilting clubs. Something where your coworkers are together, socializing, and working on a common goal.

It might sound stupid, but I'd bet it would help.

Our shop, obviously, is nearly 100% on site for work.

The Mammoth!! My best friend from college was GM at one time!

[a fan]

Every CFO or CEO Ive talked to thinks remote work is wildly unproductive. They do occasionally check internal messaging networks for green lights and get ticked every time they see 80% off. (Kind of like Bloomberg dot colors). Most would prefer hybrid at most 2 days offsite in a week.

Unlocking The Remote Work Productivity Advantage

A study conducted by Stanford University in the summer of 2020 discovered that remote workers were 5% more productive than those working in a physical office. By the spring of 2022, remote worker productivity had risen to 9% as businesses became more familiar with remote work practices and invested in technology to support it.

I don't doubt every CFO/CEO you've talked to thinks it's wildly unproductive for a number of reasons.

It's shining a small light on the unspoken truth we all know. That a lot of time spent at the physical office is already unproductive. Pushing for too much in-office work is gonna lead to losing good employees. Cutting off their nose to spite their face.

Yes, folks are forgetting something: almost every manager working in the world today has been working in-person for decades.

Folks are ASSUMING the people skills and management skills just fell from the sky.

What's the plan for 20-somethings to learn how to deal with people and systems if they have never set foot in an office with other people. Never seen how a good manager operates OUTSIDE of the rote "we need to execute x, y, and z" on a Zoom call?

How do you mentor over these non-stop zoom calls?

I'm 100% for giving power to the people. I'm simply pointing out, I can't see how you train new American leaders without human interaction.

This all sounds inhuman and cold to me.

Mentoring young people is important. I have 4 in my office. I plan on being in more this fall to help them with development. We have done very well in a remote environment but we are aware of the importance of mentoring and personal development for our young people. We are not going back to 100% in person. We have taken less square footage and so long as we deliver results, we will maintain status quo.

How often are you in person with them?

Wanted to clarify that I don't think 100% in person is needed. I guess I'm just reacting to the idea of 0%.

[Typical Lax Dad]

Every CFO or CEO Ive talked to thinks remote work is wildly unproductive. They do occasionally check internal messaging networks for green lights and get ticked every time they see 80% off. (Kind of like Bloomberg dot colors). Most would prefer hybrid at most 2 days offsite in a week.

Unlocking The Remote Work Productivity Advantage

A study conducted by Stanford University in the summer of 2020 discovered that remote workers were 5% more productive than those working in a physical office. By the spring of 2022, remote worker productivity had risen to 9% as businesses became more familiar with remote work practices and invested in technology to support it.

I don't doubt every CFO/CEO you've talked to thinks it's wildly unproductive for a number of reasons.

It's shining a small light on the unspoken truth we all know. That a lot of time spent at the physical office is already unproductive. Pushing for too much in-office work is gonna lead to losing good employees. Cutting off their nose to spite their face.

Yes, folks are forgetting something: almost every manager working in the world today has been working in-person for decades.

Folks are ASSUMING the people skills and management skills just fell from the sky.

What's the plan for 20-somethings to learn how to deal with people and systems if they have never set foot in an office with other people. Never seen how a good manager operates OUTSIDE of the rote "we need to execute x, y, and z" on a Zoom call?

How do you mentor over these non-stop zoom calls?

I'm 100% for giving power to the people. I'm simply pointing out, I can't see how you train new American leaders without human interaction.

This all sounds inhuman and cold to me.

Mentoring young people is important. I have 4 in my office. I plan on being in more this fall to help them with development. We have done very well in a remote environment but we are aware of the importance of mentoring and personal development for our young people. We are not going back to 100% in person. We have taken less square footage and so long as we deliver results, we will maintain status quo.

How often are you in person with them?

Wanted to clarify that I don't think 100% in person is needed. I guess I'm just reacting to the idea of 0%.

2-3 days. Someone is there with them every day. Nobody is in person on Fridays, generally. It’s important for them to have access to experience. I take them out to lunch once or twice a month. You can see the growth, post covid as we have had more in office presence with them. It’s one of the things I like.