Recent comments in /f/wallstreetbets

Janus408 t1_je73e1b wrote

Reply to SF commercial real estate: Office vacancy 28% (CBRE). Rents have fallen 15% (JLL) by scott_jr

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.

2

DYTTIGAF t1_je739lf wrote

Reply to Commercial Office REITS Pop after Selloff [SLG] by old_shows

You don't run into a burning building to turn off the coffee pot. You just witnessed a 50% decline in this REIT for reason.

The 100 year old business lease models are changed and it has to do with a variety of reasons: demographics, COVID stay at home work models, increases in office lease costs due to inflation and currency devaluation.

Imagine "hot" desks were workers work at home 3 days a week (and in the office the other 2 days). Sharing desk with others.

The REIT debt models are not designed to deal with this shrinkage of needed square footage by its customers.

BX just walked away from a portfolio of properties in Europe. Why? The numbers aren't working. United States market is next.

0

nokarmawhore t1_je71o96 wrote

Reply to The Road to 405 SPY/ 4095 ES… 3-29-23 SPY/ ES Futures and VIX Daily Market Analysis by DaddyDersch

The fake breakdown yesterday end of day played out beautifully. closed my calls today and am now looking to short tomorrow.

1 HR wave pretty overbought. I'm looking for an overnight rejection at 4072 overnight for confirmation to go short tomorrow.

15 min RTH which I use for intra day closed overbought after EOD push. Another reason I'm leaning short tomorrow.

Probably the only way I'll get bullish again this week is if futures gets over 4080

4