What To Do With All The Empty Offices In U.S. Cities | CNBC Marathon
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- čas přidán 22. 05. 2024
- Now that the remote and hybrid work revolution has begun, many cities are filled with empty or half empty offices, creating very quiet downtowns. At the same time, the U.S. is experiencing a housing crisis. CNBC Marathon explores if U.S. cities will convert offices into apartments.
Some U.S. mayors are loosening up rules that determine how developers convert office buildings into apartment complexes. The conversion trend sped up in the 2020s, as the pandemic remote work boom reshaped cities. Declines in office activity are straining tax revenues for city services like education and transit, leading some local leaders to prioritize increased conversion of dated buildings. These rule changes may create some additional housing supply in regions like the U.S. east coast.
Meanwhile, San Francisco is facing its highest office vacancy rates in nearly 30 years. At the same time, the city is facing a housing crisis with the state demanding 82,000 new units of housing to be built by 2031. CNBC sits down with San Francisco Mayor London Breed to discuss how the city could tackle two of its biggest issues head-on. Plus, CNBC visits a building in the Civic Center neighborhood that undertook the biggest office-to-residential conversion in the city to date.
Major American cities such as New York and San Francisco face serious problems - mass migration, empty offices and declining tax revenues. These trends have had a direct impact on cities, which rely on tax revenues for funding, a significant portion from commercial real estate. Stijn Van Nieuwerburgh has defined this cycle of spillover effects as the ‘urban doom loop.’
Chapters:
0:00 Introduction
0:51 How Empty Offices Become Apartments In The U.S.
12:28 How San Francisco Can Solve Its Empty Office Problem
26:35 How Empty Offices Are Ruining American Cities
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What To Do With All The Empty Offices In U.S. Cities | CNBC Marathon
![[Vowel]물고기는 물에서 살아야 해🐟🤣Fish have to live in the water #funny](http://i.ytimg.com/vi/3G9MH063Cx4/mqdefault.jpg)
Makes sense to me. In parts of Vancouver B.C. we see this exact situation. First floor is retail with drug stores, grocery stores, restaurants etc. Floors 2-5 are professional offices with accountants, lawyers, doctors etc. Floors 6 and up are apartments or condos. Perfect for seniors who have mobility issues and have hung up drivers licenses. Drive your mobility scooter to the elevator to go out for coffee etc. If you're lucky your doctor is in the same building. Like mentioned the issue is retrofitting plumbing, heating etc. to fit the new use. The question for building owners is what costs more. Renovations or going without rent.
Vancouver, BC tries and that's awesome. Dig that! I wish the U.S. would put in even half as much effort into truly mixed-use bldgs as more than a promotional piece, but really walk the walk!
Are houses that cost in Vancouver also built in 1947 and are in crumbling condition that cost $2.5 Mil?
@@rasul407I’m not sure what you mean but yes, housing in Vancouver is outrageously expensive. Worse than anywhere in the US except maybe Manhattan and SF.
No one gives af you got far worse issues bunch of Nazi sympathisers
Terrible idea downtown is usually too noisy for seniors not to mention they're on a fix income.....
In Houston, where I live, I think we have the highest office vacancy rate in the country at about 25%. There was a period where there were just cranes everywhere, even some being finished off right in the middle of a period when half the people were at home. But, suddenly, a couple of years back all these residential towers start going up, and apparently, those are selling quickly. So I think there would definitely be the demand there. People are sick of 1.5 hour commutes in heavy rain.
Houston really needs to start building up and not out, I'm tired of driving 2 hours and still being "In Houston" when I gotta go across town.
What struck me as weird about the report is not talking about Houston. It seems weird that they keep starting new residential towers when there's empty offices everywhere. And Houston in noplace on that list of cities doing it? Especially considering that when it comes to getting permits there can't be an easier place to do it. They actually have been building up a ton--just not places you can live in@@masonhl2000
@@masonhl2000that’s true for a Lot of cities here in the USA.
The biggest problem with Houston IMO is the added expense of car parking for apartment dwellers. Houston is not a city you can navigate without a car, so even if you can walk to work, you still need the car for groceries and visiting friends and family.
Well, I think everything is fixable. You probably could have enough people who work in the area who would trade 2 or 3 hours a day driving and I do believe new public and prive infrastructure projects could be supported enough to allow people to live and work within walking distance. But it would take some kind of planned public private partnership which is anathema to Texas at its core. @@Avantime
We need to build more multi purpose modifiable buildings as we build newer ones
Honestly yeah why aren’t more people saying this
Modular spaces are basically a warehouse. Residences have the additional challenge of the demand for external windows to at least the bedrooms if not every room, which is why commercial builds are problematic to convert given their largely artificially-lit spaces occupied only half a day during the work week.
WE? you need to go get a loan and get it done if that is what you want.
Sounds good, but I imagine the problem is that doing so could severely hamper the efficiency of a building by being designed as modifiable for different types, lowing how good it is for another. Like for plumbing and all, an office doesn't need inner pipes going everywhere, but housing does. So you either build piping as you build the building as an office, making it useless, or end up heavily changing the building to modify anyways.
@@Sunlest Its hard to do modifications on commercial property especially one that would be residential too since youll be subjective to residential and commercial laws. You wont be able to shut a floor or section o the bldg for modifications. If you are able to modify a floor itll cost just as much to take all your equipment needed to whatever floor your in and thats before any work has been done. Its just wont be profitable for anyone for a building to be modifiable
The guy said in real estate they dont do things out of the goodness of their hearts...dont expect bailouts from the goodness of the publics heart either.
Correct. They expect bailouts because they generously "donated" to their local politician's campaign
Pfft we get a choice all of a sudden?
PREACH
Postman Brothers are a perfect example. Conversions to high-end luxury apartments.
@@mimianti-stush231 not all people can afford high end luxury housing, people just want a place to live.
We can put a man on the moon, but we can't add plumbing to a building??
😂 I think they can but it's so costly that they might just as well rebuild . That's what I heard elsewhere
It's all about how much it costs. But of course we can
Was that really your main takeaway from this?
Exactly the US has "The Best" engineers and creative designers but we can't reverse engineer these things into something else 😂 what an absolute joke
London Breed said she will be bringing solution to the legislators, which she knows they won't be open to. So she is saying she has no expectation of any potential of suceess, but she's doing it anyway. That tells you everything about why this won't be solved.
Imagine going through the effort of looking for jobs only to get laid off , how are we supposed to earn if everything is empty
jobs are still there. just need to adapt to the new environment. sooner or later they'll realize that they can't have AI do everything
I was technician working in "high tech" industry for some big names like H.P and Sony but still get laid off after laid off because either the products obsoleted or they moved the production to China/Mexico. Who fault should I blame? It is "survive of fittest" rule we learned in high school.
You create something of value to society
The offices are empty because the dynamic has shifted to work from home as a result of the pandemic, not because the jobs went away.
My company still has some office space but has reduced their footprint nationally I would guess by 2/3. My local main office, which had a couple hundred employees at the start of the pandemic in 2020, has closed entirely after several years of work from home. It sat mostly empty for a couple years and when the lease expired, it made little sense to renew. We have another small local office still open for some job positions that aren't suitable for remote work.
My team is no longer exclusively local, they work remotely from locations across the country, as well as near-shore and off-shore locations and because of that, even if we had kept the local main office open, there would be no point in me going in.
My company has never stopped opening new job positions and hiring. The audience has changed ... it is no longer limited to local talent who are able to commute to a physical office.
@@johnmininger7472 May I ask the company name? Sounds like the career I may be looking to pivot to in mid-2024.
I work in Sf , at a Junk removal company, I’ve cleaned out T -Mobile, Ultra beauty products, etc etc… my company is booming… from my perspective it’s nuts…
¿Puedes explicarnos lo loco que es?
All I am hearing is the profit motive is far more important than helping people with the basic necessity of shelter.
I mean what do we expect???
This is America. The entire point of existence is to turn a profit. Human beings are at best, an extremely distant second.
I can't believe you aren't paying the rent for a stranger out of the goodness of your heart
That and upper class snobs being so disconnected with reality. "There won't be enough windows with natural light. People will never want to live in these apartments". It's like the wealthy get off on watching the lower class suffer.
Private companies will always look for profit! Just put yourself in their shoes
In Korea, they started doing what they call office-tel, multipurpose office-hotel (or residential) in the late 80's until now.
Yes that's called "concentration camp".
@@Sweethands4 not German style
those had central showers
just as expensive and hard to save for a house out there too
I love Korea
The problem I see is that all of the office to residence conversion are rentals, versus condo ownership. There is enough (too much) rental/lease residence in major downtown cities already. Ownership brings stability and buy-in to the community, versus the "here today and gone tomorrow" folks. Developers/Investors might not like it, since there isn't the enough profit margins for their liking, but local governments and their tax incentive programs have to look out for the long term future of their cities. Just my 2 cents.....
On the other hand, owning an office building with no one working inside it is just a money pit for these owners. Maybe selling a floor to a homeowner wouldn’t be such a bad thing.
No one likes buying apartments because they generally don't rise in value in accordance with the housing market, compared to normal suburban homes. Why? Families start to want space when they have children. The valuation being detached from the general housing market makes mortgage lenders jitterish in terms of giving mortgages to apartment buyers, further hurting demand. So people who buy them are typically investors who rent these units out for an income stream - the lenders like this arrangement better. And then there's the upkeep costs of a high-rise, which could sting owners with huge bills, often for stuff they don't want (e.g. communal gym, pool). Also unlike a house which could in theory last for more than a century, a high-rise may not survive that long especially if upkeep isn't done properly - an apartment isn't something that you can pass on to your grandchildren.
Office towers are especially expensive both because of the ultra prime real estate (so building owners don't want to sell up for cheap, which makes those converted apartments unaffordable for those investors and tenants) and they're built according to the desires of well-heeled corporations, and so they're very expensive to maintain. I mean how many apartments have floor-to-ceiling windows? Just think of the heating costs.
@@BrowncoatGofAZ It's not a money pit if it's tax deductible. Some foreign investor syndicates use it to park their wealth in the US as part of a diversified investment portfolio, as commercial real estate carries much more risk compared to just buying a suburban home.
@@Avantime sounds more like corrupt businessmen storing their money in Swiss bank accounts.
Tell people they need to change the American culture of making profits, to actually creating affordable homes so people can live not on the streets. People over profits.Take Japanese culture and living for example.
Everysingle person said how it's impossible or difficult to convert offices to apartments and literally every single issue they listed is solvable, many of them a problem that's only a legal problem.
we need mass zoning reform all across north America. #1 is we should abolish mandatory parking minimums. requiring a minimum amount of parking increases costs for the developer and makes density more difficult. it's a lot easier to build an apartment tower if you don't need to spend tens of millions also building an underground parking garage in order to hit the minimum required parking spaces. this also encourages more walking and bicycling riding. and if developers want to include parking they can build a much smaller number of spaces then just rent those to the people who do want them. parking minimums make low-cost developments a non-starter.
@geocam2 bollocks, as a office building it contains significantly more persons than as an apartment building.
Not continuously though, only for half a day during the work week. Residential builds are even more demanding on life support because regular people (who are not security and facilities professionals) occupy the building at all times.
It's an economic problem. All of those construction workers, engineers, architects, plumbers, electricians, etc aren't going to work for free or for peanuts.
Of course it can and has been done a little. As they lay out it's simply going to cost a fortune, so rents will be high, as much as luxury apartments in the same areas.
So we can't really "afford" to build affordable housing in vacant office space because contractors can't make enough profit off of low cost housing and cities "need" higher end housing to keep the tax base up (regardless of whatever reason they give, it's the tax revenue).
1) If it can be built, it can be built at less cost. THAT is nothing more than a management and engineering problem
2) Don't tell me fees, regulations and taxes can't be addressed in a manner appropriate to accommodate low cost housing conversions if you're the City Government
Some of them can probably be converted to dorms or retail or gyms where only 1 big bathroom is needed
Now everyone would be forced to look into getting a work from home because we can’t stay unemployed forever
If the office is empty then no one works there already. It would do nothing but open up homes.
Pretty much any "work from home" will likely be replaced by AI soon. So that's not safe either. It's going to be a wild ride.
@@Runco990 In your view, what do you perceive as "soon"? 5-10 years, 10-20?
@@keikofay9804 If I were to guess.... taking into account that AI advances are NOT linear but exponential, I'd say under 5 years. And I think that's CONSERVATIVE.
You are better off unless it’s a newly built apartment building, most of these houses look pretty old and disgusting! “Historic” “Victorian” yeah give me a break..
I’m glad I still have my side hustles going on because a lot of people are getting laid off either for AI or some other reasons , it’s like the government forgets we also need to live
It's not the government's job. Stop whining.
it is absolutely the governments job, a business has the sole focus of being as profitable as possible. A governments job is to step in and make changes for the better of society.
So why don't you help them remember then like the rest of the world does outside of the Anglosphere?
@@braticuss un-fortunately it is.
@@pranker199171where did you learn this? Socialism 101? In a free society it’s the individual’s responsibility to provide for themselves.
Housing scarcity especially in San Francisco Bay Area are largely due to difficulties building upward and outward. Hold the policymakers accountable
"upward and outward"
Oh yes, like China or Hong Kong, how exciting, sky high buildings and nothing else till the sea meets the sky.
@@NGCS-ej4lzhow else will you house people in limited space you dunce
All you have to do in San Francisco is drive,over the hill and see stretches of endless single family houses and you’ll see why they have a housing shortage.
It isn't just lawmakers unfortunately, the people of of San Francisco, mostly people who have owned homes there since the 60's voted against buildings being able to go above a certain point.
@@FordDraper100%, you nailed it. Locals that have owned their homes for over 20 years are trying to protect their home values by voting people in that pass laws that don’t allow for building over 3 stories
The truth is that office space goes for a premium compared to residential. The sqft rate is probably 2x higher on office space. But if there is no one there to rent the office space, then you get nothing at all...
Why are they all empty then?
It's a serious shame they lacked the foresight to make office buildings easily convertible to residential when they initially built them. The idea that we'd have workers crammed into pointless cubicles for years to come was a mistake while the internet was becoming rapidly adopted. All we needed was a global pandemic to show us how pointless commuting was for a large portion of workers. Late stage capitalism will keep the heaviest burden on the working class, the land owners don't want more affordable housing.
Easy for you to say. But regulations and profits margins tell otherwise
Probably a lot more expensive to build to be compatible for both types
Commercial requirements and residential ones are considerably different. 24-hour occupation, external windows, and individual bathrooms per tenant are demands that offices don't have to deal with.
Lol you say as if you’ve physically built the alternative yourself. It is a shame, why not go show them how to fix it?
This is a lot easier said than done, and many office buildings are constrained by their footprint
As a New Yorker, I'd be fine with a new camping tent.
My old 1-man canvas A-frame just not keeping much heat this winter. It was a little warmer last winter. It's been getting difficult to keep the snow out of the street-side gash in the canvas this winter.
Hit me up I'll rent you a 2 person tent in Manhattan just sign a 13 month lease for $3600 a month + facility charges and a mandatory renter insurance, I have 1000 tents but I'm inventorying 999 of then so I can am willing to rent my low supply, my last tent on the market at 3600 and of course you need to pay 3 months of rent in brokers fee and one month's rent in security deposit. Also 3600 is with a rental credit if you are late on rent the credit be removed and total rent will be 9000 a month. I also want your first born son as well because heck I'm a nyc landlord and a Satanist.
It's mentioned at the end of the video that you can't make apartments for most of the buildings, but you could use the space as entertainment or hotel spaces........ If you can convert it to a hotel, you could also make it into an apartment.
If wfh would be the new normal culture, chances are people would also spend less staying out the night. Unless that building is located in tourism spot (turn it into tourist hotel) or higher the best designer to turn it into boutique hotel (to be able to compete with big hotel). Best still cafe/resto/ community places
Hotel spaces is not hotel rooms. Hotels have large restaurants and convention spaces, service, laundry and circulation spaces. Not to mention, even hotel rooms are not apartments. They lack kitchens, storage, individual A/C control, ventilation, not to mention the fact that all the units would necessarily need to be small studios on the perimeter wall, which still does not solve the issue of the large internal dark space.
@@serebii666 sounds cliche but cafe/resto/community spaces maybe?
@@duolingosession the issue with skyscrapers is their vertical distribution of services. This puts community spaces and cafes at a serious disadvantage due to accessibility and interaction. That is by these types of spaces are almost always on the ground floor, at street level - so patrons and passerby can people-watch, and have that level of social interaction. And while there are penthouse level restaurants - that is their entire gimmick, views of the city. That makes stacking restaurants on top of each other, let alone at lower floors a diminishing return since only one will actually have the desirable views and all the others will just be less accessible.
@@serebii666 art spaces with skycraper view? Idk. Must be a way
What a surprise: those in authority or a position to decide what happens regarding the populace refuse to sacrifice anything.
The recession wouldn’t be that had on us if only most people took out their time and finance to venture into investment opportunities, most people live in comfort of savings which won’t cover up for much on this recession
You are right.!
That is why I had to start forex trading 2months ago and I now am making benefits from it..
I'm glad I was introduced to forex trading and got the best teacher and mentor who helped me understand the financial market l'm grateful to Mrs Shanita 🙏🏻
A common mistake we newbies make is venturing into the market without help and legit guidance
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3:47.....Did she just say it's silly to have a bathroom in every apartment...wtf lol
My boss asked me to return to the office, so I literally did --- to live and sleep as well. I'm not waiting for the conversion.
I fired my boss instead of going back to office
Some government officials are thinking about doing the same in Canada with the whole work from home situation. Many public servant can do 99% of their job remotely anyway.
Those gov officials know nothing about buildings. Not a cheap fix, so not profitable enough for developers. Getting those up to code for apartments costs more than people think. It would take gov/tax payer investment. Ottawa specifically has so many empty gov buildings it’s crazy.
@@geocam2As mentioned in the video, Calgary is converting 6 million sq feet of office space to residential. It’s very much possible and I know this because the office building next to my apartment was a conversion finished back in 2019 and they completely rented the building out in under a month.
Bitter pills; those public servant can be replaced by AI anytime soon
@@duolingosessionnot possible bro
It's about bailing out the failed commercial real estate market. These units will be garbage but governments are offering cash incentives to do it.
Why not use them for hospitals,schools,universities and even warehouses for precious metals and expensive jewellery,banks can use them for lockers.
Just saying.Why not explore.
In NyC they actually did this with artist studios, schools and warehouses in the early 2000s. But it requires tearing down multiple floors inside office spaces together the appropriate ceiling height. In other cities companies like extra storage have been using vacant complexes to provide storage solutions to people.
because the housing shortage is the most acute one that's why
Regulations. There's all sorts of regulations required for school buildings to the point that only a dedicated build just for schools can fulfill them. It's almost as bad for the conversion from office to residential. Without regulation change, it's often literally cheaper to demolish and rebuild than to convert.
We already have enough of those things. Why would we want to use our most valuable downtown real estate for bank lockers?
I work for a big tech company in a tier 2 city. No one is coming into the office despite the demands from management. Eventually management will give up their office leases. Commercial vacancies will increase soon.
Where my wife works its like 99% remote. I've heard nothing of them returning to office. I doubt it will happen ever.
Power to the workers of the world.
You could adopt China’s model for the homeless and use some to create internet/cyber apartments/pods that the homeless people who make a wage but can’t afford housing can rent for overnight housing. This provides a place for the impoverished while working forward a livable wage. Taking a couple of building and dedicating it to this initiative to cure homelessness for those who have a working wage but not a livable wage. You wouldn’t have to convert to individual plumbing the units would have shared bathrooms like a dormitory set-up etc. This ideal is worth discussing and mapping out pros and cons relative to the population of interest and the social and economical impact.
Upvote
This is inhumane. Practically company towns... What's next? Slavery? Cure homeless addicts and mentally ill, don't warehouse them. Dont invite mass immigration we cannot support.
China's model for the homeless is hiding that they exist, not actually providing housing.
The major difference between office space and residential space is the need for humans to sleep. The safety provisions for sleeping people inside buildings or any structure are vastly different than for fully awake people. All sleeping rooms must have immediate access to the outside, generally through a window if not a door so bedrooms must be located on the exterior walls of the structure. Office space can be just the opposite and often is, so the core building is designed differently, running power, plumbing, etc. up through the interior of the building with little access out from there to the rest of each floor. Residential space needs plumbing throughout and fire codes to accommodate stoves and ovens.
Sleeping is a waste of time. Look at all the work that can be done that is wasted by 8 hours of sleep. Humans need to adjust.
@@marblox9300 Human beings are far and away the most adaptable creature on this planet. Sleep is a necessity for all animals; major brain stuff is happening there that affects all organ systems. No sleep at all and you die. Chronic lack of necessary sleep will shorten your life and reduce your productivity and happiness. All the brain research in the last 20 years has discovered how critical sleep is. Go read about it, comprehend it, and sleep well. You might experience an attitude adjustment.
I see in the future turning most office buildings converted to living situations becoming the new "projects" like in the past.
The past is always a guide to the future.
Unfortunately humans don't learn from their mistakes.
sad that so much politics get in between easy solutions..
No worries guys. The developers and investors will convert those to the smallest acceptable apartments with the highest rents possible.
Thank you to our financial overlords!
Lighten up Francis.
@@theodoreolson8529 Okay Blanch.
they are soo mercyful.....................................................
@@BradKwfc No man, it was a reference to the movie Stripes 🙂 Although Golden Girls is awesome too
If they're acceptable, what exactly is your problem??
I can see it now. 500 sq foot "luxury" apartment starting at $1,550 a month, parking and utilities not included.
$1550 a month would be dirt cheap for San Francisco.
@@unconventionalideas5683 I heard you can't get a cardboard box on skid row without a 200k down payment out in Sanfran! :)
It’s happening in Sydney Australia as well.
It's a worldwide thing.
Repurposing office space into living space won't do a thing for anyone other than those who can afford a small $2-3k/month apartment. Sadly, that isn't a lot of people.
You'll own nothing & be happy.
Even if they did convert those buildings into apartment, they won't be "affordable." An apartment in Manhattan will range from 4k - 6k.
I love the way the mayor of SF talks like it’s such any easy transition. It doesn’t help their homeless issue and many people who can afford it probably don’t want to live downtown. These conversions are not affordable for the average person.
We kind of don't even know who's It's for. It's for a specific group of folks who want to pay a huge price to live and work downtown in rent & taxes vs just going remote or working elsewhere.
it is easy. like she said many politicians refuse to do it because they are in the pockets of big corps. Not only that but many offices buildings Pre 1960-1970 are convertible to housing, that was a building requirement. but big business came in and removed that with the help the politicians in their pockets, which is why now any building built post 1960-1970 are expensive and essentially tear downs and rebuilds, making it more expensive.
1) Government should help pay for the conversions so developers are able to offer more affordable housing. The only stipulation i would add is that the affordable housing should be perm. right now many new places with certain affordable housing units are temp for a decade or two. If govt pays for 60-70% of the conversions, that would still allow for enough affordable housing and regular rental/purchasable properties for developers to make money.
2) yes, theres no place left to built in SF meaning certain areas that are single housing and underutilized should be converted to taller buildings that are earthquake proof. Ease the restrictions for developers, impose comment #1 and you have a market that is approachable to developers.
3) Change the laws to make future office buildings and reimpose the laws that they need to be built with the possibility of being converted to future housing. This way if office buildings are vacant, you make it easier for developers to turn a profit and help continue building more homes
4) also work with other bay area cities and begin the same kind of conversion. Start spreading out major tech companies, biotech companies and redistribute the traffic flow, money flow so the entire sf bay area gets to enjoy the markets instead of just SF or silicon valley.
plenty of easy things, its only hard because the existing politicians make it hard.
It's the Great Capitalist End Game that is working so well.
But without any commercial buildings, what is the point of living in a city now? The warehouses are gone, industry is gone, and now white collar industries are leaving. I’ll much rather live in a suburban community with nature and plentiful space than a crumbling city of another era.
Cities are obsolete now, and once the leases are up, no reasonable company will want to renew their building leases. And suburbs will adapt to become more walkable, becoming more village-like to appear attractive to people.
@@sunshineimperials1600Unless the suburbs do a better job with land management and allow for more people to live in those areas with different housing archetypes other than just a single family home, cities will NOT be becoming obsolete anytime soon imo
@@wbay3848 Have fun in your dystopian future then I guess.
@@bigbrainweeb7848 American suburbs were built specifically for sprawling single-family homes, and while improvements are needed, I don’t think people will be abandoning single-family homes anytime soon. I’m sure suburbs will become more walkable however, especially if urban planners get their heads out of their asses and consider anything other than a densely-populated city being the solution to every problem in America.
@@bigbrainweeb7848 And I’m not arguing for urban sprawl either. Just small and simple villages, with a decent and walkable Main Street, alongside some farms, more common areas, and tight-knit neighborhoods.
2020, The first year the pandemic happened - I was thinking the same exact thing. Ain’t no one returning to the office long term. The choice seems clear: either see your downtowns turn into skid rows with abandoned office buildings, or convert/replace those buildings with residential and shopping
The conversion difficulty highlights the ease of building offices space and packing in workers with little regards to people's wellbeing. Apartments need lights and a lot more plumbing, electrical work, and walls and nice fixtures. Office spaces are full of open space and little cubicles and long walks to amenities such as bathrooms, break rooms, and outdoor spaces. I haven't even mention adding politics of adding amenities adding hospitals and schools. Because offices ignore debates of how good the schools are, which can get heating in local politics, too many developers simply prefer constructing offices because it is too easy. Residentials are just that much harder to create. It is much simpler for politicians and interest group to announce new companies moving in to new office space, while families debate about school capacities and rent prices.
It is possible to just live in the window offices and cubicles. The window offices will be rented out per room, and they are higher in cost because they have windows and natural lighting. The cubicles will be much cheaper per unit, selling for just a few cents or a few bucks. There will be 3 bathrooms: men's room, women's room, family room. Break room will be converted into a cafeteria where people can get food and eat inside or outside. Outdoor spaces will be shared.
czcams.com/users/shortsYgoZ5fVzC5s?si=I_3RQvMu4cnoY9oA
@@kiwifruitklyou're joking i hope
Sucking up soooo much space, just empty is better than housing Americans?!?!?!? WTH 🤦 😢
We a highly regressive vacant underutilized property tax to encourage landlords to convert to housing
Change building code, zoning code, do dormitories to office building, so people share central restroom and shower.... more interactive space share space
So now I guess we have to stick to work from homes ??
Coming soon . . . streets.
Who want to stuck in traffic for hour with the cost of gas and car repairs?
Pretty much
Finally!
@@junkvista61 Even if gas and car repairs were cheap, why should use time to commute to work when we can do our work from home and use that time to do something that is beneficial for us?
The fact that this segment hardly featured macroeconomic conditions like inflation and interest rates leads me to believe that the intent of this PR piece is to use infeasible office conversions as leverage to extract wider tax and fee breaks for commercial owners and developers, without much promise that the new residential will be delivered or even possible with changing economic conditions in 3-5 years.
This video is basically investors this, profits that, muh portfolio.
Just re-zone and create a new mixed zone are like in Japan. Even in middle of Tokyo a single house stands next to a office building. The benefit is you can develop a shopping, residencial, transit station and commercial office in the same walking distance.
Bay Area does not have a housing shortage. They have a high rent problem.
It's become too unsafe and expensive to live. Forget kids - that's old school.
Try renting office space in a big city. Supply and demand suggests the costs should be less. Nope. The property owners still demand huge rents despite a glut of office space available. I do not understand how they think it makes sense. Are they paying taxes on that property while empty and hemorrhaging money? I do not know but one would think getting someone in to pay rent is better than nothing.
Commercial leases are often like 10 years, and there's considerable costs of switching tenants due to the alterations they'll further do to suit their needs. Just taking down their front lobby can be a major undertaking.
We need accountability for the politicians who kept building these damn things after the demand was clearly gone.
Not me, here thinking that these offices being converted into housing units was going to mean a mass Supply of housing that people could actually afford without working 48 hours a week
These units for most are unaffordable as well. We are doomed.
most office buildings are in downtown. If you convert them into apartment then most tenants will not be able to afford rent. If you convert them into flats then they will be more expensive than single family or multifamily houses. Taxes will be more.
These greedy developers have been bleeding cities dry for decades with all kinds of absurd kickbacks and they want more handouts for conversions? Force these mfers with laws.
Compulsory Aquisition of buildings by Government use, just like they do when building freeways....easy.
@@leonie563 There is no Compulsory Aquisition
Convert! If old warehouses can do it so can newer buildings
Interesting report, watching you from Toronto Canada. Fifteen to twenty years back we started converting office buildings to residential. It was a outstanding success and lives on to this day providing homes, taxes to the city and retail space on the ground level. Lets not look for the why nots and instead towards then when can I move in.
The issue is rent is too damn expensive. If they bring in 10k+ apartments to rent, the apartments are going to be based off market. No one can afford it. They would rather leave the apt empty for months than lower rent.
It always amazes me that the solution NEVER includes cost controls. Because housing prices are worse than College tuition increases. It's not based on anything other than MORE MORE MORE. Market factors never seem to matter.
It's the Great Capitalist End Game that is working so well.
COVID revealed that WFH or hybrid work arrangements are feasible and preferred with employees, especially with high commuting costs (with time AND money).
It's definitely a new competitive advantage for work flexibility, and any company that doesn't embrace this advantage (hybrid at minimum) will lose deals with job applicants from here on out. 🏢🤷🏻♂️
Exactly. Also, WFH is cheaper for businesses because they‘re not paying for office space. Job applicant pools become *much* larger and applicants will take a lower pay to WFH!
Exactly. Also, WFH is cheaper for businesses because they‘re not paying for office space. Job applicant pools become *much* larger and applicants will take a lower pay to WFH!
How about converting the empty spaces left by companies like Sears?
Been doing it in the UK for years
The conversions would also employee a lot of people. 👍🏼
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The problem is, is there enough money to do such expensive conversions? Or would it be cheaper to just bulldoze it and start from scratch?
Empty Real Estate=Tax Shelter
Only if you could offset profits that you’re making other areas. But if you’re a sole owner of a building you’re screwed.
As in the interest payments are tax deductable?
I often see that argument but an empty office space has zero revenue and still has costs
This was re-uploaded? Remember watching this a year ago
It appears to be a compilation of multiple videos
It's become too expensive and unsafe for people to travel.
It's become too unsafe and expensive to live.
How about lowering the rents so artists and freelancers can have large studio spaces to create.
They don’t want to do lol they make billions in taxes from those businesses
That won’t ever be a thing again. The boomers could do that, but god forbid we ever get even half of what they were handed. The “greed is good” mantra from the 80s is permanently embedded into the culture now
@@Wyrd__cat We Bommers weren't handed anything - it's just that Capitalism has taken a satanic turn downward.
They would rather leave them empty than convert to regular apartments. They will only cope with city-luxury apartments, in total denial that remote work takes away the need for city-luxury apartments. I love watching the greed system fall apart.
Remember when they used to humiliate us for not living in their cities
The renters have been so much money, they are not likely to return to the previous model. My company went back to work from office last summer but made it option 6 months later due to attrition. In many metropolitan areas the commute can be 90 minutes each way so that is 15 hours a week that the worker will never get back. Meanwhile the worker is now able to attend meetings across time zones due to the flexibility. Some are not productive with the WFH model and are weeded out.
I thought this the other day. It would be a great idea
Something tells me that this is more about keeping certain people out of certain areas than a logistics issue. Expensive project with lots of opportunities for years to come? Why wouldn’t an investor do it?
I learned in this documentary that zoning is done at the state level in New York. This is insane. I don't even know why the state would fight against giving the power back to the cities. The state employees are probably doing the best that they can, but there are certain things that need to be addressed at the most local level and zoning is one of them.
Condominiums, mixed use developments, vertical malls, yoga studios, fitness malls, observatories, student homework halls, tutoring centers, start up offices, low cost foreign student dorms, SOHO spaces, ballet studios, ateliers, musician practice halls, retired teachers' clubs, hotels, AirBNBs, libraries, dorms, public dorms for nurses or EMTS or teachers, along with gym spaces are all possibilities, in addition to apartment conversions.
Each neighborhood could also have a space for greater connection to City Hall, as well, if laid out as a SOHO type affair.
SF would do well to build apartment dorms for their teachers, EMTs, librarians, and nurses. Very low cost would be best for these particular cohorts.
The problem in these cities is high rates of crime and tolerance of dope addiction. No one wants to live in an area with high rates of criminal activity and psychotic, dope addicted people living at large on the streets. Also, the filth and public health hazards are a major deterrent to living in these cities.
This is so cool , so when the need for office space picks up they will build brand new buildings, also it solves the housing problem with old buildings.
it's sad and scary to think about how many a merican businesses failed and relocating abroad...
those vacant office buildings says it all...
Or more people are working from home and not making people commute to a city downtown to work on a computer all day is a good thing.
An old building can be quickly and easily be converted I believe. The utilities can be provided by Amazon (portable toilet,lanterns,coolers,ice makers,cooler water jugs,battery operated things in the place of outlets,and battery heated blankets with insulation). Good and simple appliances can be installed with the help of Amazon deliver(basin for soaking dishes,bottled water,Microwave,toaster oven,grill,blender,slow cooker,deep fryer, and a burner).
I can’t believe this hasn’t been shouted from the roofs as soon as the market shifted
Converting buildings is indeed not as simple as it sounds as these buildings were designed with a single purpose in mind and thus the building is designed around that purpose with regards to its construction, its living and dead weights. The sad fact of the matter is that in the past it was a thing to over-design/construct a building, but now with budgets so tight that sort of overkill in the design/construction of a building does not happen and thus converting a building from one purpose to another is generally not possible unless someone is cutting corners and making a death-trap
23:13 that is wrong. The cost of construction is vastly lower then the market sets for the price of the office or apartment complex. The market dictates the rent and the final price in the sale of the unit.
If we sold office or houses for what they actually cost to build, the real estate and big developers would not be in this business. Placing the blame on the vast majority of the labor that ... yes you have to do work to build the thing ... but the real estate and developers do relatively far less work with far higher hourly rates in order for them to "make their money"
This is by design. Its been done for ages. Devalue an area purposely to buy it cheap and sell it high. Its called greed.
Here in 🇬🇧 we are being forced to come back to work in the office.
From an electrical/mechanical perspective, its a lack of room for more conduit/piping/duct risers (vertical pipes ) within central locations that lead to main electrical/mechanical rooms in office buildings which makes things prohibitively expensive. Perhaps city planners should mandate/incentivize developers to design larger vertical shafts for future retrofit to residential?
This is all about bailing out the commercial real estate market. They know these buildings are useless now and converting them is mostly a pipe dream. It's a soft landing for commercial real estate investors while the tax payers pay their useless property.
In SF many residential units ( homes and condos) are owned by investors and operated as AirBNB. This is significant and goes unmentioned.
Sooner rather than latter space is going to become more suitable to other situations rather than offices. I wouldn't be surprised if didn't blend together.
I see some mix use buildings in my city. Underground parking, 1st floor retail shops or small offices. I think that is best use of land.
San Francisco's biggest problem is that nobody wants to live or work in a city that's become the world's largest open-air toilet.
Poo and Pee. Yuck.!!!
converting office space in retail spaces isn't a bad idea either
The need for retail spaces has been trending down for years.
The demand isn't there, at least not until there are residents nearby (ideally in the same building).
Uncertain approvals process, designing with unknown building conditions, upgrading to meet new codes, rejigging the structure, gutting plumbing and hvac, envelope replacement for operable windows and exhaust, redoing interiors...so many cost risks for little savings if any and developer ends up with compromised unit layouts that are hard to sell.
Dont forget that yuppies have no reason to be there anymore. What self respecting member of the new laptop class is living outside the sun belt in a downtown area? Count me out.
Why don't they turn them into lower costs dorms? If plumbing is such an issue, as well as high prices, make it a bunch of roommates-floorplans. Like a six person apartment/dorm with two bathrooms?
It won't work. Offices are not designed to be apartments. All the hotels in Las Vegas are tall and thin. That way everyone gets a window. With office buildings there will be a majority of windowless apartments.
Plumbing is constantly brought up as a barrier. Would it be easier (or even possible) to convert these buildings into dormitories with common bathrooms?
No, because the water lines going to and the sewage lines coming from the building are not big enough to handle people cooking, cleaning, bathing, and doing laundry. To add the plumbing, the entire building must be stripped to a shell with nothing but exterior walls and support beams. The time and labor cost of the retrofit is often higher than it would be to demolish the building and start over.
That and the lack of a unit bathroom would dramatically lower price and you'd have to build a lot more units on lower rent and end up with a massive SRO situation which isn't the worst in terms of solving the housing crisis but not what developers want.
That and the lack of a unit bathroom would dramatically lower price and you'd have to build a lot more units on lower rent and end up with a massive SRO situation which isn't the worst in terms of solving the housing crisis but not what developers want.
That and the lack of a unit bathroom would dramatically lower price and you'd have to build a lot more units on lower rent and end up with a massive SRO situation which isn't the worst in terms of solving the housing crisis but not what developers want.
That and the lack of a unit bathroom would dramatically lower price and you'd have to build a lot more units on lower rent and end up with a massive SRO situation which isn't the worst in terms of solving the housing crisis but not what developers want.
1. analyze per building into feasibility of conversion; 2. if cannot be converted, can it be turned into schools, university halls, hospitals; 3. use parts of buildings with windows into farms, as Singapore does; 4. tear down any building which is empty and useless; 5. so that inner cities end up with more open space.
Easier said than done. Construction workers would have to tear up the floors and walls. Basically gut the building in order to run plumbing, dedicated electrical panels for each living space. Install insulated walls and doors.
I've spent 24 years on high rises. Once the core work is done it's easy to make apartments vs. making offices. Why not convert office spaces to housing? Seems like a win win for building owners and people needing housing desperately.❤❤👍👍
Because the rents need to be $3000 to $6000 a month so the people that need housing desperately ,as you say, cannot afford those high rents.
@@allentarver6286 they are, check the rents in SF and surrounding cities.
The investment you choose isn't right or wrong, just depends on the kind of business person you are or simply the kind of person you are. However, the end game is investing money long term creates wealth every time. Just pick what you like and understand, invest and it will pay off. A lifetime of investing for 5 mil is not hard to accrue.
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Definitely. This is a great idea.
The intense music under the interviews is really unsettling. The topic and dialogue is engaging enough without it
I cannot get past the downgrade at 5:11... Did they take the marble out for reuse somewhere else, or do they think people prefer stinky carpet in high use areas...
It's a resident-only communal gym. And given how so many people with gym memberships don't actually go to gyms, my guess is that foot traffic is much lower, and carpets makes it more cozy for the residents, along with tasteful decor.
@@Avantime whenever I go to the gym, I always think “I wish this was more cozy”
Oh wait, no I don’t.
@@jessepower That's the difference between public and private gyms. Hard marble denotes a public area potentially accessible to the riff-raff.
Since Biden took office, there seem to have been more unfavorable results in America. These results include effects on the markets, such as price declines and sharp increases in inflation, as well as bank failures. I wonder if the sudden increase in interest rates will help value investors or if it would be wiser to stay away from the stock and financial markets for the time being.
I hope I never become as delusional as you bud
Presidents have little effect on the economy. And trump left the presidency during massive federal stimulus.
it's a Democrat in office, you're surprised? Their fiscal policy is maintaining the status quo and gatekeeping. Republican policy is growth and expansion by any means necessary. Both only favor and cater to the already haves, never have nots.
From my perspective, any investment offering a rate of return lower than 3% isn't worth my time. It's crucial to account for inflation, which typically erodes purchasing power by an average of 2-3% per year. Moreover, with the US inflation rate hitting 8.3% in 2022, this consideration becomes even more significant.
I feel it's time for me to finally take this step, despite my procrastination thus far. I'm unsure about which firm to choose; they all seem quite similar to me. However, considering your success with the firm you're currently working with, I would greatly appreciate a recommendation.
Why not convert offices into physical online stores?
Bringing people in office buildings will be a tragedy. Many of them are not up to the code for living as in a house.