Commercial Real Estate is Imploding - Sam Liebman #5543

Summary: New York Times bestselling author Sam Liebman sits down and chats with me about real estate; specifically, the we discuss the valuation of office buildings, which is rapidly decreasing. This is largely attributed to the pandemic. Many tenants stopped paying rent, and Sam predicts that valuation of office buildings will soon be lower than mortgage. With less people going back to work, this sector of real estate is looking barren. Tune in for more information.

Highlights: -Interest rates have gone through the roof -The real problem is the technology regarding the effects on office buildings and retail -You don’t have to live in the city to do business in the city anymore -Manhattan office buildings are only 40% occupied—which is terrible for the valuation of real estate -During the pandemic, tenants were not paying rent -Soon, valuation will be lower than mortgage -We are probably going to see an avalanche of foreclosures. -Rents are going up, but so are operating expenses (i.e. insurance) -Governance has fallen victim to politics -Remote work is still very attractive to people considering employment options -Florida wants to cap the amount you can increase rents to 15% -If Florida doesn’t have an income tax, where is the money going to come from to build? It needs more infrastructure

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