The 'Urban Doom Loop' for Commercial Real Estate w/ Stijn Van Nieuwerburgh
Real Vision: Finance & Investing
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The Heterogeneity of the Office Market
In office, we can also talk about climate regulation that's going to shave off a few more percent of value. You can have a perfectly healthy class B office building in New York City be worth $100 million in 2019. And this asset is worth $38 million. It lost 62% in value. That's like a 35% revaluation of an otherwise perfectly healthy cash flowing asset. Now add on top of that all the cash flow trouble that we've been talking about from remote work, especially in the office market and maybe also e-commerce in the mall market. So there is a flight to quality going on in office,. The very best, very youngest buildings are doing reasonably well
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