LeafOfFaith
Well-known member
Would also help crush the commercial real estate market.
OT: Post Corona - What Will Change?
- Thread starter Habsy
- Start date
MindzEye
Wayward Ditch Pig
commercial real estate is going to have to pivot into converting that floor space into something else. The easiest conversions are probably warehousing for suburban commercial real estate and condos/mixed use for office towers.
Companies are going to have to invest heavily in their IT backbones over the next 12 months. They're also going to see employee satisfaction and productivity go up over that period. Coming out of the back end of this, they'll have to make a decision to scrap all of that and go back to the old way, or cut a lot of the cost of the physical floor space. It's a pretty easy decision truth be told.
LeafOfFaith
Well-known member
We're going to see a lot of office buildings at half capacity.
I don't know that there's going to be enough use to fill up the space. Already the world is struggling with what to do with all the retail space, and now the rush to drop office space will be on. You can get creative all you want, but I don't think you're going to have warehousing on several floors of class A and B high rise buildings. Converting to apartments is going to be difficult too because the market is already flooded and the cost to own living quarters in a high end office building probably wouldn't be justified. So unless there's some large scale unexpected use that no one has thought of, all of this points to rents going down, way down. And lots of vacancies at the same time. But those mortgages will still need to be paid.
I don't know that there's going to be enough use to fill up the space. Already the world is struggling with what to do with all the retail space, and now the rush to drop office space will be on. You can get creative all you want, but I don't think you're going to have warehousing on several floors of class A and B high rise buildings. Converting to apartments is going to be difficult too because the market is already flooded and the cost to own living quarters in a high end office building probably wouldn't be justified. So unless there's some large scale unexpected use that no one has thought of, all of this points to rents going down, way down. And lots of vacancies at the same time. But those mortgages will still need to be paid.
LeafOfFaith
Well-known member
Okay, Karl. Having the elites fail and crumble will have an effect on the masses, you know.
Yup , the days of build it and they will come at your price and terms is coming to a new reality
leaffan2005
Well-known member
Yeah, I have a hard time feeling bad for commercial real estate vendors. Their days of price gauging and taking advantage of desperate business will hopefully come to an end.
zeke
Well-known member
How will the world ever cope with....lower rents?
MindzEye
Wayward Ditch Pig
Small business people need to learn how to do business in 2020. I was part of a few small business networking groups and the amount of people in the 30-45 yr old age group doing business like it was still the 90's was pretty fascinating and tragic. Maybe 1 out 10 had any working clue of FB/IG ads, fewer still even know what SEO means other than maybe the random anecdote about them firing their previous "SEO" because they didn't show results, etc, etc.
One of those things they need to learn is that every sq ft of physical space is sacred and online presence isn't negotiable anymore, it's a requirement. Fixed costs are death if they're not returning legitimate value (high traffic visibility, etc)
MindzEye
Wayward Ditch Pig
I'd personally take taxing gains at a much lower rate than labour
Too much money is made by moving money around somewhere in the heavens above us mortals
Why is a day trader like CH being taxed similar cap gains rates as a billionaire?
zeke
Well-known member
Yeah you're right - though at least there's not much barrier to the investments market.
The price to purchase land is a massive barrier, though, and it's coupled with the fact that if you can't afford it you have to pay rent to the people who can.
LeafOfFaith
Well-known member
You want people investing their money. I don’t know that a 40-50% tax on gains would keep money flowing to the markets as it is.
leafman101
Well-known member
A big problem is wages. Wages relative to inflation have been relatively stagnant since the 70s, while the market as a whole has gone through the roof. All the wealth gains in GDP were concentrated at the top.
More people used to be able to afford houses.
More people used to be able to afford houses.
leafman101
Well-known member
A higher capital gains tax on billionaires isn't going to stop billionaires from investing and making more money.
MindzEye
Wayward Ditch Pig
It's not going to go from 100% of current demand to 0%. It's going to go from 100% of current demand, to like 60-70% and that space isn't going to become delipidated and look like a futuristic rendition of detroit, it will get bought at various levels of value by companies looking at changing it into something else.
MindzEye
Wayward Ditch Pig
You want people investing money into activities that cause economic growth. When you look at "investing = good" taken to it's modern extreme, you see a complete uncoupling of the markets and the economy in it's entirety.
The market is important in it's function to provide liquidity to businesses that actually serve economic purpose but it needs to stop being our god.
CH1
The Artist Formerly Known as chiggins.
Day traders are taxed like a regular business (gains - office and other expenses)
Big investors get the bonus of lower capital gains taxes. But firms like Rennaisance (legend algo traders) are now being taxed like a business -- and they are currently fighting the IRS.
The problem right now and its way worse since Covid took over is the middle level classes in general cant keep paying the price for government failures and fiscal stupidity .
Too much tax , too much waste ( gas plant fukc ups etc..) , insane golden defined pensions , etc... are put on the 80% of the population to carry the burden of debt and help pay for it.
The banking world has basically created a system of carry your life on a monthly payment plan and we took advantage of cheap lines of credit and
dont pay for 24 months interest free on stuff we like and it left us with no wiggle room to absorb any shock in the system , as 2/3 live week to week
Now debts are going to balloon for the foreseeable future and we are the ones stuck paying for this shit
The rich dont give a shit cause they have tax havens to stash their money , or have other advantages that allow them to avoid paying a fair share of tax.
The worst case scenario has hit the world , and now the challenge begins to put humpty dumpty together again .