181 sats \ 0 replies \ @windward 25 Apr \ parent \ on: Gradually then Suddenly- Is Suddenly almost here? econ
He was proposing that this was happening to prop up commercial real estate demand
Your colleague is right.
Unlike residential real estate, commercial real estate rental leases last years. And after lockdown, loads of businesses are either realizing they don't need as much office space or can't afford it. Businesses are not renewing leases.
Zoning laws in the US make it prohibitively expensive to repurpose the building for something else - say, apartment/mixed living.
And the landlords don't necessarily own the building.
To quote the NPR article above:
If office landlords can't make good on their loans and ultimately hand over the keys, banks would need to find new buyers, a tough task when interest rates are high, credit is tightening and concerns about the economy grow.
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