I believe the amount work you put into these real estate videos is at least an order of magnitude greater than the work the authors put into writing the articles you review.
Which is to say, more than none. Those authors are almost certainly handed all the "facts" and asked nicely to help out by writing this article. By "asked nicely" I mean paid, and I'm not referring to their salaries.
I've watched my neighborhood shopping center go from almost entirely small/independent businesses and restaurants to almost entirely shuttered or turned into chains restaurants/big retail over the past 3 years. The single unifying factor is that their leases expired. It's really depressing to see the local atmosphere get priced out because big companies can afford to have an entire store be a loss leader just to keep their brand known.
But the almost free loans to the corporations from the fed have stopped, so the loss leaders will become stones on the corporations and there will be nothing in the malls. It was all a ponzy scheme to hide how bad the economy was.
As a fellow NYC expat, I can appreciate everything you're saying here. And I didn't even own a business. I just lived and worked there, back when you could make under $100,000 and still be able to afford a cardboard box in a neighborhood without a standing gang presence. But I could see the writing on the wall, and I'm glad you can too. NYC as a center of human culture is an amazing place that has contributed incredible things to the world. NYC as a municipality and a center of business is a circus of corruption, ineptitude, and fraud. Maybe, someday, when it's done falling apart and is in some kind of rebuilding stage, it might be worth moving back to. Until then, not a chance.
That mirrors my experience. I was able to live in the city, fairly free of any major crime, and earned under $100k... and that was about 5 years ago. Now? I'd have to make at least $150k pre-tax to even consider moving back.
It's a symptom of investors controlling a business rather than an owner with skin in the game. This affects so many industries it has become the norm. Healthcare, manufacturing, entertainment, everything. In your case, Louis, you are a business owner with a passion for what his business exists to do. But if you were to bring in investors, enough to have leverage over how you run your business, then profit would become the sole motivator for that business. And that's the cancer NYC and others suffer from.
@@EssenceofPureFlavor It is profitable until it isn't, and when that change approaches you see the alert investors take profits by dumping their stock holdings. Stock value plummets as they sell, the employees get laid off to retain CEO/Board stock value if at all possible until they can find the escape hatch, the rest is liquidated to a new owner that recycles companies, and the cycle continues.
@@EssenceofPureFlavor its not about profit its about the quick ratio this determines the liquidity of a business the higher the quick ratio the better you are off losing 300k a month on a building to maintain a 200 million building(these are just numbers) is quite worthwhile when you can consider selling the building for 200 million its an accounting trick if anything
@@michaelashby9654 Maybe I see this wrong, entirely possible, but I think that doesn't change anything. And this is because the idea of the paradox is that you want to 'buy into the game' regardless of the price of entry. And that 'buy in' is the stock market and investor process I am talking about. Without that influence business can grow or fail more organically. And this applies to cities as well. NYC like many cities has invested, used public money, to attract big business and big developers. That's gambling, speculation, with public money. And now they are left holding the bag.
It's funny when Louis says he won't be paying for their failure once he leaves. Just wait until the city goes bankrupt and all tax payers have to pay for it.
@@androiduberalles If NYC goes belly up, you can bet any other american civilian is going to be paying for them to be rescued. If the fed wouldnt rescue New York it would bring the rest of the US down with it.
Louis speaks facts!!! Im a 4th generation NYer n i got tired of this manipulation of a real estate market and moved out of necessity. Only way you’ll make it in NY currently is if you go there with money in the first place.
with remote work, all the finance and tech jobs can be done from anywhere. cities have become obsolete now. just like railways allowed us to live in midele of nowhere, fiber internet allows the 200k+ earners to live anywhere (taking associated jobs like fine dining, food delivery, maids, CPA, car dealers, etc with them)
Our 10 year lease is expiring in 2 years.... (Whole floor, prestigious midtown building) - when we have approached the owner about "negotiating" a new lease, to quote the classic, "negotiations were short". We asked for a small reduction, the answer was gtfo.
Idk man. If lease was signed in 2012 at rock bottom price and yet asked for a reduction with so much inflation since 2012 in a highly wanted area. Then no wonder owner was offended
“Workers are seeking amenities to entice them to not work from home” Reminds me of when the car manufacturers were all “why aren’t millennials buying cars? Do they need… more Bluetooth integration?” Like dude there’s a fundamental issue here and it’s p. clear you don’t wanna face it.
It's two fold here...for many employers it's cheaper and for employees it's easier. As long as you have employees you trust and a business that allows for WFH, it makes sense for both sides.
@@TheMattTrakker And every real study indicates work from home is almost always less productive. The only make up is that people generally work at home slightly longer than at an office.
@@jw-hy5nq Paid for by people who believe office life has no distractions and that everyone is efficient and productive at all times while sitting in an office.
I’m a Millennial/GenZ and I’m inclined to buy low/tech vehicles from before 2010 because they are less able to spy on me. It’s actually funny how the better product comes in at a lower price.
I think you nailed it here. These buildings are probably leveraged to the hilt and it's more beneficial to the owners to leave them fallow to avoid that "margin" call. Plus, they probably get some kind of tax break for "losses" incurred. Whatever, I left San Francisco before the pandemic after looking for a new place for nearly 5 years for the same reasons. Happily living in a low cost, low tax, freedom friendly place with 55 acres to play with. I'm going Monday to pick up my new tractor that I'm getting tax free because I've started a small hobby farm raising chickens/eggs that feeds my family and my neighbors while working 100% remote for my full time job.
Good for you. Although I have ask, are chickens a full time thing, or are they mostly self-sufficient? Chickens are so cute and apparently they actually love attention and are affectionate lol
Very nice! I'm doing my best to keep my small family farm going, despite the commute. I'm planning to switch to work from home in a couple years, get rid of the commute and refocus on the farm.
Don't people wonder why 87k i.r.s. agents were recently hired and why they need to be armed?? I guess there's a whole lot of the 1% not paying taxes.. I bet..
I have an office building in the south suburbs of Chicago with real estate taxes that are 35% of the appraised value. It's 50% vacant - grosses $436k a year. The system is so broken I have to use lawyers to file vacancy protests every single year to battle escalations. Last year the county wanted $300k, we protested them down to $223k & I just got a notice from the county wanting $325k. Landlords are fighting losing battles in many Democratic run cities.
While it sucks to have the blight of vacant buildings fill up neighborhoods and taking them down in many ways, my thoughts are if these building owners want to leave their places vacant and still pay taxes on them, there isnt much anyone else can do about it. This is the cycle of economies where the people at the top get 99% of everything until something snaps.
@@LilacMonarch America is a second/third-world nation acting like a rich one. Lmao only in poor countries do politicians openly commit fraud and corruption and get away with it. Except the average people in those nations have an excuse- most are military dictatorships. We don't do anything to these politicians- that's why they get away with open corruption. All we do is whine and expect someone else to fix the problem.
It's mainly because the people who own the buildings don't want to admit that they aren't worth their stated value. Guess they'll learn once no one rents spaces anymore. They aren't willing to budge, we shouldn't either.
Equilibrium is going to fix it eventually. Recessions happen because economic conditions cause both private and public entities to build massive house of cards on short-term ideas and delusion of infinite growth Eventually the pendulum is going to reach it's max and NYC is going to suffer some....blowback from all the policies, hopefully sooner than later because the longer the problems foment, the harder the crash. The same applies to many parts of the country, red and blue, big and small, private and public companies. We've gone through a ridiculous over decade long growth bubble and it actually started showing signs of cracking towards the end of 2019 but suddenly with COVID, the fed's printing of money actually helped duck tape temporarily.
We are at the end of an era. The entire system is based on silly assumptions. If we don't end up as shadows on the walls in weeks, we have 10-15 years of this business as usual. Vice has an article about a 72 research that predicts the end of our society "Western style". Looks like I cannot post the link
@Aung Ramen That brand is rot, decay, rat infested garbage in the streets, crime everywhere, cops nowhere and to top it off they have nearly extinct diseases making a comeback. Yeah, I think I would choose boring old Ohio.
@@MessyPointedBlob sadly the recovery can take time, lots of it. I don't think Japan has recovered completely from what has been called "the lost decade " , a real estate implosion of epic proportions.
Building owners of some 1950's and 1969's office buildings are converting them from commercial to residential. They're financing it privately, not with a public-private scheme (aka government subsidy) and that is why the units must be market rate. Louis is right that this is already what was done with many buildings downtown in the Financial District.
NYC is just another example of modern art. Not particularly pretty or interesting, and nobody would want it in their home, but is rated at millions because speculative investments.
I was working for a major retailer and we were closing stores after the initial lease on properties was up as they wanted giant increases in rent , it’s all a giant scam, new leases are highly discounted then they jack the rates up
Louis. Thank you for the insights. I'm from Brooklyn and starting a private practice in psychotherapy and while all these figures may not line up to what applies to what I would need to rent, you've made me so informed of how to navigate the start of my business. God bless you and good luck in Tx!!!!!
I feel like WFH is win-win situation for most people: - The workers: No commuting, less office distractions, can wear what you want, etc - Businesses: No renting office space, no need to buy office equipment like computers, coffee machines, etc - The environment: Less CO2 from commuting, less cars on the road, less land usage
Thank you, Louis. You’ve made NYC’s insane real estate market make sense to me. I never really understood it, but you’ve cleared up a lot of the bullshit. 😁👍🏻
A long time ago, NY was always called "the big apple" and the name was synonym to the city name. I just realized, that I havent heard that name for quite a while now, i wonder why. From your tellings, the city should now rather called "the foul apple" or "the rotten apple"
I love this. How appropriate is this that an ex new yorker sits in his easy chair in TX calling out the rape of the public that we call New York. Louis will have much more time on his hands to make a living, and help many other people this much more. He can now enjoy his life doing whatever he wants without the opressive thumb on his neck.
The banks typically have the same interest as everyone else to keeping the prices inflated. Until it all crumbles down and they get billions in federal blood money and everyone else gets kicked to the curb.
When you said 75,000 dollars a month, I was like "He must mean 7,500 a month." Then, I remembered that I live in NY too so I know he isn't lying lol! I am improving my skills so I can leave this burning money pit called New York.
Those numbers boggle my mind! I’m in rural AZ, and it’s hard for me to even envision what it would take to do enough business to cover just rent, let alone all the other soul sucking requirements imposed upon people in cities. The anxiety business renters must feel just trying to make overhead must be crushing. At this point I’m with Louis, let it flop and die an overdue death.
Not just the high rent, but the very high taxes. How do you even turn a profit? The amount of sales you need and having to charge a lot which can kill sales. It’s insane that there are any businesses. Just to break even, ouch!!!
.....RAISING PRICES AS WELL,OF COURSE,TO MAKE LIVING IN NY UNAFFORDABLE TO COMMON PEOPLE ........U KNOW.....ABOUT.......GUYS WHO BOUGHT NFT'S FOR ASTRONOMICAL PRICES,OFFICIALS WANT ONLY THOSE TO LIVE IN NY
When I was little I dreamed of moving to NYC as cultural hub. Art, theater, music, people from all walks if life. But, the Big Apple has become the rotten apple. There are always good and bad people but graft, corruption, and greed have just gotten completely out of hand. Sadly, even if they completely cleaned up, it is unlikely to get fixed in my lifetime.
Good news! NYC was a cultural and art hub because it was shitty and poor artists could afford cheap rents as they gentrified the hood.. maybe it will have a renaissance?? But don’t stand near the edge of the subway platform or you might end up pushed in front of the train 😢
I'm not sure if you've been around there, but as a fellow new Yorker, I grew up in Carroll gardens/cobble hill. It's one of the more expensive brooklyn areas and everytime I go back there, any shop that was new there last time has closed. Every single time they can't afford to be there for more than 3 months, only the ones who were there for like 20 years and pay less can stay open. There's also no houses, everyone has an apartment. And some go for 4k a month there easy.
Brooklyn native here. It seems like the plan is to upzone many areas of the city so that there are no more single family homes left. I moved to Queens and the same is happening here. Houses are being replaced with buildings…but there is no increase in infrastructure. No new schools, extra trash pickup, additional train service. So of course the quality of life for existing residents goes down, the homeowners leave, more apartments are built, and the cycle repeats.
In my city, any empty commercial property that’s sitting empty for a certain period will be fined by the city Now we have 0 empty spots on the main streets, literally 0
This is what happens when property is turned into an investment vehicle instead of a basic need and important resource for citizens and businesses to function.
"Seeking ways to entice employees to come in" Here is the answer. *Pay them* Seriously thats it. PAY THEM, and they will come there is nothing YOU OFFER other then payment that will entice them to spend 1-2 hours to come into work and another 1-2 hours to go home everyday. when they can just wake up and turn on their PC to log into work and never have to worry about transport and food.
@@TopShot501st Only places in Shanghai and Beijing are comparable, and they have effectively the same problem that NYC has, only on a much bigger scale
At this point, there's a strong argument to be had for nixing property tax. Much of what's wrong with property law is tied to trying to inflate the values of property in order to generate more revenue
"places are too old to attract renters and too new to demolish." so permits are too expensive to convert and upgrade buildings is what i hear. back in the day my dad would convert buildings to serve his purpose, until income was too low to give government its cut. most landlords would reneg on verbal agreements and ask for more once my dad sunk a lot of money fixing up the landlord's building. my dad would then leave when his lease was up and go to a cheaper place. landlords would not be able to fill that space because it is set up for my dad's business and some other person's business. most people in charge are incompetent, both in the private sector and in the public sector. heck you need a permit to change a light bulb in Oakland, CA (for a commercial property).
It seems kinda weird to me how they can just tell that they would rent it for some huge amount and it makes the value higher for some reason. Wouldn't any buyers look at how much it was rented and if it was vacant for a long time they would see that people don't think the building's value is as high as the rent would make it seem.
That depends on who the buyers are. If the buyer is a foreign real estate investor such as a Chinese company then no, they would not bother checking out something so basic as the vacancy rate. The more money you had flowing through the system the less scrutiny is being used to ensure the value of the investments. Every bubble can be traced to a point of excess capital.
I love how they like to jump to remote work being the issue too. They really want workers physically coming back to these overpriced business and retail space.
Love NYC. What I especially hate you touched on, rising rents kills interesting small businesses. Stores that reflect the local culture add to the richness of the city. It concerns me that rather than reform NYC will go to the fed and move the debt. That is a moral hazard.
It's the same in Sydney Australia. The councils that manage the towns within and outside Sydney would rather have empty retail space than charge normal rentals, so they are left vacant they become an eye sore and derelict. The other problem is tax in Australia the lust by state governments is endless and so is their inability to reign in spending.
I had an apartment building in Seattle in the 1990s. I could only get $10/sq ft for office space and $325/mo for apartments. It seems like I replaced every bathroom floor, subflooring, and floor joists.
The new mayor should make that part of his brand.. Considering the last one walked off with $830 some odd MILLION dollars totally unaccounted for.. money that was supposed to be used for the mentally ill and homeless.
We have some ghosts of a building in the dead center of St Petersburg, like the ancient one at the corner of the first line of Vasilevsky Island and Neva river. However the budget of the city has a surplus of $800Millions this year.
You are making a valid point , but I came to realize that real-estate is a complete racket. They are unwilling to lower their prices no matter the circumstances , because real-estate is at the core of the inflationary monetary system that we are governed by. I just watched Zeitgeist-Addendum and it explains this phenomenon with great details , and it is affecting us globally.
Hey Louis. I know you've spoken a lot about this topic before. Is there a specific video you can point me to that explains this Ponzi scheme you mentioned specifically?
He sort of explained it in this video, but essentially I believe the "value" of these buildings is calculated based on the potential rent that can be charged for that space. The property taxes that an owner has to pay is based on property value. So you have a bunch of buildings with these super high rent prices because they're necessary to justify the loan amount from when the building was purchased. If the rent is lowered, it lowers the value of the building. If you lower the value of the building, the bank or whoever loaned you the money to purchase that can call for you to pay the outstanding balance or provide collateral that equals the difference between the new value and the value at the time of purchase. So many of these property owners are keeping rents higher than anyone is going to pay because they don't want the value of the building lowered and to face the financial repercussions of that. This leads to many of the spaces have artificially high rent costs and thus remaining empty. As far as the state goes they get income via taxes based on the value of the properties, so if the value goes down, they'd get less income from taxes. With all the said, I'm not sure that calling it a ponzi scheme is really accurate since you're not really using new money you get to pay off old investors since I don't think a lot of these properties are actually being sold.
@@TheMattTrakker thanks bro. I'm actually not exactly sure what Ponzi scheme is supposed to mean lol I think I just heard him say it so I repeated it. But yeah that's messed up
If you can work from home why not? Everyone wins. Its not like a repair business that requires occupancy and presence. Let people choose whether they want to go or not.
" Everyone wins." Except for the commercial real estate owners and the city that depends on the tax revenue and the coffee shops and small retail that survived off of the foot traffic.
But muh EcOnOmY! Remote work bad because suit-person said so! Funny how a country that loves "freedom" and "choice" actively strips those things away and tells you to be grateful for what they haven't taken yet. (from a salty office engineer)
@@user-rn3rn6nl3h I'd argue there are quite a few options between working from home and never leaving the house. I've worked out of my house for decades, yet managed to visit six continents.
You went from crapple products to NYC property watch and I love it. What's going to happen is NYC is going to have to start over that's over 200 years of history erased.
You think that'll change anything? 4,000-ish years of human history showing this again and again would lead one to believe the problem is inherent in people.
@@TheMattTrakker nope just lazy minded people like you is inherently the problem that dont think for themselves and believe the propaganda that a cut throat system is not the problem "it's the people"
It's a situation playing out because the whole thing was unsustainable as huge cities have been obsolete for about decade. I also don't get the point of turning offices into apartments when the cost of rent for businesses will keep away the amenities that make living in a place worthwhile to begin with.
Louis, have you made a video that explains how landlords are paying their mortgage without getting rental income? Do they have a zero-payment loan that gets rolled over at the end of the term?
It is annoying how I have a hard-to-close popup warning by YT on this video. Hesh, makes it seem like Louis is spreading misinformation and needs a fact checker. Informative video, like usual. Great analysis of one of the downfalls of NYC.
The longer you're away from NYC, the more aggravated you're going to be about getting rooked into paying for their real estate on top of the crappy regulations, filth and lifestyle millions of people consider perfectly normal.
I live in one of those 9/11 421g abatement buildings in FiDi and there’s no way I could afford to live here if otherwise. I think those comercial to residential buildings make a big difference. Although I am expecting my rent to skyrocket to double it’s price after the abatement is over in 2023. You were looking for retail storefront, that’s quite a different market than comercial office space. My windows face an office building. Every single floor is empty. Only 50% have furniture, with 3-4 people.
In the UK they decided to tax vacant factories to force them back into use, I watched two very large factories torn down not because they weren't being used but because there was no way the small businessess using them could afford the new taxes. It would be a lot cheaper to not have any politicians just a simple set of rules.
You are awesome to talk about this. See NYC rent control that’s gone on for decades and is shit. Politicians including Rich ones like rent control because they can scam money other ways. I’m not naming names but history shows.
the citizens of NYC voted for this outcome for decades....voting dnc again and again and again and expecting a change is stupid, yet they did just that!
Yeah, you're right on the loan being called in. This is a symptom of over-leveraging. I would love for everyone in these property got their loans asked for... it would sink the property values and we can't have that.
Rent is too high, the policies are all terrible, and yet so many business and contractors are still able to not only operate, but PROSPER in New York. How is that?
My small apartment is state subsidized. My co payment is under $800 a month. That’s how I rent a place that’s an effective $3000 a month! I pity NY where people pay insane rent either for an an apartment or for commercial office space. Unless you make more than the average American, I have a difficult time understanding how anyone could afford to live there, much less than to run a small business. NY property valuation is worth more than its true value. It literally hurts to look at the eye popping prices while you struggle to figure out how you could even begin to pay for it! NY in 2022.
@@nickstone1167 How about people moving to somewhere they can afford? instead of the combination of the state and corporations? Maybe you are so young you do not understand, that prices are set by what people are willing to pay. If the government were not paying money to the corporation the prices will fall. The government giving corporations money is called fascism, socialism and facism are close cousins, the socialists don't want people to know that either. But that is why I don't like socialist or fascist, they are all deluded people that do not know much about anything, but preach their uneducated position to others.
@@Right-Is-Right Why do you assume he's not disabled or actually making an honest living? How are hard-working people who can't afford stupid rent prices leeching off others? You could've just asked him what his situation was instead of being a dick and judging him. C'mon dude, do you really think those charging the rent actually care about you? Good for you if you're in a spot in life where you can afford $3000 rent, but unless the guy is shooting up drugs and/or actually being a lazy leech, why is he your enemy?
This is my favorite real estate channel.
100%
He has 3M Subscribers. Mesured as commercial realestate.
@@merlin_V2 you mean 5 million ;)
Absolutely.. :)
Yes
I believe the amount work you put into these real estate videos is at least an order of magnitude greater than the work the authors put into writing the articles you review.
Thank you!
Which is to say, more than none. Those authors are almost certainly handed all the "facts" and asked nicely to help out by writing this article. By "asked nicely" I mean paid, and I'm not referring to their salaries.
Never forget that the majority of journalists are filth who put no time into their work.
I love the premise that business owners are looking for "amenities" beyond walls. That "author" has never left the shade of their parents' wealth.
I've watched my neighborhood shopping center go from almost entirely small/independent businesses and restaurants to almost entirely shuttered or turned into chains restaurants/big retail over the past 3 years. The single unifying factor is that their leases expired. It's really depressing to see the local atmosphere get priced out because big companies can afford to have an entire store be a loss leader just to keep their brand known.
Same in buffalo.
Sad but it’s just business. If someone gonna offer u more money. Most ppl gonna take it
But the almost free loans to the corporations from the fed have stopped, so the loss leaders will become stones on the corporations and there will be nothing in the malls. It was all a ponzy scheme to hide how bad the economy was.
@@takoflame4948 But an empty shop earns $0/sq ft. 🤷🏻♀.
@@takoflame4948 But this is happening nation wide at an alarming rate. How do we curb this kind of thing??
As a fellow NYC expat, I can appreciate everything you're saying here.
And I didn't even own a business. I just lived and worked there, back when you could make under $100,000 and still be able to afford a cardboard box in a neighborhood without a standing gang presence. But I could see the writing on the wall, and I'm glad you can too.
NYC as a center of human culture is an amazing place that has contributed incredible things to the world.
NYC as a municipality and a center of business is a circus of corruption, ineptitude, and fraud.
Maybe, someday, when it's done falling apart and is in some kind of rebuilding stage, it might be worth moving back to. Until then, not a chance.
That mirrors my experience. I was able to live in the city, fairly free of any major crime, and earned under $100k... and that was about 5 years ago. Now? I'd have to make at least $150k pre-tax to even consider moving back.
It's a symptom of investors controlling a business rather than an owner with skin in the game. This affects so many industries it has become the norm. Healthcare, manufacturing, entertainment, everything. In your case, Louis, you are a business owner with a passion for what his business exists to do. But if you were to bring in investors, enough to have leverage over how you run your business, then profit would become the sole motivator for that business. And that's the cancer NYC and others suffer from.
But it's obviously not profitable, so that logic makes no sense.
@@EssenceofPureFlavor It is profitable until it isn't, and when that change approaches you see the alert investors take profits by dumping their stock holdings. Stock value plummets as they sell, the employees get laid off to retain CEO/Board stock value if at all possible until they can find the escape hatch, the rest is liquidated to a new owner that recycles companies, and the cycle continues.
When the ship finally sinks, off to over seas properties and investments. They are not the ones who suffer. 😢
@@EssenceofPureFlavor its not about profit its about the quick ratio
this determines the liquidity of a business
the higher the quick ratio the better you are off
losing 300k a month on a building to maintain a 200 million building(these are just numbers) is quite worthwhile
when you can consider selling the building for 200 million
its an accounting trick if anything
@@michaelashby9654 Maybe I see this wrong, entirely possible, but I think that doesn't change anything. And this is because the idea of the paradox is that you want to 'buy into the game' regardless of the price of entry. And that 'buy in' is the stock market and investor process I am talking about. Without that influence business can grow or fail more organically.
And this applies to cities as well. NYC like many cities has invested, used public money, to attract big business and big developers. That's gambling, speculation, with public money. And now they are left holding the bag.
'Too big to fail'
More like
Too far to save
You cant save someone who doesnt want to be saved, and wont admit they are doing it wrong.
lol. Good good.
It's funny when Louis says he won't be paying for their failure once he leaves. Just wait until the city goes bankrupt and all tax payers have to pay for it.
@@androiduberalles If NYC goes belly up, you can bet any other american civilian is going to be paying for them to be rescued.
If the fed wouldnt rescue New York it would bring the rest of the US down with it.
I have always argued since the bailouts in 2008: "Too Big To Fail" means "Too Big to Exist". If it's that bad: declare it a monopoly and break it up.
Louis speaks facts!!! Im a 4th generation NYer n i got tired of this manipulation of a real estate market and moved out of necessity. Only way you’ll make it in NY currently is if you go there with money in the first place.
They learned from that other totally manipulated NYC market: the New York Stock Exchange.
=REPUBLICANS MUST'VE PUT IN CHARGE EVERYWHERE INCLUDING TRUMP
=TO FINALLY PURGE THAT SHITHOUSE THAT SHOWED IT'S REAL NATURE
with remote work, all the finance and tech jobs can be done from anywhere.
cities have become obsolete now. just like railways allowed us to live in midele of nowhere, fiber internet allows the 200k+ earners to live anywhere (taking associated jobs like fine dining, food delivery, maids, CPA, car dealers, etc with them)
Our 10 year lease is expiring in 2 years.... (Whole floor, prestigious midtown building) - when we have approached the owner about "negotiating" a new lease, to quote the classic, "negotiations were short". We asked for a small reduction, the answer was gtfo.
Sounds like a change of venue is needed for your company. May I recommend Texas or Florida?
“lEgAl ReAsOnS” 🤓
@@verios44 Let's see how many smart people out there? lol
Idk man. If lease was signed in 2012 at rock bottom price and yet asked for a reduction with so much inflation since 2012 in a highly wanted area. Then no wonder owner was offended
@@verios44 Florida has enough New Yorkers.
“Workers are seeking amenities to entice them to not work from home”
Reminds me of when the car manufacturers were all “why aren’t millennials buying cars? Do they need… more Bluetooth integration?”
Like dude there’s a fundamental issue here and it’s p. clear you don’t wanna face it.
It's two fold here...for many employers it's cheaper and for employees it's easier. As long as you have employees you trust and a business that allows for WFH, it makes sense for both sides.
@@TheMattTrakker And every real study indicates work from home is almost always less productive. The only make up is that people generally work at home slightly longer than at an office.
@@jw-hy5nq Paid for by people who believe office life has no distractions and that everyone is efficient and productive at all times while sitting in an office.
I’m a Millennial/GenZ and I’m inclined to buy low/tech vehicles from before 2010 because they are less able to spy on me. It’s actually funny how the better product comes in at a lower price.
Employers are seeking amenities to lure their employees back to the office.. I don't think the employees have direct influence over the landlord.
I think you nailed it here. These buildings are probably leveraged to the hilt and it's more beneficial to the owners to leave them fallow to avoid that "margin" call. Plus, they probably get some kind of tax break for "losses" incurred. Whatever, I left San Francisco before the pandemic after looking for a new place for nearly 5 years for the same reasons. Happily living in a low cost, low tax, freedom friendly place with 55 acres to play with. I'm going Monday to pick up my new tractor that I'm getting tax free because I've started a small hobby farm raising chickens/eggs that feeds my family and my neighbors while working 100% remote for my full time job.
Good for you. Although I have ask, are chickens a full time thing, or are they mostly self-sufficient? Chickens are so cute and apparently they actually love attention and are affectionate lol
Very nice! I'm doing my best to keep my small family farm going, despite the commute. I'm planning to switch to work from home in a couple years, get rid of the commute and refocus on the farm.
“Is angry about tax cuts for “big business, brags about tax cut for himself.”
Typical Californian lmao
When a trend becomes unsustainable it stops.
Telling a Politician to cut taxes is like telling a Herion addict to just quit.
they cut taxes for those rich friends all the time though
Only Democrats raise taxes for the poor
@@robertluong3024 associates, the wealthy have no friends.
Don't people wonder why 87k i.r.s. agents were recently hired and why they need to be armed??
I guess there's a whole lot of the 1% not paying taxes.. I bet..
If only the politicians had similar death rates...
I have an office building in the south suburbs of Chicago with real estate taxes that are 35% of the appraised value. It's 50% vacant - grosses $436k a year. The system is so broken I have to use lawyers to file vacancy protests every single year to battle escalations. Last year the county wanted $300k, we protested them down to $223k & I just got a notice from the county wanting $325k. Landlords are fighting losing battles in many Democratic run cities.
While it sucks to have the blight of vacant buildings fill up neighborhoods and taking them down in many ways, my thoughts are if these building owners want to leave their places vacant and still pay taxes on them, there isnt much anyone else can do about it. This is the cycle of economies where the people at the top get 99% of everything until something snaps.
There would be plenty of things to do about it, if all the politicians weren't so corrupt.
@@LilacMonarch America is a second/third-world nation acting like a rich one. Lmao only in poor countries do politicians openly commit fraud and corruption and get away with it. Except the average people in those nations have an excuse- most are military dictatorships. We don't do anything to these politicians- that's why they get away with open corruption. All we do is whine and expect someone else to fix the problem.
People still defend NYC.
It's mainly because the people who own the buildings don't want to admit that they aren't worth their stated value.
Guess they'll learn once no one rents spaces anymore. They aren't willing to budge, we shouldn't either.
I was there summer 2019. There were so many empty storefronts then. NOW its a ghost town. Its crazy!
Annabelle is right, NYC is becoming the emblem of a failing system
Equilibrium is going to fix it eventually. Recessions happen because economic conditions cause both private and public entities to build massive house of cards on short-term ideas and delusion of infinite growth Eventually the pendulum is going to reach it's max and NYC is going to suffer some....blowback from all the policies, hopefully sooner than later because the longer the problems foment, the harder the crash.
The same applies to many parts of the country, red and blue, big and small, private and public companies. We've gone through a ridiculous over decade long growth bubble and it actually started showing signs of cracking towards the end of 2019 but suddenly with COVID, the fed's printing of money actually helped duck tape temporarily.
We are at the end of an era. The entire system is based on silly assumptions. If we don't end up as shadows on the walls in weeks, we have 10-15 years of this business as usual. Vice has an article about a 72 research that predicts the end of our society "Western style". Looks like I cannot post the link
@Aung Ramen That brand is rot, decay, rat infested garbage in the streets, crime everywhere, cops nowhere and to top it off they have nearly extinct diseases making a comeback. Yeah, I think I would choose boring old Ohio.
@@MessyPointedBlob sadly the recovery can take time, lots of it. I don't think Japan has recovered completely from what has been called "the lost decade " , a real estate implosion of epic proportions.
Like almost every city/state ruled by Democrats.
Building owners of some 1950's and 1969's office buildings are converting them from commercial to residential. They're financing it privately, not with a public-private scheme (aka government subsidy) and that is why the units must be market rate.
Louis is right that this is already what was done with many buildings downtown in the Financial District.
NYC is just another example of modern art. Not particularly pretty or interesting, and nobody would want it in their home, but is rated at millions because speculative investments.
I was working for a major retailer and we were closing stores after the initial lease on properties was up as they wanted giant increases in rent , it’s all a giant scam, new leases are highly discounted then they jack the rates up
Louis. Thank you for the insights. I'm from Brooklyn and starting a private practice in psychotherapy and while all these figures may not line up to what applies to what I would need to rent, you've made me so informed of how to navigate the start of my business. God bless you and good luck in Tx!!!!!
I feel like WFH is win-win situation for most people:
- The workers: No commuting, less office distractions, can wear what you want, etc
- Businesses: No renting office space, no need to buy office equipment like computers, coffee machines, etc
- The environment: Less CO2 from commuting, less cars on the road, less land usage
Thank you, Louis. You’ve made NYC’s insane real estate market make sense to me. I never really understood it, but you’ve cleared up a lot of the bullshit. 😁👍🏻
The big question is how are the landlords not going bust? They are not making money on the rent... where is the money coming from?
A long time ago, NY was always called "the big apple" and the name was synonym to the city name. I just realized, that I havent heard that name for quite a while now, i wonder why. From your tellings, the city should now rather called "the foul apple" or "the rotten apple"
I think that "big apple" is also a slang term for horse shit, so maybe it still fits.
rotten apple is pretty accurate, because the city's obviously decaying and will eventually waste away
Donald trump brought new York to that status in the 80's, it was a failing state back then.
Hamguy bacon what the fuck are you talking about.
folks who do NOTHING for a living are LOSING? where does that leave those of us who do economically productive WORK for a living?
I love this. How appropriate is this that an ex new yorker sits in his easy chair in TX calling out the rape of the public that we call New York. Louis will have much more time on his hands to make a living, and help many other people this much more. He can now enjoy his life doing whatever he wants without the opressive thumb on his neck.
Fortune recently pointed out that if you can do your job remotely, chances are a person in another country such as India can do it more cheaply.
Sure but that would be even worse than a company not renting space.
And then there's no one to buy your cheaply made products
sounds like fear mongering, outsourcing predates this remote working
not that it's not true, but there's a lot of other factors
@@robertluong3024 sounds like an economic collapse. Watch as the mongrels run back to Europe
@@robertluong3024 not like this. There are no junior coding jobs anymore. All done in India or imported indians.
Something is only worth what you can get someone to pay for it, regardless of what you told the bank.
The banks typically have the same interest as everyone else to keeping the prices inflated. Until it all crumbles down and they get billions in federal blood money and everyone else gets kicked to the curb.
Shh, nobody tell the banks this...
banks are in on this. But a lot of them gon dissolve soon. Credit Suisse first to go.
@@nicholasvinen lol
When you said 75,000 dollars a month, I was like "He must mean 7,500 a month." Then, I remembered that I live in NY too so I know he isn't lying lol! I am improving my skills so I can leave this burning money pit called New York.
And probably vote for the same policies that did this to NY. Stay away, carpetbagger
London is pretty similar and Dublin
Those numbers boggle my mind! I’m in rural AZ, and it’s hard for me to even envision what it would take to do enough business to cover just rent, let alone all the other soul sucking requirements imposed upon people in cities. The anxiety business renters must feel just trying to make overhead must be crushing. At this point I’m with Louis, let it flop and die an overdue death.
Not just the high rent, but the very high taxes. How do you even turn a profit? The amount of sales you need and having to charge a lot which can kill sales. It’s insane that there are any businesses. Just to break even, ouch!!!
@@jbdragon3295 higher property taxes results in higher property values? Who could have ever seen for seen this
That is why you are in AZ. That is why I am in Tucson, AZ.
.....RAISING PRICES AS WELL,OF COURSE,TO MAKE LIVING IN NY UNAFFORDABLE TO COMMON PEOPLE
........U KNOW.....ABOUT.......GUYS WHO BOUGHT NFT'S FOR ASTRONOMICAL PRICES,OFFICIALS WANT ONLY THOSE TO LIVE IN NY
When I was little I dreamed of moving to NYC as cultural hub. Art, theater, music, people from all walks if life. But, the Big Apple has become the rotten apple. There are always good and bad people but graft, corruption, and greed have just gotten completely out of hand. Sadly, even if they completely cleaned up, it is unlikely to get fixed in my lifetime.
Good news! NYC was a cultural and art hub because it was shitty and poor artists could afford cheap rents as they gentrified the hood.. maybe it will have a renaissance?? But don’t stand near the edge of the subway platform or you might end up pushed in front of the train 😢
I'm not sure if you've been around there, but as a fellow new Yorker, I grew up in Carroll gardens/cobble hill. It's one of the more expensive brooklyn areas and everytime I go back there, any shop that was new there last time has closed. Every single time they can't afford to be there for more than 3 months, only the ones who were there for like 20 years and pay less can stay open. There's also no houses, everyone has an apartment. And some go for 4k a month there easy.
Brooklyn native here. It seems like the plan is to upzone many areas of the city so that there are no more single family homes left. I moved to Queens and the same is happening here. Houses are being replaced with buildings…but there is no increase in infrastructure. No new schools, extra trash pickup, additional train service. So of course the quality of life for existing residents goes down, the homeowners leave, more apartments are built, and the cycle repeats.
In my city, any empty commercial property that’s sitting empty for a certain period will be fined by the city
Now we have 0 empty spots on the main streets, literally 0
the poor poor nyc landlords 😢 please shed a tear for people who own multiple properties
You mean the out of country owners from China?
We need more people like Louis in this world!
This is what happens when property is turned into an investment vehicle instead of a basic need and important resource for citizens and businesses to function.
"Seeking ways to entice employees to come in"
Here is the answer.
*Pay them*
Seriously thats it.
PAY THEM, and they will come there is nothing YOU OFFER other then payment that will entice them to spend 1-2 hours to come into work and another 1-2 hours to go home everyday. when they can just wake up and turn on their PC to log into work and never have to worry about transport and food.
I'm not from NYC, nor from the USA. But those rent prices are absolutely mind boggling.
Anywhere else in the US they're mind boggling too...
@@TopShot501st
Only places in Shanghai and Beijing are comparable, and they have effectively the same problem that NYC has, only on a much bigger scale
@@Demopans5990 also chinas real estate market is a large bubble waiting to pop because its chinas consumers only vehicle for investment.
@@Demopans5990 Um, London and Paris prices are similar re: rent. Also, you forgot Hong Kong, which is also insanely expensive.
Same is happening in Los Angeles as well everything is closing down because no one can afford its anymore.
At this point, there's a strong argument to be had for nixing property tax. Much of what's wrong with property law is tied to trying to inflate the values of property in order to generate more revenue
"places are too old to attract renters and too new to demolish."
so permits are too expensive to convert and upgrade buildings is what i hear. back in the day my dad would convert buildings to serve his purpose, until income was too low to give government its cut. most landlords would reneg on verbal agreements and ask for more once my dad sunk a lot of money fixing up the landlord's building. my dad would then leave when his lease was up and go to a cheaper place. landlords would not be able to fill that space because it is set up for my dad's business and some other person's business. most people in charge are incompetent, both in the private sector and in the public sector. heck you need a permit to change a light bulb in Oakland, CA (for a commercial property).
Cities like Oakland and NYC deserve to fail if they're ran incompetently.
It seems kinda weird to me how they can just tell that they would rent it for some huge amount and it makes the value higher for some reason. Wouldn't any buyers look at how much it was rented and if it was vacant for a long time they would see that people don't think the building's value is as high as the rent would make it seem.
That would require logical though which seems to be in shortage in NY.
That depends on who the buyers are. If the buyer is a foreign real estate investor such as a Chinese company then no, they would not bother checking out something so basic as the vacancy rate. The more money you had flowing through the system the less scrutiny is being used to ensure the value of the investments. Every bubble can be traced to a point of excess capital.
I love how they like to jump to remote work being the issue too. They really want workers physically coming back to these overpriced business and retail space.
Love NYC. What I especially hate you touched on, rising rents kills interesting small businesses. Stores that reflect the local culture add to the richness of the city.
It concerns me that rather than reform NYC will go to the fed and move the debt. That is a moral hazard.
@Phillip Banes Pfft. You think those Muslims are fucking up this country? Nah, it's your very own owner class.
It's the same in Sydney Australia. The councils that manage the towns within and outside Sydney would rather have empty retail space than charge normal rentals, so they are left vacant they become an eye sore and derelict.
The other problem is tax in Australia the lust by state governments is endless and so is their inability to reign in spending.
We need to tax the shit out of empty buildings.
I had an apartment building in Seattle in the 1990s. I could only get $10/sq ft for office space and $325/mo for apartments. It seems like I replaced every bathroom floor, subflooring, and floor joists.
How can a owner afford to pay the taxes year after year with no tenant's?
1500$ a month is not a luxury appartment in new york?
.... gosh damn,
Thump-up for the video! Never have and never will steps into NYC.
I love watching these. I want to see the real estate bubbles blow up so badly.
Finally, this channel got back to its core mission. NYC Realestate. I make all my financial decisions based on Louis's outlook on life in NYC
Convert it to apartments. NY needs more living space.
NYC needs AFFORDABLE living space
@@VenomSnake420 Same with San Francisco and San Jose too. This is given that the hype surrounding the move to Austin came in to play.
I disagree, we should convert New York into a empty plot.
Yes, so more out of country people can buy it all up and leave it empty
The new mayor should make that part of his brand..
Considering the last one walked off with $830 some odd MILLION dollars totally unaccounted for.. money that was supposed to be used for the mentally ill and homeless.
That’s a damn shame. NYC is a wonderful city and I hope they fix it.
Thank you for telling the truth especially from the street point of view
Imagine how good a city like NYC could be without politician corruption or greed from bankers / property owners.
Owners would rather leave them
Empty cause it’s baked into the mortgage. Banks are sounding the alarm cus it benefits them.
these videos are so ruthless and always crack me up
Great video, Louis, as always. Typing from the laptop you saved! Forever appreciated. Wishing you all the best in Texas.
Reduce the state. Cut the government costs. Lower rental prices. Don't elect democrats. Problem solved.
"Government is the great fiction, through which everybody endeavors to live at the expense of everybody else." - Frederick Bastiat
We have some ghosts of a building in the dead center of St Petersburg, like the ancient one at the corner of the first line of Vasilevsky Island and Neva river. However the budget of the city has a surplus of $800Millions this year.
You are making a valid point , but I came to realize that real-estate is a complete racket. They are unwilling to lower their prices no matter the circumstances , because real-estate is at the core of the inflationary monetary system that we are governed by. I just watched Zeitgeist-Addendum and it explains this phenomenon with great details , and it is affecting us globally.
Line must go up. No down. Only up.
I learned so much about real estate through your experiences
Outside of Wallstreet and Broadway, NYC is a dying city. Wouldn't surprise me if it becomes Detroit 2.0 in 50 years
Hey Louis. I know you've spoken a lot about this topic before. Is there a specific video you can point me to that explains this Ponzi scheme you mentioned specifically?
He sort of explained it in this video, but essentially I believe the "value" of these buildings is calculated based on the potential rent that can be charged for that space. The property taxes that an owner has to pay is based on property value.
So you have a bunch of buildings with these super high rent prices because they're necessary to justify the loan amount from when the building was purchased. If the rent is lowered, it lowers the value of the building. If you lower the value of the building, the bank or whoever loaned you the money to purchase that can call for you to pay the outstanding balance or provide collateral that equals the difference between the new value and the value at the time of purchase.
So many of these property owners are keeping rents higher than anyone is going to pay because they don't want the value of the building lowered and to face the financial repercussions of that. This leads to many of the spaces have artificially high rent costs and thus remaining empty.
As far as the state goes they get income via taxes based on the value of the properties, so if the value goes down, they'd get less income from taxes.
With all the said, I'm not sure that calling it a ponzi scheme is really accurate since you're not really using new money you get to pay off old investors since I don't think a lot of these properties are actually being sold.
th-cam.com/video/NdfmMB1E_qk/w-d-xo.html
@@TheMattTrakker thanks bro.
I'm actually not exactly sure what Ponzi scheme is supposed to mean lol I think I just heard him say it so I repeated it.
But yeah that's messed up
@@rossmanngroup good man
@@akramrabaa943 bundling commercial loans
If you can work from home why not? Everyone wins.
Its not like a repair business that requires occupancy and presence.
Let people choose whether they want to go or not.
" Everyone wins."
Except for the commercial real estate owners and the city that depends on the tax revenue and the coffee shops and small retail that survived off of the foot traffic.
But muh EcOnOmY! Remote work bad because suit-person said so!
Funny how a country that loves "freedom" and "choice" actively strips those things away and tells you to be grateful for what they haven't taken yet. (from a salty office engineer)
People who sit in house all day are miserable. Look at the pandemic, people went to crap, suicides up, health down, child education and development.
@@user-rn3rn6nl3h that's why I said there should be a choice.
@@user-rn3rn6nl3h I'd argue there are quite a few options between working from home and never leaving the house. I've worked out of my house for decades, yet managed to visit six continents.
You went from crapple products to NYC property watch and I love it. What's going to happen is NYC is going to have to start over that's over 200 years of history erased.
The charged opinions on the day provide heat and pressure to refine character.
i very much loved your walks through New yorks showing the prices but also just seeing a bit of the city
We're doomed
the greed in this country is extremely revolting it wouldn't be a bad idea if we burned it all down and started over
You think that'll change anything? 4,000-ish years of human history showing this again and again would lead one to believe the problem is inherent in people.
@@renardfranse yup then its pretty much a giant reset for the whole world lol sadly we have idiots in control of the world
@@TheMattTrakker nope just lazy minded people like you is inherently the problem that dont think for themselves and believe the propaganda that a cut throat system is not the problem "it's the people"
It's a situation playing out because the whole thing was unsustainable as huge cities have been obsolete for about decade.
I also don't get the point of turning offices into apartments when the cost of rent for businesses will keep away the amenities that make living in a place worthwhile to begin with.
Louis, have you made a video that explains how landlords are paying their mortgage without getting rental income? Do they have a zero-payment loan that gets rolled over at the end of the term?
My favorite rocking couch philosopher.
Where does the city spend its budgets anyway? Streets are full of trash, subways are rotting, nothing seems to be improving
I have one word to support what you are saying. Detroit.
Im a firm believer in being in the office. Everyone who works from home fucks around and if I were paying them I’d want to keep an eye on em
Can't forget about anything else. Have to consider all other expenses. Like property tax
It is annoying how I have a hard-to-close popup warning by YT on this video. Hesh, makes it seem like Louis is spreading misinformation and needs a fact checker.
Informative video, like usual. Great analysis of one of the downfalls of NYC.
If it's a Covid warning I'm pretty sure YT just puts that on every video that has something Covid related in the title
@@driocku yea wich is fucking retarded
It just says covid related info lol
I didn’t get any warnings.
10-20k per month revenue PRE shut down.
"NYC is a business Grim Reaper" that is funny and sad all at the sametime.
Louis is as important to the Internet just like Project Farm is!
Two important assets that need protection!
just think the NY AG will take you to court for exaggerating their value but will take your taxes on inflated price.
The longer you're away from NYC, the more aggravated you're going to be about getting rooked into paying for their real estate on top of the crappy regulations, filth and lifestyle millions of people consider perfectly normal.
Some Mayors think that businesses will come back sooner or later no matter how poor the city infrastructure is and how bad the crime is.
No they don't, they just need to put that message out there because saying, "we're fked" isn't a very good campaign slogan.
I live in one of those 9/11 421g abatement buildings in FiDi and there’s no way I could afford to live here if otherwise. I think those comercial to residential buildings make a big difference. Although I am expecting my rent to skyrocket to double it’s price after the abatement is over in 2023.
You were looking for retail storefront, that’s quite a different market than comercial office space.
My windows face an office building. Every single floor is empty. Only 50% have furniture, with 3-4 people.
In the UK they decided to tax vacant factories to force them back into use, I watched two very large factories torn down not because they weren't being used but because there was no way the small businessess using them could afford the new taxes. It would be a lot cheaper to not have any politicians just a simple set of rules.
“Paddy’s dollars” comes to mind when explain the circumstances of converting office to apartments.
Soon there will be a "property dilemma" nationwide. Because nobody will be ever be able to afford any building.
They always say their "trying to adapt" to work from home but I don't see them doing anything except complain about change.
Sometimes you just have to walk away and let things die
You are awesome to talk about this.
See NYC rent control that’s gone on for decades and is shit. Politicians including Rich ones like rent control because they can scam money other ways. I’m not naming names but history shows.
the citizens of NYC voted for this outcome for decades....voting dnc again and again and again and expecting a change is stupid, yet they did just that!
Yeah, you're right on the loan being called in.
This is a symptom of over-leveraging. I would love for everyone in these property got their loans asked for... it would sink the property values and we can't have that.
Rent is too high, the policies are all terrible, and yet so many business and contractors are still able to not only operate, but PROSPER in New York.
How is that?
My small apartment is state subsidized. My co payment is under $800 a month. That’s how I rent a place that’s an effective $3000 a month! I pity NY where people pay insane rent either for an an apartment or for commercial office space. Unless you make more than the average American, I have a difficult time understanding how anyone could afford to live there, much less than to run a small business. NY property valuation is worth more than its true value. It literally hurts to look at the eye popping prices while you struggle to figure out how you could even begin to pay for it! NY in 2022.
Congratulations on being a taker, must feel great knowing you are using other peoples momey for your own rent.
Ah, sucking on the teet of the tax payer does have its benefits.
@@Right-Is-Right Guess paying extortionate prices should be considered a social good, right?
@@nickstone1167 How about people moving to somewhere they can afford? instead of the combination of the state and corporations?
Maybe you are so young you do not understand, that prices are set by what people are willing to pay. If the government were not paying money to the corporation the prices will fall.
The government giving corporations money is called fascism, socialism and facism are close cousins, the socialists don't want people to know that either. But that is why I don't like socialist or fascist, they are all deluded people that do not know much about anything, but preach their uneducated position to others.
@@Right-Is-Right Why do you assume he's not disabled or actually making an honest living? How are hard-working people who can't afford stupid rent prices leeching off others?
You could've just asked him what his situation was instead of being a dick and judging him. C'mon dude, do you really think those charging the rent actually care about you? Good for you if you're in a spot in life where you can afford $3000 rent, but unless the guy is shooting up drugs and/or actually being a lazy leech, why is he your enemy?