Brookfield Corp., one of the largest public real estate companies in the world, has defaulted on $161.4 million worth of office building mortgages, according to a reportfrom Bloomberg, as high office vacancy and interest rate hikes have contributed to a string of defaults this year and fueled concerns of a commercial real estate debt crisis.
I started going back in the office two days a week maybe 2 months ago because of “encouragement”. While I was looking forward to it I find its not what my memory thought it was. Part of the problem is I have a “flex desk”. It’s not always mine (even though I seem to keep getting the same flex desk each day). So anything I need I need to lug with me. I’ve done without an external keyboard and mouse when I go in and frankly I do not like that, but I’m not going to lug it either. (that is an ergonomic issue for me due to a fused neck, so for me this is a problem). But I also have to lug my paper notebook, pencil. And anything else I might need that I normally have at home.
But I just had a 1:1 session with a co-worker, face to face in a conference room with a giant screen and a whiteboard. And that session really was better in-person than virtual.
I’m torn. Fortunately my commute is under 5 miles and is 15 minutes in traffic. But at this point, with small exceptions, I’m leaning to stay at home. And frankly, I was not expecting to feel this way.
I have a friend at Google now and they are supposed to be in office at least 2 days per week. He lives south, office is downtown. So that drive is not exactly fun for him. He does not look forward to office day. Pretty sure Apple and Arm are requiring at least some in-office time as well. Nvidia is still at the “encouraged” stage for now.
I’m going to say we’ll know by end-of-year if commercial real estate will be ok or will turn into a disaster. But I’m not buying any REIT’s before then.
I’m down to one real estate investment: medical properties. While tele-health will make some inroads, it’s hard to see doctor’s offices, clinics, medical office buildings, long term care facilities and the like being severely impacted. Even more, with baby boomers marching desperately into old age, I expect “health” to prosper in its many forms.