Cracking the office market code?- Episode 169

Investing with GoodLife | Real Estate News, Investing Tips, & Current Events

In this episode Rohan and David discuss these topics

Introduction:

- Rohan introduces the episode (169) and mentions the remote setup with Chester and David. David shares his enjoyment of the fall weather in New York.

1. Recent Developments in Real Estate
   1. Discussion on the recent rate cut and its impact on market sentiment. David notes increased enthusiasm in real estate circles following the rate cut, despite not seeing immediate deals.
2. Inflation Metrics
   1. David explains the difference between the Personal Consumption Expenditures Price Index (PCE) and the Consumer Price Index (CPI). The latest PCE report shows a slight decrease in inflation, which may provide the Fed with more flexibility in rate adjustments.
3. Housing Market Predictions
   1. The California Association of Realtors forecasts an increase in home sales and prices in 2025, anticipating a rebound in the market due to lower rates.
4. Office Market Challenges
   1. David discusses the difficulties in the office market and highlights some successful strategies employed by newly developed buildings with rich amenities. He shares examples of high-demand office spaces in Manhattan and New Jersey.
5. Conference Insights
   1. Rohan shares insights from a Goldman Conference, emphasizing the belief among attendees that the office market will recover, akin to trends seen in retail post-Great Financial Crisis (GFC).
6. Conversion of Office Spaces
   1. The conversation shifts to the challenge of converting older office buildings to residential spaces, noting that only a small percentage are viable for such changes.
7. Chrysler Building Drama
   1. David shares news about the Chrysler Building's ownership and ongoing legal disputes related to unpaid rent and lease negotiations, spotlighting the unique situation with Cooper Union as the landowner.
8. Asset Class Success
   1. Rohan and David discuss the booming data center market in Red Oak, Texas, highlighting recent developments and expansions by companies like Compass Data Center and Google, indicating a strong trend in this asset class.
9. Real Estate Market Insights
   1. Miami Real Estate Bubble: A UBS report highlights Miami as the top city at risk for a real estate bubble due to a 50% price increase since 2019. Tokyo and Zurich follow closely.
   2. Migration Trends: Conversations suggest that many people are considering relocating from California (especially LA) to Miami. Wealthy individuals are more likely to move to Miami, while those building wealth might prefer Texas.
   3. Office Market Outlook: David shares observations from a conference at Rockefeller Center, noting significant renovations and a high occupancy rate of 93%. However, Tishman Speyer is seeking a $3.5 billion loan, which could indicate future confidence in the Manhattan office market.
10. Office Space Evolution
    1. Changing Needs: There's a shift in how people view office space; the demand for multi-functional spaces (work, gym, collaboration) is growing.
    2. Rockefeller Center's Role: The center is a significant cultural hub, housing popular shows like *The Tonight Show*, adding to its allure.Housing Market Predictions
11. Goldman Sachs Report: A forecast suggests that in five years, housing will become more affordable despite continued price appreciation. The historical growth rate of housing prices is expected to stabilize at 5-5.5%.
12. Entertainment Recommendations
    1. Recent Shows and Movies: Rohan discusses watching *Nobody Wants This* with Kristen Bell and Adam Brody, while David enjoyed *Glass Onion: A Knives Out Mystery*, highlighting its clever twists and engaging cast.
13. Dining Experiences
    1. David's Dining: He had a pleasant experience at a Thai restaurant called Little Chef Mama, sh