New York has solved this by keeping the offices valued at the same price but just letting them sit empty.

I remember there being some weird financial thing causing that as offering low rental prices could trigger loan conditions

When commercial loans are renewed (and they are because commercial loans are usually rolled over and not paid off, ie interest only) things like the occupancy rate, rent cost, creditworthiness of lessees and other things are factored into the new loan terms. So if the rental rate is lower then interest will be higher on the loan. Or the loan provider will okay a smaller portion of the loan requiring you to cough up the difference.

Example a $10m building, you put $1m down on. You go to refinance the loan and they are only willing to float you $7m now because you arent able to charge as much rent to tenants. Thus requiring you to come up with $2m or lose your $1m investment and the building.

That was it :) creating an incentive to not rent out space at all. Probably even worse now with the high fed rate

Sometimes there are tax incentives to this.

And the homeless population keeps going up.

>What a very odd article to come from a think tank, it's titled and reads like something from the NY Post.

Do you actually reason about the world this way? Kinda odd.

I have the advantage of having standards for the quality and candor things I read. :)

Sure if it is opinion.

But what about things that are factual? If they don't fit your standards do you discard them?

Something being true is the bare minimum and has little bearing on what should be done from there.

Example: It was a fact that Germany was left in an impossible political and economic situation after WWI, and it was a fact that the leftist government at the time accepted the agreements that led to that impossible situation. But simply saying that leaves out context about who was truly to blame, something that a young war veteran took advantage of in short order. So to avoid being tricked by people telling easy truths, it’s important to be critical of all sources of truths, especially ones with an ideological bent. And during that process it is acceptable to discard partial truths in favor of a search for the complete story.

There are so few public market transactions for commercial buildings that each one is an important data point. An auction as well so there are no backend side deals that would make the value uncertain. This is a good data point.

I think the title and other conjecture in the article turned me off, but this makes complete sense! I also saw elsewhere in the thread that SF Bay REITs are performing about this poorly.