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by mrep
2157 days ago
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Got a source to back up that claim? Detroit for example has seen inflation adjusted commercial office space prices massively drop: "Adjusted for inflation, the average office tenant paid a peak price of $34.34 per square foot during the fourth quarter of 2000, 65.5 percent more than the current average rate of $20.76, according to Newmark Knight Frank data. It's almost as deeply pronounced for Class A space — which has the best amenities and finishes. Today's Class A rental rate is $24.36 per square foot, but in the third quarter of 2001, tenants paid inflation-adjusted rent of $38.12 per square foot, 56.5 percent more than now" [0]. [0]: https://www.crainsdetroit.com/article/20170730/news/635141/d... |
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And a NYTimes article similarly, "The Empty Storefronts of New York" https://archive.is/JnhDS
Basically rents are too high, so businesses won't rent because it won't be profitable. In 2018 when the NYT article was written, "about 20 percent of all retail space in Manhattan is currently vacant, compared with roughly 7 percent in 2016."
So maybe this is bimodal: you have "rich" areas like Manhattan and SF and Seattle, where rents stay high even with low occupancy (landlords sitting on empty properties and enjoying the free ride of increasing asset prices), and you have "poor" cities like Detroit, where no one wants it and you can't even give it away ("free" property still comes with liabilities like taxes and maintenance).