As a longtime newsletter writer, I’ve probably received as many out of office auto-replies as anyone on the internet. During the pandemic, those OOO replies lost their meaning as we were all out of the office. One of the lasting impacts of the pandemic is that many people still haven’t gone back, and you being out of the office means office building owners are running out of time when it comes to dwindling rent and increasing debt. “The creeping rot inside commercial real estate is like a dark seam running through the global economy. Even as stock markets rally and investors are hopeful that the fastest interest-rate increases in a generation will ebb, the trouble in property is set to play out for years. After a long buying binge fueled by cheap debt, owners and lenders are grappling with changes in how and where people work, shop and live in the wake of the pandemic. At the same time, higher interest rates are making it more expensive to buy or refinance buildings. A tipping point is coming.” Bloomberg (Gift Article): The World’s Empty Office Buildings Have Become a Debt Time Bomb.

+ WaPo (Gift Article): Workers want to stay remote, prompting an office real estate crisis. “If office and retail owners are having trouble generating rental income because people just aren’t going into the office and shopping, then it increases the odds that they aren’t going to be able to pay back those loans in timely way. That means losses will start to mount on those loans. And because the banking and financial system more broadly is already struggling with lots of other problems … there’s going to be more banking failures.” (In addition to the financial issues and all the struggling small businesses, it’s also just a major bummer being in empty-ish downtowns.)

+ The stay at home trend is hurting cities in a big way. Due in part to political messaging and the places where most members of the national media live, we’ve heard a lot about the doom loops in major coastal cities. But the trend is even more crushing in cities where things weren’t going all that well, even before the pandemic. Middle America’s doom loop. A look at which cities are effectively managing this shift vs those who aren’t is a reminder that politics is about more than parties and flame wars; actual leadership makes a difference.

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