I just hope something can be done with the empty structures. Turning them into housing is easier said than done for many buildings.
this post was submitted on 09 Feb 2024
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It's easier said than done, but it's not that difficult. It's mostly reconfiguration of plumbing and zone controls on HVAC. The electrical is easier to distribute.
If you commit to doing it the right way, and tear it down to the structure (but leave the facade alone), it's not terribly difficult.
The problem is that the building owners want to do it cheap, and it won't be cheap. It will be more economical in the long run than fully vacant building though.
Iirc one of the biggest challenges was plumbing right? Especially for tall buildings.
This is a good post, but I'm not sure it belongs in technology. Hmm.
The connection is mostly that tech companies have been wanting people back to offices for years now, so it kind of made sense to place this also in tech. But I know what you mean.
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I'm a union commercial electrician where I spent a decade building and improving tenant spaces in commercial towers in Seattle and Bellevue. There's a huge dip in our work now that there aren't high rises being occupied. I'd like people to work from home, but my blue collar job can't be done from home. If we can change what these buildings are used for I wouldn't be worried.
Google here in Fremont area on the other hand is expanding their space by occupying a larger foot print with a smaller work force per square foot. That's a good way to keep us working.
I don’t know anything about being an electrician - commercial or otherwise, so I’m curious to hear your side.
When all those people go to working remote, it’s not like they’re no longer in need of electricity. Presumably their home demand is higher and we might even see people adding new office spaces to adapt their home. Maybe the public grid needs to change to support it? Won’t this mean that there will just be a different type of demand for electricians?
Are there reasons this would be less attractive to electricians? Pay, job security, or something else?
There are many different types of electrical workers. I'm a commercial inside wireman. I'm licensed to install electrical infrastructure and maintain electrical infrastructure in commercial and industrial complexes. I have a wide range of work I can do, but to put it simply I only have a job if: Complexes are being built (I'm doing construction) Complexes are being used (this is mostly industrial since commercial spaces have building engineers that mostly took over our maintaince work).
People working from home eliminate both my outlets of work. Residential electricians make significantly less than I do, and their work is pretty similar but dedicated to homes. But even their work would be cut because if we're talking office employees making an office at home, there's not much if anything required of any electrician for someone to set up a computer and a desk in their home. The grid will be using much less power due to drop in facilities.
But it's not just my job as an electrician. It's construction in the city as a whole and even the city economy. Because outside of the residential district in cities, people working from home in the suburbs aren't utilizing the city infrastructure and commercial goods.
Fremont in Seattle has a large presence with many employees. The tech here tries to stay very competitive so Google was providing their employees with beautiful breakfast and lunch amenities. This created such a blow to Fremonts local restaurants that Seattle had to implement a special tax for serving food in your complex. Basically food cannot be free.
This is but one industry being impacted with employees no longer having a presence in the city high rises they're employed at. Construction slowing or being fully eliminated will remove our presence in the city, majority of tradesmen. Tech will invest less because employees will take care of their own facilities by working from home. Now the economy takes a hit, we don't have work in the city, restaurants don't have customers, and the jobs of the office workers are suddenly finding themselves not needed as much either. Now residential high rises in the city are being vacated. The towers are losing employees and residents. The city stagnants. Economy crashes.
Of course this is pretty dramatic, and very generalized. But people working from home effects A LOT including a few steps down, their own careers.
Oh no.
Anyway.
This is the best summary I could come up with:
Employees sent to work from home at the start of the pandemic have not fully returned, a situation that, combined with high interest rates, is wiping out value in a major class of commercial real estate.
The past week brought a taste of the brewing problems when New York Community Bank’s stock plunged after the lender disclosed unexpected losses on real estate loans tied to both office and apartment buildings.
When a string of banks failed last spring — partly because of rising interest rates that had reduced the value of their assets — analysts fretted that commercial real estate could trigger a wider set of problems.
In other cases, banks are using short-term extensions rather than taking over struggling buildings or renewing now-unworkable leases — hoping that interest rates will come down, which would help lift property values, and that workers will return.
The value of bank assets has taken a beating amid higher Fed rates, Mr. Piskorski and Ms. Jiang found in their paper, which means that mounting commercial real estate losses could leave many institutions in bad shape.
“Commercial real estate is an area that we’ve long been aware could create financial stability risks or losses in the banking system, and this is something that requires careful supervisory attention,” Treasury Secretary Janet L. Yellen said during congressional testimony this week.
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