Wework Is A Big CRE Real Estate Crash Sign

It is a linchpin in the commercial real estate market in New York and other places around the country, and it is about to pull out. It is going to be very bad and it’s a great sign for us that are getting ready for this real estate crash and we have time to get ready for this real estate crash. These things take some time, but as you see them earlier, you get more prepared.

With that being said, if you want the real estate crash course, 80% off links are down below $199. Just so you know, after the first year, they were not going to be that much anymore. I’m doing things totally different when it comes to real estate instruction. All right, so here we go. This is out of CNBC. I’ve got two stories to share with you once. Office sharing company WeWork filed for chapter Eleven bankruptcy protection in New Jersey federal court Monday, saying that it had entered into agreements with the vast majority of its secured note holders.

Got to love that. There’s a lot of insecure people going, well, I’m not really secure right now. Yeah, you’re probably not going to get paid. And that it intended to trim non operational losses. The bankruptcy filing is limited to WeWork’s location in the US and Canada, the company said in a press release. WeWork reported total debts of $18. 65 billion against total assets of 15. 6 billion in initial filing.

So there is going to be some serious trimming. David Talley, the CEO of WeWork, said, I am deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and expedite this process through the restructuring support agreement. Isn’t that just nice? It’s a really nice way of saying you’re going to be screwed, I’m not going to be able to pay you. I made promises I couldn’t keep and the markets are tanking.

And that is true. There are fewer and fewer people needing these spaces. There’s fewer and fewer jobs out there. Even though the government tells you it’s okay, there’s lots of jobs. No, there’s less full time work. There’s more part time work and those are just skewing numbers, quite frankly. WeWork has suffered one of the most spectacular corporate collapses in recent US history over the past few years, valued in 2019 at 47 billion in a round led by Mashioti’s son, SoftBank Sons SoftBank.

The company tried and failed to go public five years ago. The COVID pandemic caused further pain. We all know that. All right, let’s dive into this story. And this is where it gets really meaty, really exciting for those of us that want to crush in real estate. Bankrupt WeWork, this is out of zero hedge could accelerate the commercial real estate crisis as it prepares to dump 40 New York City office tower leases.

Now, why should this affect you if you don’t live in New York? Well, this is why New York is a financial hub of the country, right? Similar to California. When these big hubs, these big economies break down, then that shutters economic velocity and it affects the rest of the country. All right, try and keep it real simple. When a bank gets hit in one state, doesn’t mean it’s going to keep lending money in other states.

All right, Manhattan’s largest private office lessee WeWork, this is Manhattan’s largest private lessee WeWork has collapsed into bankruptcy. Court papers indicate plans to abandon dozens of office lease agreements across the metropolitan area, which might worsen the commercial real estate crisis. Let me stop there and explain something. Commercial mortgage backed securities are going to be hit by this. It is going to make the paper cheaper, less expensive, less valuable, less desirable as a massive conglomerate or company.

Sorry, like WeWork pulls out of Manhattan’s office buildings. You have to realize, as those commercial mortgage backed securities get hit, it’s going to send more and more ripples through the country’s commercial mortgage backed industry. Let’s think China. China started with Evergrande, right? Evergrande. That was in June, or, sorry, September of 2021, if my memory serves me right. That gave way to other companies like Country Garden. So as one company goes under and starts pulling its money back, selling assets for less than face value, right, more and more companies get hit.

Okay, this is going to be a big, massive blow to the commercial mortgage backed security industry, it says. According to Bloomberg, dormant locations in New York dominate a list of nearly 70 leases the co working giant intends to terminate. These are from court papers. The roughly 40 contracts at issue include Space near Union Square in Fulton Center, a retail and transit facility in downtown Manhattan, says core papers also said the leases are limited to no benefit to the company and are primarily dormant spaces, buildings vacated by WeWork might ripple through an already weakened CRE market because the coworking startup is an anchor tenant for numerous buildings that account for about $2.

6 billion in CMBs debt, with about half of those loans reaching maturity in the next twelve months. According to real estate news website Commercial observer, already 80% of those landlords are on special servicing watch list. To give you an idea of special servicing watch list, this is a whole different office or a different desk, if you will, set up for banks to keep an eye on distressed landlords.

I’m actually working on new lessons for some courses right now on how to identify these distressed landlords, distressed property owners, so that you can work out deals with them before they go fully to the bank. It’s so easy to identify what’s going on in the world, but very few people understand what to do with that kind of information. So many people say, I got a gut feeling that real estate’s turning down.

I got a gut feeling things aren’t going to stay like this forever, but they don’t know how to take the actionable steps to actually do something about it. And that’s what’s important for people to understand. It says here WeWorks collapse, accompanied by the termination of dozens of leases, is poised to cause even more strain for building owners grappling with the tightest borrowing conditions in years. It actually should read decades.

As of June 2022, the company rented nearly 20 million space across the US. And what’s happening in New York City is coming to a city near you. I cannot agree with that more. Just because this story is about the massive pullback out of New York City or Manhattan, you have to understand that WeWork has been renting offices all around the country and they’re going to take their worst performers, the ones that are not being used, and they’re going to get rid of those leases under bankruptcy protection.

They’re just going to say, we’re terminating the lease and they have the right to do that. The courts are going to let them do that. And there are going to be a lot of commercial property owners that are set up as bag holders and they’re going to be holding the bag because the second they walk away from that lease, they are not going to be able to rent it to someone else, especially for the prices that they’d been renting it to WeWork for.

Weeks ago, Scott Renschglear, chairman and CEO of RXR Realty, warned that the CRE crisis was just getting started. I’m just kidding. No, as of Google letting me know when I ranked number one in this topic, I was the first person online to ever talk about the commercial real estate crisis that’s coming. And that was in June of 2020. And the reason why I say that, it’s not because I’m some brainiac, but it was just logical.

It made sense when you close down the economy and there’s that big supply chain shock and part of that supply chain shock is available tenants for your commercial properties. And as the market turns down and goes negative in GDP, you’re going to see more and more businesses closing. There are so many businesses closing around the country, it’s insane. But this is where it affects everyone. Sure, you may not own a commercial property.

You may not own a business that needs a commercial property. This is where it’s going to affect you. The amount of debt that has been accumulated through the commercial mortgage backed securities process is so massive. The losses that are going to hit are going to hit people’s pension funds, it’s going to hit stock market and it is going to turn down all kinds of other things. And what happens is those ripple effects then affect other asset classes, primarily mortgage backed securities.

Why? Because as loan companies, financial institutions are taking massive losses on their commercial portfolio, their loan portfolio, they start to look at the other loans that they make and they go, you know what we need to do? Risk mitigation. And so we need to now pull back or get very serious about who we give money to. This is a normal cycle. This exact same cycle played out from 2008 to 2012.

And if you’re not ready, you don’t have your credit score set up and you don’t have the right amount of money or the ability to, the understanding of who to talk to and when you are not going to be taking part of this real estate crash. That’s what I teach people. I want people to be ready for this. And there’s very easy, actionable steps that you can be making right now.

As a matter of fact, if you don’t do it right now, you may very well find yourself in the crowd of the rest of the people that aren’t ready. That’s why I put those discount links down below. I told myself I was going to give one year of teaching this course at rock bottom prices before it goes up with another offer because I wanted this in the hands of the many and only so many people take advantage of it.

So if you guys want it, it’s down below. But check this out. It says here, almost exactly two years after going public via SPAC we work. The struggling co working startup that once held a valuation of as high as 47 billion filed for chapter eleven bankruptcy in New Jersey federal court Monday, having, as Wolf Richter reports, spent its entire life burning huge amounts of cash raised from investors.

A total of 13. 8 billion raised in 22 rounds, much of it from SoftBank and SoftBank’s Vision Fund. See, it’s not just investors that are getting hit, it’s the banks as well. So you’re going to see more and more ripple effects coming out, says in a press release, the company said it struck a restructuring support agreement with creditors to drastically reduce the company’s existing funded debt and expedite the restructuring process.

I want people to understand, if you’re invested in this company, this isn’t investment advice, just know this. You haven’t even seen the official press release that we are in recession and that means a big contraction in all kinds of things, not only spending, but in employment. And the Federal Reserve wants unemployment much higher than it is right now before it starts lowering rates so before it pivots. So investing in companies like this that make money from people having work may not be the best choice.

That’s not financial advice. That’s just my thinking. And it makes me sick every time I hear the CEOs that ran these companies into the ground that weren’t that bright to even see what was coming tell things like this, and this is from the CEO, now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet. Like you’re failing, dude.

Like why don’t you say we screwed up? We screwed up bad. We couldn’t figure it out ahead of time. We couldn’t see the cycles. In recent months, WeWork provided numerous signals of its imminent demise. First was in August when it stated in a ten quarterly filing, ten Q filing, that substantial doubt exists about the company’s ability to continue as a going concern as the company hemorrhaged cash and liquidity was running thin.

Tolley said in September that the company would seek to negotiate terms with our landlords. As part of these negotiations, we expect to exit unfit and underperforming locations and reinvest in our strongest assets as we continually improve our product. I think you’re going to see a lot more in the future for WeWork as far as losing money. It may make it through this round of negotiations for restructuring, but I think you’re going to see another during the recession, the US recession, and it’s going to be a big one.

You’re going to see another round of layoffs, another round of closures, bankruptcy. Look, my point being is that this commercial mortgage backed securities industry is imploding. It has deep, deep legs. Its hands are stretched out wide, and it’s all over our lending industry. It’s going to affect a lot of lenders. And so a lot of lenders are going to stop lending. And the question is, are you going to be able to walk into the lender and they’re going to lend to you? That’s the name of the game.

And then having the guts, the Cajones, to pick up real estate at a very special, very special time point where real estate is falling and interest rates are falling. And I know it sounds crazy, but that’s not when a lot of people are buying. I’ve lived it. I lived it in 2001. I hope you got something. Up 80% off. Links are down below 199 for the real estate crash course.

If the links are gone, that means the course, the sale is over. Hope you have a great day. The economic ninja is out. Bye. .