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Yeah, agreed. Las Vegas is going to get badly damaged economically by all of this. Orlando and Miami less so, but those too, sadly.
I go on skyscraperpage.com occasionally, and you can what's being built and proposed for all the major cities in the world, and I see Las Vegas has 4 hotel proposals, and I'm doubtful now that any of them will either get completed, or broken ground for.
At the Palazzo on the Strip, during the last Recession, they started construction on a big hotel/condo project adjacent to the Palazzo, and it was mothballed in 2009, and just recently they re-started construction for some 5-star hotel, and I'm guessing that will be mothballed once again.
I'm just praying that World Resorts finishes their project on the north side of the Strip.
I go on skyscraperpage.com occasionally, and you can what's being built and proposed for all the major cities in the world, and I see Las Vegas has 4 hotel proposals, and I'm doubtful now that any of them will either get completed, or broken ground for.
At the Palazzo on the Strip, during the last Recession, they started construction on a big hotel/condo project adjacent to the Palazzo, and it was mothballed in 2009, and just recently they re-started construction for some 5-star hotel, and I'm guessing that will be mothballed once again.
I'm just praying that World Resorts finishes their project on the north side of the Strip.
I think projects under way already, construction wise, or those projects that have approved loans, will mostly already go full steam ahead.
I think in some cities where they have "cease all construction" orders, that's temporary and will begin again.
Where I think projects are going to be just crushed/stalled/tabled or cancelled, will be those in the proposed or approved for construction stage, without financing and loans from banks already wrapped up and finished.
For example, I'll use some Memphis current projects in development--
*Union Row, a $1.3 billion or so+ new development
-demolition of all existing blighted buildings is almost completely done
-phase I and II already have construction loans in place, from what I have read
-construction was slated to start in late 2020
-I think this definitely still gets built. The III and IV phases might be delayed, but the first phases are built
*Pinch District, a $1.1 billion+ new development
-in approval and planning stage
-developer has done smaller multi million dollar new and redevelopment projects in town, but this is first huge development
-this contains spec office space, hotels and residential, 6 or 8 high rises of 15-20 stories
-has been approved by city and zoning (from my understanding, mostly anyway)
-I don't think loans/financing have been finalized
-this project will most likely be tabled or reconfigured or downsized
A "loan in place" means very little, speaking as a general contractor for that sort of work. If it's six months from breaking ground, the design is half done, they don't have a firm idea on price, don't have all their permits (new requirements can trigger further design changes and costs, as well as delays), don't have the loan terms worked out, and haven't fully analyzed the market. The real rigor comes at the end when the developer and lenders decide whether to jump in or not.
There are many reasons to be optimistic. For example lenders often like real estate as a safe haven in uncertain times. Prices might be cheap as every later of contractor and supplier cuts their margins. Interest rates are low. Leasibility might not matter (for apartments or hotels at least) for two years.
On the other hand, hotel operators, retailers, most office tenants, condo buyers, and project developers/equity/lenders will tend to wait to see how the economy will do first. Anyone who wants to do anything quickly will probably have to take on more of the risk, like more equity and lower loan-to-value.
I'm wondering about big-ticket stuff...do office tenants decide to rethink their space requirements, with 5-10% reductions in square footage through more hoteling and working from home?
New York easily, but Manhattan specificall. people are gonna be moving outta there for a decade. Business too
And it could be a drop that continues even after the recession.
Most fast-growing areas have been in either the Sun Belt or Pacific Northwest, with Nashville, Las Vegas, Boise and Denver being notable exceptions (although the former two border the Sun Belt and have parts of their metro areas fully within it). Not saying Vegas or Nashville will continue growing though - I fully expect them both to take hard hits and go into a bust cycle (especially after the Nashville Supercell) - but rather than it could speed up the migration from the non-Pacific north even more.
Plus, NYC is prone to hurricanes, which will get worse and worse over time unless something is done about climate change. Although it's more influenced by the Labrador Current in winter and spring, the Gulf Stream does have some impact in summer and autumn, which is when most hurricanes form. And it'll probably be flooded out eventually even if we can cool the planet, as the Greenland Ice Sheet is probably past the point of potential salvation now.
So while I do agree with the statements that tourism cities like Vegas and much of Florida will be hard hit, and still stand by my statement that Nashville likely will be too, you have a point about NYC. I've expanded on that as I think such a decline may well be permanent after the recession for other reasons.
On the other hand, maybe Memphis could go from bust to boom if Nashville does the opposite. Both have been in their respective cycles for quite some time, and Nashville's traffic and Cost of Living Index are rising more and more (suburbs actually are worse than Nashville-Davidson and Murfreesboro) while Memphis has a CoLI that makes even smaller cheap urban areas like Yuma, Roanoke, Cookeville and Johnson City look expensive; not overly confident but stating that Memphis COULD have potential to recover from this quite well if many trends flip (also they're solidly within the Sun Belt and safe from hurricanes). Also, I expect Dallas/Fort Worth to be quite fine, as they're economically diverse, diverse in terms of minorities, solidly in the Sun Belt while being safe from hurricanes and with a CoLI that's near the national average despite being the U.S.'s fourth largest metro area.
No one knows what will happen, possibly all cities could suffer and then if that does happen it could be the same percentage decline per city across the board. Or everything, after this has passed, will be be a boon for all. Things change by the day. Fear mongering doesn’t help anyone or anything.
No one knows what will happen, possibly all cities could suffer and then if that does happen it could be the same percentage decline per city across the board. Or everything, after this has passed, will be be a boon for all. Things change by the day. Fear mongering doesn’t help anyone or anything.
True. Fear mongering has led to this crisis in the first place. However, I seriously doubt things will be even between all areas - that's just not how things work.
I do agree however that things change by the day. I have a point about that above, projecting that Nashville and Memphis could possibly switch places as they've both already been in boom and bust cycles respectively for quite some time and been drastically altered by it.
New York easily, but Manhattan specificall. people are gonna be moving outta there for a decade. Business too
New York will take a hit, but I think it will bounce back quicker than people think.
But, out of the 4 largest Northeast cities (New York, Philadelphia, DC, Boston), I see the other 3 faring better than New York. DC is the government and Boston and Philadelphia aren't as hard hit (right now), and they have booming healthcare and life science industries.
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