"We Track the Financial Collapse For You, so You'll Thrive and Profit, In Spite of It... "

Fortunes will soon be made (and saved). Subscribe for free now. Get our vital, dispatches on gold, silver and sound-money delivered to your email inbox daily.

This field is for validation purposes and should be left unchanged.

Safeguard your financial future. Get our crucial, daily updates.

"We Track the Financial Collapse For You,
so You'll Thrive and Profit, In Spite of It... "

Fortunes will soon be made (and saved). Subscribe for free now. Get our vital, dispatches on gold, silver and sound-money delivered to your email inbox daily.

This field is for validation purposes and should be left unchanged.

That’s a Lot of Empty Space

The local video store is closing, and the other day I wandered in to pay our remaining late fees (eight bucks for a single video that spent a week under the couch). I was the only customer, so the guy at the desk had time to tell me about his store’s demise. Turns out that this isn’t just a single under-performing store folding, but the whole company, Movie Gallery, closing all 1,900 of its Hollywood Video and Movie Gallery stores. I said something like, “Man, that’s a lot of empty commercial space,” and he said he’s heard that the liquidator in charge of this wind-down is negotiating with Blockbuster, the biggest video chain, for the same services. So we’re talking thousands of mostly prime-location storefronts.

But big as it is, the evaporation of bricks and mortar video rental could be passed off as run-of-the-mill creative destruction, as better technologies drive DVDs off the field. As such, it’s not a reliable indicator of commercial real estate in general, and not really blog-post worthy.

Then this came from a friend in Washington State:

I’ve been watching all of the empty commercial real estate around the development where I work. It is pretty sad and some of these places have been empty for 2-3 years! Most of the smaller single units all went under in the last year or so. I took a quick ride around today with a camera and I thought I’d share!

ALL properties pictured are right in here, maybe a square mile? The location is right off 405 in North Bothell at the Canyon Park exit. I’ve been there for a few years and seen some of these empty for 2-3 years. The former Icos building had been empty the entire time but recently someone finally moved in there but I don’t see many cars in the parking lot so they must be small. No pictures of that one. Here is as detailed a rundown as I can give on the attached PDF file with the pictures:

Pic 1 was vacated by DHL when they went under. It has been empty ever since.

Pic 2 is the former Safeco building

Pic 3 unknown, empty as long as I’ve been there

Pic 4 details unknown empty a long time

Pic 5 a HUGE long ass building maybe 100 yards long, possibly subdivided but ALL empty

He sent many, many more pictures, but these five give a sense of what that office park — and many other office parks — must be like. Local and regional banks are on the hook for most of the loans associated with these empty buildings and those losses will be huge when they’re finally recognized.

30 thoughts on "That’s a Lot of Empty Space"

  1. Hang onto your hat, ’cause we aint seen nothin’ yet! The whole of North America is going down. Wait until all the dole runs out and people finally figure out Obama isn’t going to pay their mortgage or fill their gas tank. There will yet be blood in the streets. Our traditional enemies are watching like vultures as we gasp our last breaths.

  2. Canyon Park (seattle area) is a prime location for commercial space in the north Seattle Metro area. The buildings in queston lie about one mile off one of the main interstates in the area. While not the same as downtown Seattle or downtown Bellevue, this has traditionally been a nice place to draw workers from everywhere north and south along major freeways.

    Just yesterday I was at Crossroads Mall, by all accounts one of the more successfully planned out non-mega malls in the area (Redmond/Bellevue). There are loads of retail spaces available there. along the way there is still another suburban shopping center that has long since failed, with the major anchor grocery store empty for years now.

    I hesitate to guess how many empty condo buildings still exist, and recently a trip into Seattle along the South Lake Union area (with huge invetment from the likes of Paul Allen) showed they were STILL building condos with ground floor retail space — who is going to fill ANY of this stuff?

    I personally know of several people who havebeen caught “upside down” on spec homes, or 2nd homes they bought but did not get out of in time. These are eating up axcess cash even when rented, as the rental rates barely cover the “operating expenses” of these properties.

    The Seattle region is still relatively healthy compared to places like Las Vegas. Yet we all know these stories are being repeated all over the US. Until the losses are taken, and the debts are written down, there will never be a recovery.

  3. Peter,

    I think a “good news” site could “work”/be-popular if it’s presented properly, i.e., not polly-annaish. I’ve long thought the better term and concept is the EMPloyment rate (not UNemployment rate), and if similar such metrics lead to better (i.e., more “level headed”) investment decisions then it could catch on.

    I also agree that the internet CAN be used to focus in on particular points of view and thus give a distorted perspective. For example, money is still flowing in the real estate industry concurrent with price deflation and foreclosures, so things seem okay superficially, but screwed up in actuality. RE agents, lawyers, etc. are making 10-12% on short sales (thus making the same as when prices were 50% higher and commissions were 5-6%), the banks make about 5% on every mortgage refi at the get go, etc. The government housing subsidation boondoggle simply raised prices enough to pay one’s closing costs, etc. Ditto for lawyers who like to sue courtesy of the Obama administration’s policies. Sick s_ _ t, if you know what I mean. Not sustainable but keeping lipstick on the pig.

    So, I’m not necessarily suggesting that things are better than is portrayed in a fundamental way, or will continue to be better than what websites like this one portends. I’m simply saying that things aren’t that bad at the moment and most people have no idea what’s going on. Ignorance can be blissful, but only until reality force feeds one a heaping helping of awareness. I used to be like that. I trusted that financial professionals and money managers understood economics and the economy and were aware of the goings on, so I could be free to focus on other things. Then I learned the expensive way how woefully uneducated and unaware the vast majority really are. Most people still don’t get it, and I’m afraid the unfolding financial crises will impoverish even more people and even more so this time around. I fully expect the STHTF, and sooner rather than later, that is going to knock the socks off of most people. I’ll spare you the details, but basically I see a global social meltdown and depression occurring versus “just” a global financial meltdown that could have occurred in 2008, or a financial recession that could have occurred in 2000 – the result of kicking the proverbial can down the road, until it hits a wall.

  4. I don’t know the percentage, but maybe 10-25% of the industrial space in America may have been dedicated to warehouses, with a large fraction devoted to storing books, DVDs, and music, in transit, and all of this is disappearing due to Kindle and iPad, and is being replaced by fiber optic communications, cell towers, and downloads. So the rents on industrial space might see deflationary pressures for a generation – 20 years – at least, until all this excess space is either absorbed by light manufacturing, or burned to the ground by the owners who are taking a bath on the property taxes.

  5. @ Bruce C
    “For reasons like these there seems to be a huge disconnect between what I think is brewing and what most people are expecting/experiencing (i.e., economic rebound). The reality at the moment here in SFL is basically pretty good so far. We shall see how it unfolds.”

    Exactly my experience here in UK……….

    Bruce continues [my edit]:
    “There just isn’t much change in behavior: restaurants are still full, concerts at [GBP200 – Glastonbury was exactly this price] a head sell out, plenty of new cars around, etc. As far as I’m concerned, when 20-nothing technobrats are walking around with iphones, it’s not what I would call a recession – not even close”

    All the same here…so what’s going on? Is it that we can now have a ‘global perspective’ via the internet, highlighting specific local negatives, which disconnect us from aggregate reality? Is 10% unemployment (US) drastic when 90% of the workforce are ’employed’ (we trust productively)? Maybe if statistics measured ‘positives’ rather than ‘negs’ we would perceive a wonderfully different world? – “GREAT NEWS 98% of all mortgage holders (in UK) are paying their bills on time and are not going to face a NOD – ever!”

    We are all just so happy over here!!! Yep there definitely is a disconnect somewhere. The power elite rely on the fear factor to manipulate the sheeple and rob them blind, perhaps one way to defeat this deception is to have a Good News Website? BUT – is Good News sellable/readable news?

  6. The business model of corporate America has collapsed. CEO salaries and bonuses are unsustainable. On top of that you have a second wave hitting the housing bust and commercial real estate in freefall with no end in sight. BP oil spill in the Gulf of Mexico is an add-on disaster.

    Its about time we dismantle Congress and the FED!

  7. Thrash,

    It’s all relative. I mean several things by that. First of all, yes, tourism is less compared to say 2 years ago, but maybe only by 20% or so – which isn’t what I would call a disaster. As far as fewer snowbirds visiting – maybe – because most of them are buying “cheap” real estate instead to avoid annual lodging costs. Canadians, in particular, are buying homes in golfing communities based upon relative price drops (about 50%) and the relative strength of the Canadian dollar. (Personally I think the RE will continue to drop, but if one pays cash they’ll still own it free and clear.) Similarly for international investors – at least before the Euro tanked.

    I’m not saying everything is rosy, it’s just not that bad. Seriously, if I were oblivious to “the news” I doubt I’d even say we’re in a recession. It feels more like after the ‘87 stock drop when “wealthy” investors took a haircut and postponed big-ticket purchases for a year or so. There just isn’t much change in behavior: restaurants are still full, concerts at $300 a head sell out, plenty of new cars around, etc. As far as I’m concerned, when 20-nothing technobrats are walking around with iphones, it’s not what I would call a recession – not even close.

  8. How do we keep out money?

    Buy junk silver coins. Buy ETFs that go up when the stock market goes down.

    Bet against the United States. The Democrats are acting like Democrats; the Republicans are acting like neuterd paper pussycats.

  9. Hey Bruce C.,

    As purely an outsider, I’d be concerned about any softness in tourism, snowbirds/retirees relocating to South Florida and/or softness among international investors.

    Retail is driven by psychology and employment. The short and longer term visitors, with cash and plastic in their pockets drive psychology and employment.

    That’s my outside looking in view of it.

    All the best,

  10. Doohdah,
    Why wouldn’t the police show up for work? They are organized, they have guns and if it is your word against theirs who do you think wins? They are in the best position to feast on the carcass as it sinks into the tarpit. Sure, they will go down – but they (and their families) will go down last. Look for the police to be the biggest thugs of all.

  11. I don’t doubt the anecdotes from J. R.’s friend in Washington, nor those from of other readers, but I have to say that here in South Florida I see somewhat the opposite. The single most commercial construction around is that for big-box stores like Pep-Boys, Office Depot, PetSmart, etc.

    I read a few articles about 6 months ago talking about an impending wave of commercial real estate and the needed de-leveraging and reduction of excessive “big box stores” and office space. Made sense to me, but at that same time I remember talking to most of the architectural firms I (used to) work with, and they reported that essentially their only work was for “big box stores”. They didn’t understand it either, but they liked having it. Subsequently, a noticeable amount of such construction projects have begun and are well underway. I still don’t get it in light of all I read and blogs like this one. For some reason, South Florida does not seem to be suffering from this recession or whatever you want to call it, and never has. I don’t mean to mitigate any one else’s experience, but residential and large commercial construction seems to be the only sector that’s depressed.

    A friend of mine recently hired an “over qualified” recent college grad for a basic administrative job, and she soon found a better position after that.

    For reasons like these there seems to be a huge disconnect between what I think is brewing and what most people are expecting/experiencing (i.e., economic rebound). The reality at the moment here in SFL is basically pretty good so far. We shall see how it unfolds.

  12. empty? not for long.
    squatters. they’re here!
    and who is going to make
    them leave? over and over?

  13. Another scary thing is that there is a lot more retail that is going to go away. Just think about how much retail space is taken up by books, CDs, DVDs, and software. As all that moves digital (itunes, netflix etc), you could see 50% of the shelves in Best Buy, 100% of the shelves in Boarders, and 25% of the shelves in Wal-mart and Target empty. The would mean closing and consolidating many big-box stores.

  14. see “P R C ‘s stocks -50% from hi, some houses
    -25% in price, one new city is empty.”
    Will global banks etc write down r.e., sell it, carry as
    Real estate Owned? at old value?

    1. , Perfetto. Ora il qrduao è completo. Il mio riferimento era su Unicredit in quanto è assolutamente matematico e lampante l’incrocio tra nuova emissione e LTRO. Poi per il resto è ovvio: la BCE gioca a fare la FED con stile “border line”. insomma, con degli escamotage, fa quello che da statuto non potrebbe fare.

  15. Until the Federal Government stops lording over us as if we were serfs and begins fearing US citizens, there will be tyranny or as Obama likes to say, “Spread the wealth around.”

    I agree with Tom. Be sure to have plenty o’ bullets for when the veneer of civility tears away and police stop showing up for work.

  16. This is the bust that follows the artificial, credit fueled created by central bank (the US Fed being the worst offender) manipulating interest rates. Remember the problem is the _preceeding boom_.

  17. It’s a similar story here in Brisbane Australia. (Pop 1.5M). I travel in Industrial and Commercial areas all day every day and I can’t believe the number of “For Lease/Sale” signs I see. Some of the sites are so large they would only suit a large corporation and appear to have been vacant for some time with many of them displaying a number of different agents signs. Some of the less attractive areas have streets of industrial showrooms with more than half of them empty. And all of this in a country that is reported to be doing OK in a global sense.

  18. @Sam Simon,

    First, you presume to speak for everyone by the use of “we.” Second, if you want to censor someone, try your scroll button. Third, I clearly wasn’t responding to you.

    All the best,

  19. Interesting. I live in a coastal town somewhere north of LA that is/was one of the 3 “wealthiest” locales in the US. Empty foreclosures with weeds growing in yards all over (formerly) upper middle-class neighborhoods; commercial vacancy rate, even in chi-chi downtown Main St. looks to be at least 40%, with formerly high-priced space now (not) moving @ 75 cents/sq ft. Barky’s “summer of recovery” looks like a death-spiral. And it’s all good: the sort of thing that will lead to Regime Change; true, the body count will be quite high along the way, but this country is grossly over-populated.

  20. Buy gold, silver, beans, bullets, and bullets, plenty o’ bullets.
    If you stay in the U.S.A., you’d better be prepared eventually
    for a fight.

  21. It would be interesting to see what these building would be used for if we had a free market and the banks were forced to liquidate. I would be willing to pay a dollar for the building if there were no other bidders.

  22. Actually, I wonder how all this empty space will be used. You can only have just so many dollar stores. Consignment shops will probably be big.

  23. Well quite obviously we need to expand the welfare state by creating a new bailout program for bankers holding the paper on commercial real estate.

    While we’re at it toss a pittance to the owners of CRE so it looks like we’re compassionate. Doesn’t matter if the debtors actually remain in their properties. It’s perception that matters, stupid.

    That was sarcasm. The following is satire:

    Dateline Washington; Announcer: Hey Otis, As you know gubbment has exhausted it’s ability to pick on Gays, Jews & Blacks. Even the pot smokers lobby is making it near impossible to jail them. In response, Larry Sunshine, the President’s corporate welfare chief is proposing that we lease all available vacant CRE space, convert it to jails and outlaw unemployment.

    That’s right Otis, everybody who doesn’t have the valid new work card, which includes the name of your current employer is subject to imprisonment for a term of not less than six months.

    A police spokesman said, “It’s no big deal for us. After checking for wants and warrants we make another call to the employer to confirm the suspect is in fact, currently employed. Big whoop”

    Republicans leaders oppose the bill. Spokesman John Bonehead said, “This will never pass without an exemption for the leisure class.”

    Back to you, Otis.

    All the best,

  24. Thank you for sharing John!

    Question to you how could the common people who read your books and view web site make money from what you are sharing.


    1. Hey Sam,

      The very short answer is to bet against the people in charge and the financial system in general. Our problems are too serious to fix, so Bernanke, Frank, Dodd and the rest will fail and be discredited no matter what they do. Fiat currencies will die, and governments will have to live within their means. So real money like gold and silver will be in demand, and most stocks (except for the miners) will be great short candidates. Betting against the market isn’t something most people are comfortable with, but it’s the right side to be on for the next few years. Your broker probably has a tutorial on shorting, so start there and come back with questions. Good luck!


Leave a Reply

Your email address will not be published. Required fields are marked *

Zero Fees Gold IRA

Contact Us

Send Us Your Video Links

Send us a message.
We value your feedback,
questions and advice.

Cut through the clutter and mainstream media noise. Get free, concise dispatches on vital news, videos and opinions. Delivered to Your email inbox daily. You’ll never miss a critical story, guaranteed.

This field is for validation purposes and should be left unchanged.