Excellent explanation of what we see happening and are wondering what the goal is. You’ve had very good insights into the shifting sand our financial house has been built on. Looks like the day of reckoning is approaching. Praying Trump and DOGE can get it stabilized 🙏
The US Federal government leases a lot of office space. The reduction in personnel should allow them to leave a bunch of those leased spaces--even with the directive for government employees to return to government offices. Until recently, at least, my experience with DHS was that its leased spaces were nearly empty (a floor of a building that had a couple hundred cubes would typically have 20 or so people working on any given day--the 4-5 senior executives in their offices and another 10-15 drones in cubicles).
Would be great to offload these assets if we own them or cancel the leases if we don’t. The downstream problem will be that the commercial office space is still wrecked by the covid WFH exodus, so there is not a strong market to sell into. Either way, just taking maintenance costs off the books would likely be a big win.
Interesting that federal employees were told they must come back to the office at about the same time they were offered a generous retirement package option.
This is a really nice helpful way to think of things, I like it. Thanks
I've seen others mention that Trump 2.0 is doing zero based budgeting to Fed Gov, but tying that into bankruptcy workout is new and insightful
Excellent explanation of what we see happening and are wondering what the goal is. You’ve had very good insights into the shifting sand our financial house has been built on. Looks like the day of reckoning is approaching. Praying Trump and DOGE can get it stabilized 🙏
BTW I updated my post on tariffs - https://ombreolivier.substack.com/p/ackshuallllly-tariffs-may-work?r=7yrqz - to link to this because I think the two posts complement each other
This was great. Thanks for sharing.
The US Federal government leases a lot of office space. The reduction in personnel should allow them to leave a bunch of those leased spaces--even with the directive for government employees to return to government offices. Until recently, at least, my experience with DHS was that its leased spaces were nearly empty (a floor of a building that had a couple hundred cubes would typically have 20 or so people working on any given day--the 4-5 senior executives in their offices and another 10-15 drones in cubicles).
Would be great to offload these assets if we own them or cancel the leases if we don’t. The downstream problem will be that the commercial office space is still wrecked by the covid WFH exodus, so there is not a strong market to sell into. Either way, just taking maintenance costs off the books would likely be a big win.
Sounds like an opportunity for a Blackrock/Blackstone deal...
Interesting that federal employees were told they must come back to the office at about the same time they were offered a generous retirement package option.
Carrot and stick for sure.