Shark Tank star and The Corcoran Group Founder Barbara Corcoran says Class A buildings in major cities like New York may be in trouble. Corcoran says that she sees "maybe 50 percent of the space occupied" in Manhattan and "in most major cities it's 20 percent."
Corcoran tells Yahoo Finance's Seana Smith that "everyone who's saying there's not a problem there is not being truthful. We have problems looming."
Corcoran sat down with Smith to discuss her views on commercial real estate, residential real estate, first-time homebuyers, home renovations, and more.
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Video Transcript
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- I wouldn't call it dire, but it's in trouble. Of course, the class A buildings have the biggest problems of all because all those tenants aren't using their spaces. When I go to Midtown Manhattan, I see maybe 50% of the space occupied, and in most major cities, it's 20%.
You can't keep that up. You can't pay your banker. You can't pay off the loan if your tenants aren't occupying the spaces. So everyone who's saying there's not a problem there is not being truthful. We have problems looming.
So the class B buildings have smaller office plates, and they have more window space, so they can be converted to co-ops. Nobody's done them yet, but I can't imagine that not going to happen. The cities don't stand in the way of that. They want to see the redevelopment. But the class A buildings of 25 years ago on Park and Fifth Avenue, the best buildings in town, they have a problem.
They really have a problem because they can't convert to any kind of a loft space because they have huge plates. They don't have the window space. You have to have windows to convert to residential. I don't know what's going to happen with them.
Commercial isn't just office space, which everyone thinks of it as. I think the industrial sector is booming right now, and you can't get in cheap, but you can make a lot of money. Retail space, you get in cheap, and you can make a lot of money. And multifamily housing is doing so well. So I would say those three areas versus the office market is a great place to buy right now.
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