Why Is This Post Office So Big?
Real estate in Manhattan is not cheap. In fact, I might be as bold to suggest that Manhattan real estate is rather pricy. My apartment, which is a 500 sq ft studio in Hell’s Kitchen, costs $2300 a month to rent. Ok, so its not cheap.
Take this thought, put it in your satchel, and come for a walk with me along 9th and 10th avenues in Manhattan. Amidst the rabble of homeless people, and cavalcades of wide-eyed tourists, you might have spotted this massive concrete aberration at 33rd and 9th.
No, its not a sports-stadium. Its not an airport. Its the size of a city block, so what could it be?
A post office.
But wait, just across the street from Nero’s Postal Palace,we find:
Another postal building!
And these aren’t small Duane Reader sized outlets,each of these buildings covers an entire Manhattan block. Not to mention another huge facility which sits at 12th Avenue and 26th Street.
Ok, I am going to put some of those McKinsey skills to work here and back of the envelope how much money the Federal Government could receive in commercial leases if they “moved” these buildings elsewhere:
Google Earth tells me that these buildings in total cover 1,000,000 square feet of land. If you could build a 20-story tower on this land, that would introduce 20,000,000 sq. feet of office space.
If we assume that being in Midtown West, one could conceivably convert this into commercial Class A real-estate, which might be worth $50 per sq ft per month.
Thats $12 billion per year in potential lease revenue!
You could buy some B-2 bombers with that shit kid.
Hold on a second, that’s a lot of money, and this is only the United States Postal Service.
Let’s not kid ourselves , shipping and sorting post cards is not quite the same thing as assembling a Saturn V rocket. (which I’m sure could be done inside this building at 28th:
Now, I might be playing armchair-Postmaster General, but I think its odd that we have an army of people (~600,000), with an empire of real estate that does nothing more than fill our boxes with Victoria Secret catalogues and Capital One credit cards.
The last time I got something in the mail that actually meant something, its return address was from the North Pole. How about you?
What else is the USPS sitting on?
I just opened up the USPS balance sheet from last year: (http://www.usps.com/financials/_pdf/usps2010annual-report.pdf) (over/under on the total number of times that link has ever been clicked? i’d say 3 tops)
Yup, the USPS is sitting on $20 billion of buildings,equipment and land.
Naturally, since it is a government organization, the USPS never fails to disappoint when it comes to destroying value. In 2010, the USPS translated these assets into a Excite@Home-esque $3 billion loss.
With only 5 weeks till the Federal Government defaults:
Here we have the USPS sitting on at least $20 billion in assets. The weirdest part about this whole thing is that its the USPS! It ain’t exactly Social Security. I’m sure the only other budgetary line item that a constituent would ax before the USPS would contain the initials IRS.
So what’s my point?
The government should shut down the USPS, liquidate its entire asset base, and used it to pay down our deficits. True, we would probably still be heading towards financial collapse, but on the bright side, at least Capital One won’t be bothering us then.