[ 3 / biz / cgl / ck / diy / fa / ic / jp / lit / sci / vr / vt ] [ index / top / reports ] [ become a patron ] [ status ]
2023-11: Warosu is now out of extended maintenance.

/biz/ - Business & Finance


View post   

File: 1.24 MB, 1125x1125, The-Cheesecake-Factory-COVID-19-No-Rent-April-2020.png [View same] [iqdb] [saucenao] [google]
19818044 No.19818044 [Reply] [Original]

Can somebody with a wiser business sense than me explain why businesses that are closed due to COVID are still forced by commercial real estate to pay rent?

I've read that a huge percentage of US businesses corporate and small won't be coming back from the quarantine, but I don't understand why.

If the economy is essentially frozen and business owners literally cannot do business, wouldn't it be mutually beneficial to all parties involved if business insurance companies and landlords forgave monthly rent prices and fees until they could open again and continue their income?

Doesn't business real estate want to KEEP their store owners?

Pic related, it's the famous letter from Cheesecake Factory to a landlord announcing they won't be paying rent.

>> No.19818101
File: 37 KB, 233x217, 5DF9E517-FC99-4163-AB79-7ECDA203DE2A.png [View same] [iqdb] [saucenao] [google]
19818101

>>19818044
NOOOOOOO YOU CANT JUST KICK PEOPLE OUT FOR NOT PAYING RENT ITS NOT FAIR

>> No.19818128

The vast majority of those landlords don’t even own their property. They have tons of massive loans. They need to keep collecting rents to pay their mortgages.

>> No.19818151

Because their still utilizing and leasing the space. Doesn't matter what the government does as the mortgage, bills and taxes don't stop for the landlord.

>> No.19818207

>>19818044
>to a landlord
to all their landlords
I'd evict them just for impersonality.
>>19818128
this.
its a question of how far down the road you can kick the can. Landlord forgives tenant, does bank then forgive him mortgage? etc. Commercial tenants can usually bre thrown out on a whim - its not their own personal roof after all - but theres no point when there is little chance of a paying successor. Everyone (tenants, landlords, banks) just needs to be sensible. Until its time to get greedy again .
>>19818151
most (when not all) bills be on the tenants

>> No.19818267

yeah doesn't make sense, the next bubble pop gonna be epic, fuck the traditional financial system go all in on btc, eth and shitcoins and watch it burn

>> No.19818297

>can't pay their rent
That's the point Then the banks foreclose and make a profit

>> No.19818379
File: 10 KB, 128x128, 1588208853819.gif [View same] [iqdb] [saucenao] [google]
19818379

>>19818044
Because the mortgages held by the landlords (who are almost guaranteed to be holding those in mortgages, because the vast majority of independent investors, REITS, and other parties hold those assets with debt) need to be serviced, and what makes you think those landlords had the foresight to hold cash reserves in the event that something like this happened?

>muh forbearance
read the fine print. It's A) only for federally-backed loans and B) have no clause regarding remedies for the massive months-long cash flow hole that was left, leaving it up to lenders to decide whether they want to forgive or go after the mortgagor for the loss, which can (and very likely will, in the majority of cases) trickle down to renters.

Renting a building and subsequently not paying that rent for several months doesn't happen in a bubble, jackass.

>> No.19818530

If they were smart like McDonald’s they would buy their property and not have to pay rent to anyone

>> No.19818557
File: 96 KB, 822x544, Ron_Pocolypse.jpg [View same] [iqdb] [saucenao] [google]
19818557

>>19818044
>wouldn't it be mutually beneficial to all parties involved if business insurance companies and landlords forgave monthly rent prices and fees until they could open again and continue their income?

No, because everyone is bankrupt now. The economy isn't "frozen" or "paused" like a video game, its shattered into trillions of pieces a.k.a. its over. Like doom paul over. Anyone who know is already out of the exits and pulling out of the parking lot.

>> No.19818684
File: 15 KB, 500x333, 77c0aa6a8e65f12f37052b6b51ab9e6c.jpg [View same] [iqdb] [saucenao] [google]
19818684

>>19818379
OP here,

God damn that sounds good but I literally didn't understand half of what you said. Like I said, I have little business sense when it comes to mortgages, investors, and REITS? lol

If you would be so kind to repeat your post but spoken to a 10 year old, that would be nice.

>> No.19818941

Kicking out formerly rent paying customers does seem utterly pointless when you consider that the space will lie empty for probably longer, as no new wave of potential tenants will be waiting in the sidelines. It's obvious to me that some middle ground ought to be struck. A heavily discounted lease rate / agreement that rents can be owed in arrears, that sort of action.
I would be disinclined to boot a business out of a premise in the hope I find a replacement. That is surely going to make matters worse for me in the long term. Just my thoughts.

>> No.19819050

>economy is essentially frozen

That's simply not true. Just because a bunch of elitist governors order everything to close doesn't mean everything stops.

>>19818941

Property values are so massively overpriced in summer cities that it's actually cheaper for the landlord to sit on an empty building than lose hundreds of thousands to millions in market value by lowering the cost of the rent

>> No.19819063

The landlords are balls deep on loans. Its a shifty situation all around. Most corp tenants are deferring rent

>> No.19819185

>>19818128
>>19818207

What service does a landlord provide again? Its not property management. That can be done by a property manager. The role of a landlord is assumption of risk. If we are saying landlords should not be at risk of loosing rent payments, what the fuck exactly is the point of having landlords? This constant bailing out of people who take on excessive risk then don't want to accept the consequences when things go wrong has lead to a massive leech class of rich inheritors who demand risk free return so they can live high without ever having to contribute anything. And society largely obliges them for some reason, continually bailing them out anytime anything goes wrong. But the lower and middle classes have absolutely no leeway, or at best a minuscule token of support like a $1200 unwanted gib.

>> No.19819245

>>19819185
And this.

>> No.19819264

>if I take a loan and put it all on black then the ball lands red why should I have to pay back the loan?

>> No.19819283

>>19819185
based. remember most of our politicians are landlords. nancy pelosi’s income is majority property. they write the rules to steal our money.