Is it the government's job to hold the proverbial hot potato in events like this?
U.S. retailers plan to stop paying rent to offset virus closures
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Re: U.S. retailers plan to stop paying rent to offset virus closures
#12Is it the government's job to hold the proverbial hot potato in events like this?
Requires Congress to act, as they have fiscal policy authority (versus the monetary policy authority granted to the Federal Reserve).
If neither are assisting, you have to play hardball yourself. Banks and commercial REITs have more to lose right now than retail tenants, hence why those businesses are firing the first shot and putting their offer to landlords on the table. “Pray I don’t alter the deal further”
This does not work for residential leases.
Re: U.S. retailers plan to stop paying rent to offset virus closures
#13“The court system is just going to get flooded with a million of these disputes between tenants and landlords,”
I'm absolutely not a big fan of collectivism, but sometimes, individualism just doesn't work. Sometimes, you have to step in and solve problems collectively. No, it won't be fair, yes it will be one-size-fits-all, no you can't please everyone. Suck it up, buttercup.
Whether you like it or not, we're in this current shit together, all of us.
Re: U.S. retailers plan to stop paying rent to offset virus closures
#14Corporations should keep paying to entities who don't have as much wealth as them. For some people who aren't extraordinarily rich, it maybe their only source of income.
You realize that the retail business can be quite difficult and that a monthlong shuttering can and will drive many into bankruptcy. Rent payments without income will put the nail in the coffin for many businesses. I do agree with your sentiment. Paying their workers who are probably struggling significantly at the moment would be ideal. I don't feel that landlords need the $'s as much as those workers.
You never know. I know some landlords for whom the rent is their primary retirement income.
Re: U.S. retailers plan to stop paying rent to offset virus closures
#15Corporations should keep paying to entities who don't have as much wealth as them. For some people who aren't extraordinarily rich, it maybe their only source of income.
Most of these companies are paying rent to gigantic REITs typically owned in turn by hedge funds. They're not ripping off mom and pop here.
No, they're ripping of Mom and Pop's pensions.
Re: U.S. retailers plan to stop paying rent to offset virus closures
#16I'm not sure how widespread this will be, but it will be interesting to see the impact on commercial real estate in SF and NYC where empty storefronts are already a major issue. I'm imaging a lot of businesses were barely scraping by before the shelter-in-place. We might see a huge increase in empty storefronts after this passes.
Hopefully the landlords realize there is not going to be anybody lining up to take over these leases if they evict. Forgiving a couple months so a business doesn't have to close is almost certainly the shrewd business choice as well as the moral one.
Re: U.S. retailers plan to stop paying rent to offset virus closures
#17All rent should be suspended, across the board, for everyone. Rent is a passive expense that businesses and individuals alike who are not getting any income right now will have no hope of paying.
Re: U.S. retailers plan to stop paying rent to offset virus closures
#18For commercial landlords, we should probably let them stop paying their mortgages, etc., and then the Fed can give 0% loans to the banks who hold the other side of those loans.
It's the ciiircle of cash!
Re: U.S. retailers plan to stop paying rent to offset virus closures
#19I used to criticize the big tech companies for stockpiling dozens of billions of dollars instead of investing them into their businesses, but it's only now I can see why a move like that was wise.
If at all possible, businesses, like people, should keep a rainy day fund. I wonder if all the companies that used their money for stock buybacks are kicking themselves in the foot right now.
Re: U.S. retailers plan to stop paying rent to offset virus closures
#20Realistically, who else is the landlord going to rent the space to right now? Seems to me it's in the landlord's interest to corporate. All lessees are going to be in more-or-less the same boat.
What surprises me is that they didn't just work this out quietly...