U.S. retailers plan to stop paying rent to offset virus closures • Hacker News Board

Re: U.S. retailers plan to stop paying rent to offset virus closures

#141

Post by sporkland » Wed, Mar 25, 2020, 7:32 AM UTC

dugmartin wrote: post #33

My wife and I just bought a small commercial building 6 months ago (great timing). We have already offered rent deferment to our tenants (a restaurant, a bookstore and a few professional offices) with a gradual payback. We are all in this together.

Honestly curious, but I'm sure it will sound accusatory. They (your tenants) permanently lose the business for the months the economy is shut down. But you as a land lord expect to be made whole just over a longer timespan. How is that in it together? In it together feels like you'd lose some portion of the rent you are charging or all of it and expect some amount of relief from the government.

I mostly ask because I'm not fully sure what should be fair for all parties involved. Restaurants, bookstores and offices shouldn't fail because they can survive a once in a hundred year plague. Neither should property owners who are leasing said property. But I don't understand the rules in this situation. You may be preaching about how you're in it together, but if your tenant goes under you may be screwed on your loan payments.

Re: U.S. retailers plan to stop paying rent to offset virus closures

#142

Post by 6510 » Wed, Mar 25, 2020, 7:46 AM UTC

wegs wrote: post #92

humanrebar wrote: post #85

Earlier quoted context omitted.

And how do people who make incomes on collecting on obligations (landlords, pensioners, etc.) buy new things, like food and medicine?

That's where you need much smaller bailouts and stimuli. Agriculture is less than 1% of the GDP. The currently-discussed bailout is big enough to feed all of America for years. And it's actually not a bad idea to nationalize food distribution -- supermarkets are where the virus spreads. Many countries have switched to safe deliveries of food. And conversely, the current bailout, as proposed, doesn't come anywhere clo…

But the commies have been telling us that for years and we didn't listen. Why would we listen now?

I'm joking, well put, thanks.

Re: U.S. retailers plan to stop paying rent to offset virus closures

#143

Post by 6510 » Wed, Mar 25, 2020, 7:51 AM UTC

DougN7 wrote: post #48

refurb wrote: post #8

I'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.

I think many businesses will discover they don’t need to pay for an office. Would not want to own an office building right now.

They already knew, they just liked to see the drones line up and sing the national anthem. The sense of power having inferiors around.

Re: U.S. retailers plan to stop paying rent to offset virus closures

#144

Post by 6510 » Wed, Mar 25, 2020, 7:57 AM UTC

wegs wrote: post #54

nostromo wrote: post #49

Earlier quoted context omitted.

This is a recipe for bank failures and a financial crisis.

Why? Banks get payments 3 months later. They can also get 0% interest loans from the fed. Why do they fail?

As a whole nothing connects the financial system to the real world. Therefore it cant fail. If the robots take over and humanity goes extinct the financial system will continue to work just fine.

Re: U.S. retailers plan to stop paying rent to offset virus closures

#145

Post by bawolff » Wed, Mar 25, 2020, 8:02 AM UTC

sporkland wrote: post #141

dugmartin wrote: post #33

My wife and I just bought a small commercial building 6 months ago (great timing). We have already offered rent deferment to our tenants (a restaurant, a bookstore and a few professional offices) with a gradual payback. We are all in this together.

Honestly curious, but I'm sure it will sound accusatory. They (your tenants) permanently lose the business for the months the economy is shut down. But you as a land lord expect to be made whole just over a longer timespan. How is that in it together? In it together feels like you'd lose some portion of the rent you are charging or all of it and expect some amount of relief from the government. I mostly ask because I…

There is no magic solution here, all parties are going to get somewhat screwed by this.

Its not like defering the rent is neccesarily in the best interest (from a purely ecconomic perspective of the landlord). If you defer rent for many months only for tenant to go under when this ends (and lets be real, many tenants are going to go under when this is all said and done), the landlord would be better off being heartless and not defering rent

Re: U.S. retailers plan to stop paying rent to offset virus closures

#146

Post by bawolff » Wed, Mar 25, 2020, 8:05 AM UTC

joe_the_user wrote: post #107

nostromo wrote: post #37

Earlier quoted context omitted.

You can't turn off and on the economy like a switch. People need to pay rent and mortgages, or loans will not be repaid. If loans don't get repaid, banks fail. If banks fail, we have another financial crisis. The last one took a decade to recover from and there weren't even that many bad mortgages (as a percent of all mortgages). Businesses right now are eating a bunch of costs. That can't last for very long before t…

You can't turn off and on the economy like a switch. Actually, you can. Money transactions can be suspended and goods can be distributed directly. If banks fail, we have another financial crisis. The last one took a decade to recover from. Not even, what we're looking at is the dead Frankenstein construction created to avoid dealing excess speculation of last time. The economy has been artificially supported by QE si…

Well its certainly true you can do that (World wars prove that) i doubt the united states has its shit together to even attempt that. Even if it did, i doubt it could do it quickly enough to be useful.

Re: U.S. retailers plan to stop paying rent to offset virus closures

#147

Post by 6510 » Wed, Mar 25, 2020, 8:07 AM UTC

donclark wrote: post #121

henrikschroder wrote: post #117

Earlier quoted context omitted.

... No, that's the complete opposite of what I'm saying. Keep paying rent if you can pay rent. But I understand that it's extremely difficult for some people to accept a solution that's unfair for some individuals, even though it's the solution with the least amount of total negatives. As collective solutions tend to be.

> "Keep paying rent if you can pay rent." How in the hell is anyone going to know if retailers or people can actually afford to pay rent?

They will call the bluff and stop paying. Mass evictions probably wont be tolerated.

Re: U.S. retailers plan to stop paying rent to offset virus closures

#148

Post by bawolff » Wed, Mar 25, 2020, 8:11 AM UTC

wegs wrote: post #98

cmurf wrote: post #89

Earlier quoted context omitted.

Those payments in turn pay for other things. Stopping them, stops everything. Pensions and 401ks, all kinds of commercial paper holding money short term stops, almost all home and commercial property sales stop, companies can't pay their own big bills due to vendors or fulfill order to customers, or can't convert bonds to stocks. It's too simple of an idea. What you are looking for is the time equivalent of printing…

> Those payments in turn pay for other things. Stopping them, stops everything. That's correct. We stop everything for 3 months to get rid of the virus. Or almost everything. > almost all home and commercial property sales stop Have you tried buying or selling a house these days? In most parts of America, you can't -- the registries of deeds aren't open for business with coronavirus. This is already stopped. > What y…

You're stopping payments for a lot of things. I assume the people on the recieving ends of those payments are still expected to buy food somehow? How?

Or are we also expecting that grocery stores provide food on credit that they are not expected to collect on any time soon?

Re: U.S. retailers plan to stop paying rent to offset virus closures

#149

Post by bawolff » Wed, Mar 25, 2020, 8:14 AM UTC

henrikschroder wrote: post #123

donclark wrote: post #121

Earlier quoted context omitted.

> "Keep paying rent if you can pay rent." How in the hell is anyone going to know if retailers or people can actually afford to pay rent?

You ask them. If they say no, then they can't pay rent. "OMG everyone is going to totally take advantage of this!" Not everyone, but yes, plenty of people and business will. "OMG that's unfair." Yes, I acknowledged that from the start. The whole point of my argument is that this might still be preferable to the alternative, it might still be better than sticking to what's 100% fair, because collectively we might emer…

Ok. Im a (small) landlord. None of my tennants claim to be able to pay rent. How am I buying groceries this month?

Re: U.S. retailers plan to stop paying rent to offset virus closures

#150

Post by ianleeclark » Wed, Mar 25, 2020, 8:15 AM UTC

candybar wrote: post #135

wegs wrote: post #50

Earlier quoted context omitted.

Sure you can. You stop rent. You stop mortgage interest. You pause mortgage principal. You do that across the board for every rental, contract, and debt obligation in America. In 90 days, it expires, and everything starts back up again. https://docs.google.com/document/d/1YbtJGn7ida2IYNgwCFk3Sjhs...

This simply doesn't work at all. First, the situation is not that dire to start with, most people and businesses can meet their obligations. We don't have anything remotely close to a financial crisis. It makes no sense to effectively turn the entire economy into a command economy and effectively declare a default to save what appears to be a fairly small part of the economy that will have trouble. You can have targe…

> First, the situation is not that dire to start with, most people and businesses can meet their obligations.

76% of americans live paycheck-to-paycheck. Regardless of if you like it or not, a time will come when massive amounts of rents aren't paid. It can either fully immiserate the economy (most likely course of action), or it can be paused.

> the markets simply won't function at all even on a purely basic level

Can we please stop pretending that this zombie market we've propped up since 2008 works? If you like markets, then you shouldn't agree with the fact that the government can effectively be held hostage every decade or so due to "too big to fail."