Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Busted retailers use bankruptcy to break leases by the thousands

bnnbloomberg.ca

Post reply on HN
Print view View original

101–110 of 278 posts

Re: Busted retailers use bankruptcy to break leases by the thousands

#101

Post by cactus2093 »

SketchySeaBeast wrote: post #59
landryraccoon wrote: post #41

Earlier quoted context omitted.

I hope it ends up causing residential real estate prices to fall as a consequence. Maybe then millennials will be able to afford homes. I understand some people treat their home as savings but that's bad in every way for society and for the homeowner. I have a home and the only return I expect on it is to be able to continue living there. I'm certainly not going to depend on it for my retirement, as that would be rea…

> I understand some people treat their home as savings but that's bad in every way for society and for the homeowner. I have a home and the only return I expect on it is to be able to continue living there. I'm certainly not going to depend on it for my retirement, as that would be really unwise. How else can we think about an expense of hundreds of thousands of dollars? It's ludicrous to spend that much on something…

> At this point, given the instability in the market I have no idea what is the wise move to put money into for retirement. Investments have tanked and I don't know at what point they'll recover

With all the instability of a once-in-a-century pandemic, the S&P is still up 1% today from where it was January 1. Specific large companies' stock like Amazon, Apple, and Tesla are up 50-300% since January.

The issue of saving for retirement is complex, thinking on a 10-40 year horizon as the world continues to change and evolve. But this is a bizarre time to be complaining about stocks as an investment.

Re: Busted retailers use bankruptcy to break leases by the thousands

#102

Post by nickff »

coliveira wrote: post #95
timy2shoes wrote: post #83

Earlier quoted context omitted.

We can't have large investors losing money on any of their (inherently risky) investments. How will the market work if investors can lose money?

This has always been this way. Major investors will not plunge into some big investment without some kind of support from governments. The difference is that now we see this support given after the fact.

Major investors used to risk capital on large assets, but government backstops have really changed the game. Perceived risks have gone down, as have returns.

Many people cite the 1984 bailout of Continental Illinois as a turning point, but there are many examples before and after that.[1]

[1] https://en.wikipedia.org/wiki/Bailout#Examples

Re: Busted retailers use bankruptcy to break leases by the thousands

#103

Post by Tiktaalik »

coliveira wrote: post #95
timy2shoes wrote: post #83

Earlier quoted context omitted.

We can't have large investors losing money on any of their (inherently risky) investments. How will the market work if investors can lose money?

This has always been this way. Major investors will not plunge into some big investment without some kind of support from governments. The difference is that now we see this support given after the fact.

socialize losses, privatize gains. :\

Re: Busted retailers use bankruptcy to break leases by the thousands

#104

Post by wins32767 »

jxramos wrote: post #98

Just curious, at the top of it all are municipalities relaxing property tax dues as well?

My town is already facing a ~10% gap due to loss of state aid and income tax revenue. Many municipalities have contracts with contractual pay increases e.g. 3% per year COL increases on top of the constantly increasing healthcare costs (those were ~7% last year for my town). All told, that 10% gap turns into something closer to 15% due to the structural increases in outflows. And all of this for a town that is one of the few that has a AAA bond rating. Absent radically slashing services I don't think most municipalities can afford any sort of cut.

Re: Busted retailers use bankruptcy to break leases by the thousands

#105

Post by fortran77 »

timy2shoes wrote: post #83
gruez wrote: post #37

Earlier quoted context omitted.

>But the moves threaten to upend huge swaths of the real estate market and the half-trillion dollar market for commercial mortgage-backed securities. I wouldn't worry about that. I fully expect the federal reserve to "fix" this by buying the toxic assets with printed money.

We can't have large investors losing money on any of their (inherently risky) investments. How will the market work if investors can lose money?

They bail out mom and pop, too. They bailed out hunrdreds of thousands of people who thought they could make money flipping condos during the 2008 housing bubble.

Re: Busted retailers use bankruptcy to break leases by the thousands

#106

Post by methodin »

dfxm12 wrote: post #99
methodin wrote: post #20

Earlier quoted context omitted.

I would have assumed malls were already on the out prior to COVID - I assume this is just accelerating the timeline? I think every mall the knew of growing up and in college is no more except for the largest (Kind of Prussia). Did your Malls usage also include stripmalls?

FWIW, Franklin/Philadelphia Mills, Neshaminy, Moorestown, Plymouth Meeting, Cherry Hill & Deptford malls are all still open & have some overlap with shoppers in KOP's area. There's nothing wrong with not knowing a lot of malls, but come on, you have to qualify your statement a little bit, because your comment doesn't make sense to me as someone who can drive to KOP and at least a half dozen of the other malls I've be…

I should have qualified that KOP was the largest mall I knew of which is why I called it out. I did forget about Springfield mall which is still alive I assume. https://en.wikipedia.org/wiki/Promenade_at_Granite_Run is turning into a classic shopping center which was my closest mall growing up. In Pittsburgh https://en.wikipedia.org/wiki/Century_III_Mall is getting turn down, Ross Park Mall is declining and Robinson Town Center was half empty the last time I was there ~5 years ago. I can't speak to malls I didn't frequent.

Although "still open" isn't exactly saying much either on your end - how many stores are empty? Are they on the decline?

Re: Busted retailers use bankruptcy to break leases by the thousands

#107

Post by coliveira »

gruez wrote: post #37
mikestew wrote: post #16

Man, with (currently) four comments mentioning that this is "what bankruptcy is for", I think the point of the article might have been missed. This isn't some sneaky "one weird trick", and that's not the reason Bloomberg is reporting on it. In fact, the tone of the article to me is, "yup, companies do it all the time, but..." And the "but" is: But the moves threaten to upend huge swaths of the real estate market and…

>But the moves threaten to upend huge swaths of the real estate market and the half-trillion dollar market for commercial mortgage-backed securities. I wouldn't worry about that. I fully expect the federal reserve to "fix" this by buying the toxic assets with printed money.

If capitalism is to be the law of the land, why not let the rich lose everything? I guess they can easily live on the streets.

Re: Busted retailers use bankruptcy to break leases by the thousands

#108

Post by lostmyoldone »

elipsey wrote: post #77
mikestew wrote: post #16

Man, with (currently) four comments mentioning that this is "what bankruptcy is for", I think the point of the article might have been missed. This isn't some sneaky "one weird trick", and that's not the reason Bloomberg is reporting on it. In fact, the tone of the article to me is, "yup, companies do it all the time, but..." And the "but" is: But the moves threaten to upend huge swaths of the real estate market and…

Lots of things were already ghost towns. Even before covid, I am always seeing people with no buildings, and buildings with no people. I'm in SF now, but I have seen this in cities and small towns, red states and blue states: empty malls, hobo jungles down the block from me, friends with minimum wage jobs sleeping in cars, squatters getting the bum’s rush. I imagine there are good reasons to have less than %100 perce…

In many areas you can earn significantly without have tenants, if you can wait a decade to get paid. Having tenants is chore, and might make it impossible to sell the property for a different use.

Market economy works fairly well as to get the most value from the least work. If you allow empty apartment buildings, you will have empty apartment buildings if that's likely the best risk/reward for the owner.

It's not about too much or too little market economy, it's about accepting the proliferation about the wrong kinds of markets, markets that are not in the best interest of people. We don't accept trade in ivory because that's not good for the elephants, there's no reason to accept apartment buildings left empty when it's to the detriment of people.

No economic policy will govern itself, especially not any policy claimed to do so.

Re: Busted retailers use bankruptcy to break leases by the thousands

#109

Post by supertrope »

wins32767 wrote: post #100
floatingatoll wrote: post #17

It's a bit depressing to see the greed-by-framing here. I feel like the banks are playing musical chairs rather than trying to operate sustainably. It seems like a more efficient approach — one that is not as economically destructive to GDP after the pandemic — would be: 1. Retailer notifies their lease holders that a given location is impacted by public health closures, reducing revenues for products originating fro…

You need a 4. Federal government issues $$$ to property tax authority to cover income gap. The property tax authority needs that revenue now to pay their bills (teachers, sanitation, fire, EMT, police, etc), an easement won't cut it. They need a backstop before they can do that since all of those are critical or legally mandated services and municipalities run very lean.

Yes. Property tax shortfalls leads to laying off teachers.

Re: Busted retailers use bankruptcy to break leases by the thousands

#110

Post by valuearb »

mikestew wrote: post #16

Man, with (currently) four comments mentioning that this is "what bankruptcy is for", I think the point of the article might have been missed. This isn't some sneaky "one weird trick", and that's not the reason Bloomberg is reporting on it. In fact, the tone of the article to me is, "yup, companies do it all the time, but..." And the "but" is: But the moves threaten to upend huge swaths of the real estate market and…

Malls were already becoming ghost towns. All this means is that mall owners will need to be more aggressive about offering rent discounts.
Post reply on HN