Redditor explains why commercial property sits vacant instead of reducing rent

Post by quarterdime » Tue, Sep 08, 2020, 11:17 PM UTC

PeterStuer wrote: post #17

quarterdime wrote: post #15

I think this market has been headed for collapse since well before coronavirus. https://www.propublica.org/article/whistleblower-wall-street... The industry is reading off the exact same script as 2008 but with all sorts of increasingly silly financial instruments based off commercial real estate. Because of course commercial real estate is different. This is crazy and has been going on for a while. I fear this is ev…

Where was the lesson in 'if only we screw up bad enough we will be showered perpetually in lavish bailout wealth'?

Yeah, I think the lesson was indeed pretty well learned. My initial comment was off though--I said that the banks hold a lot of this debt. I reread and saw that reddit poster claimed that the banks hold very little and pass it down the line to funds. Maybe they hold little enough that they will be fine. Maybe they hold enough that they will need a bailout. Either way they win. I agree with you. Their success with mortgage backed securities last time appears to have inspired a sequel.

Post by jesterson » Thu, Sep 10, 2020, 6:26 AM UTC

Nasrudith wrote: post #19

jesterson wrote: post #18

Earlier quoted context omitted.

Vacancy tax won't solve the problem, will just escalate the inevitable crash

Wouldn't stopping the very suboptimal behavior earlier be a net good if the crash is inevitable? It sucks to be caught in it of course but returning to remotely rational of renting it to /someone/ when there is demand should help the whole long term. The "pray and delay" logic also seems to reflect inverted causation fallacies where they think a lower rent business will neccessarily drive away other higher rent ones…

That's hell of a question you've made here. Irrelevant to the answer (if it even exists), humans tend to accumulate debt, it's just human nature, we are incredibly shortsighted.

And under debt I mean not just financial - if you look at every organisation you will see huge technical debt, which is often less observed and accounted compared to financial debt.

So going back to your question, it may or may not be suboptimal to do so, there is no way of knowing at timespan long enough to answer the question with substantial evidence.

And if we honestly ask ourselves if we want the vast crisis proliferating at every level of our society to happen during our lifespan or being delayed to some time after we die - the answer may not be the one we'd expect.

And even if you and me are ready to jump into it in order to save coming generations some normal life - most of guys behind us have different opinion on it.

Re: Redditor explains why commercial property sits vacant instead of reducing rent

Re: Redditor explains why commercial property sits vacant instead of reducing rent