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

bloomberg.com

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

#31

Post by JMTQp8lwXL »

charia wrote: post #19

I 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.

It's easier to stockpile billions of dollars when you have no idea what to do with it. The typical business does not have this luxury. Some tech companies are worth more than some country's GDPs. This advice is analogous to a billionaire telling a minimum wage employee to save more.

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

#32

Post by rjkennedy98 »

charia wrote: post #19

I 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.

you are right that most companies should have a rainy day fund, but tech companies like Apple are way way way past a rainy day fund. Apple is sitting on US treasury department level money.

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

#33

Post by dugmartin »

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.

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

#34

Post by [deleted] »

charia wrote: post #19

I 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.

[deleted]

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

#35

Post by [deleted] »

henrikschroder wrote: post #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…

[deleted]

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

#36

Post by HammockTester »

henrikschroder wrote: post #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…

As long as you're the one happily shelling out you can reasonably promote that idea.

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

#37

Post by nostromo »

joe_the_user wrote: post #30

The economy is effectively frozen. But you have to distinguish the production process from the monetary, contractual and ownership relations that normally control the production process. We can continue to produce necessary , essential good during this crisis and let the rest of the economy stay frozen 'till the end of this mess. The situation should be the equivalent of a war or a different natural disaster. Essenti…

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 they run out of money, fire everyone, and throw in the towel. They will not have savings to restart after the closure.

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

#38

Post by joe_the_user »

NotAnEconomist wrote: post #27
charia wrote: post #19

I 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.

Why would they? They're not going to have to re-issue shares at a lower price; they're going to get bailed out by the taxpayers. The conditions for government money should be: 1. All current debt is converted into shares, erasing payback preferences and on-going payments to creditors. 2. Companies must issue new shares as collateral to the government at current market rate, in exchange for the money. 3. Rather than r…

Yeah, I'm not fan of "the corporations" but the decisions that would made by various corporations to leverage to the hilt came from the overall market conditions rather than individual enterprise decisions.

(not that I think much of the parent's idiosyncratic money-scheme but still).

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

#39

Post by donclark »

henrikschroder wrote: post #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…

> "we're in this current shit together, all of us."

So are you saying that we do not have to pay rent either?

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

#40

Post by vkou »

HammockTester wrote: post #36
henrikschroder wrote: post #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…

As long as you're the one happily shelling out you can reasonably promote that idea.

What does this mean in this context?

Are we spilling ink for the sake of the owners of these retail spaces? Do you think they are going to be any better off if these retailers just stop paying rent, and go out of business, instead?

Instead of grousing, the landlords should be petitioning for their mortgage payments to be suspended for this time period.

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