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'Dogfight' looms as landlords start suing restaurants over unpaid rent

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Re: 'Dogfight' looms as landlords start suing restaurants over unpaid rent

#81

Post by mcphage »

ars wrote: post #65
tomp wrote: post #35

Earlier quoted context omitted.

It's an unprecedented catastrophe, and even if we will weather it, someone (well, many someones) will suffer (we'll all suffer, but some more than others). Besides solving the crisis (to which most of us cannot meaningfully contribute) the main priority is preserving the rest of the society so that we can go on with as little harm as possible when the immediate crisis (virus) is over. In this specific situation, it's…

> restaurant fails => no food; landlord goes bankrupt => house remains, it's just gonna be owned by someone else. Restaurant fails => someone else will occupy that space and be productive. landlord fails => that new building will not get built. Calculating economic effects is not simple. Landlord fails => doesn't make bank payment => bank fails => people don't get their deposits => government has to make up the diffe…

> Restaurant fails => someone else will occupy that space and be productive.

Eventually, probably, but landlords are a lot more fungible than restaurants—even chain restaurants.

Re: 'Dogfight' looms as landlords start suing restaurants over unpaid rent

#82

Post by paulie_a »

SpicyLemonZest wrote: post #69
paulie_a wrote: post #57

Earlier quoted context omitted.

People are living in a fantasy world if they don't comprehend how big this is..the concept of getting back to normal in a couple months is completely delusional.

Frankly, the concept of not getting back to normal in a couple months is delusional. The idea that people will just stay shut up in their houses indefinitely, as the threat statistically diminishes and the overwhelmed hospitals fade into memory, is the worst kind of spherical cow theorizing.

I don't think people are really thinking about the magnitude of what's happening.

Stastically the threat is not diminishing but expanding rapidly. By the end of the day another 1000 people will have died.

Yes people will stay shut in their house because that choice has been removed

Re: 'Dogfight' looms as landlords start suing restaurants over unpaid rent

#83

Post by ruth9 »

papeda wrote: post #5

I find this question hard to think about. Who exactly should be pricing in the risk of something like this happening? On both sides there are agents who have taken on risk. Some of the agents paying rent overextended themselves even before the crisis. Some of the agents renting space did the same. So who should take the hit? Nobody (i.e., the government)? Even that solution seems wrong -- do we really want to incenti…

When I bought my condo I was required by the bank and the condo association to have a small rainy day fund to cover monthly maintenance for a few months in case I lost my job.

It's only been a few weeks of businesses being closed and people out of work. I wouldn't mind if the government steps in and offers 10 year loans to landlords at CONSIDERABLE interest rates or in exchange for SIZEABLE shares of property.

Re: 'Dogfight' looms as landlords start suing restaurants over unpaid rent

#84

Post by ryandrake »

I think Warren Buffet said "only when the tide goes out do you discover who has been swimming naked". What I can't get over is that we just found out basically everyone is swimming naked.

Businesses lose cash flow for one month and they can't pay workers. Workers miss one paycheck and they can't make rent. Landlords miss one rent payment and can't pay their mortgage. Banks start seeing mortgage defaults and immediately need a bailout. Everyone's broke! It's broke all the way down. If any one of those in that chain kept a little emergency fund, we wouldn't be in this situation. How did we all manage to build an economy such that we're all paying each other just-in-time to avoid catastrophe?

Re: 'Dogfight' looms as landlords start suing restaurants over unpaid rent

#85

Post by RhysU »

maxsilver wrote: post #78
jandrewrogers wrote: post #56

Earlier quoted context omitted.

One of the largest second-order effects of transferring all risk to landlords is that rents will go up because risk has a real financial cost that must be covered by cashflow. That will remain true no matter who ends up owning the property.

> One of the largest second-order effects of transferring all risk to landlords is that rents will go up The opposite is likely. If we finally require landlords to actually take on the risks they already consented to previously, many of them will give up and sell out -- freeing property up to be used productively by real people, and lowering rents. In effect, if we stop bailing out landlords, landlording will become…

Yeah, but the landlords will increase their rents to account for the risk that you will stop bailing them out.

Landlords already take risk that you stink as a renter. What's new is that everyone stinks simultaneously for the first time in many decades.

Re: 'Dogfight' looms as landlords start suing restaurants over unpaid rent

#86

Post by pgsbathhouse2 »

ryandrake wrote: post #84

I think Warren Buffet said "only when the tide goes out do you discover who has been swimming naked". What I can't get over is that we just found out basically everyone is swimming naked. Businesses lose cash flow for one month and they can't pay workers. Workers miss one paycheck and they can't make rent. Landlords miss one rent payment and can't pay their mortgage. Banks start seeing mortgage defaults and immediate…

> How did we all manage to build an economy such that we're all paying each other just-in-time to avoid catastrophe?

Stagnate wages. And instead of raising wages, we lowered interest rates to keep the money flowing going.

As we have just discovered, an entire segment of society is being propped up by the borrowing power of the "middle class" in America.

We have been pulling the wrong levers, and as you've said in not so many words, our current economy is a farce. People are being fed the scraps of the economic pie.

We should give the people their money; their due, proper wages. We should stop formulating economic policies on "the rich should get richer no matter what." It might not be too late to return to sound economic policies that benefit the populace and not a select few, and in return we'd have a more robust economy.

Re: 'Dogfight' looms as landlords start suing restaurants over unpaid rent

#87

Post by Animats »

Much of brick and mortar retail is just going to be unnecessary after this. Once everyone has online ordering set up, there will be a lot less demand. Really, who wants to go to Safeway? Buy AMZN? Maybe.

Same for office space. Work from home will be the new normal for people who work in offices. People who go to work in person will do something other than use a keyboard and screen. I've been wondering for some time when we'd hit "peak office". It just happened.

It's going to be a year or two before bars, restaurants, nightclubs, and sports get back to normal. Not until there's a vaccine and almost everyone has had it.[1] Or, the hard way, repeated smaller waves of epidemics until about 60% of the population has had it and the disease dies out for lack of new victims. After lockdown, we're still stuck with "social distancing" for many months.

Life will go on fine. There are going to be screams from commercial real estate owners. You want to see entitlement? Talk to a landlord. Manufacturing will be fine. Services will do great. Office space and retail space will hurt. That's OK. We survived the death of malls.

[1] https://www.sfchronicle.com/health/article/What-Bay-Area-res...

Re: 'Dogfight' looms as landlords start suing restaurants over unpaid rent

#88

Post by Animats »

Animats wrote: post #87

Much of brick and mortar retail is just going to be unnecessary after this. Once everyone has online ordering set up, there will be a lot less demand. Really, who wants to go to Safeway? Buy AMZN? Maybe. Same for office space. Work from home will be the new normal for people who work in offices. People who go to work in person will do something other than use a keyboard and screen. I've been wondering for some time w…

Other businesses on the way out:

- Major League Baseball. The average age of a baseball viewer is 57, up from 52 in 2006. Just 7% of baseball’s audience is below age 18. The 2020 summer season will almost certainly be cancelled due to the epidemic. The 2021 season may be cancelled due to lack of interest. Once people get out of the habit, it's hard to get interest going again. Horse racing aged out that way. Who goes to a horse track any more?

- It's going to be amusing if NFL football gets replaced this fall by Madden NFL 20. Could happen. Simulated football, played by the real coaches, with Pixar-quality rendering, on national TV? Basketball, with smaller teams, might carry on; everyone gets tested before the game, and there's no audience. "Audience insertion" in video coverage of sports could become a thing. It's often been done in movies, after all.

- Boeing? Will any 737 Max ever need to fly again? People willbe moving around less in large vehicles for several years.

- Cruise lines? Forget it for a few years.

On the way up:

- Biodefense, of course. Nobody ever shut down the whole world before. This was an accident. Somebody might do it on purpose. It's too easy to scale. That DARPA program to generate antibodies for a new virus will be a big deal. Vaccine R&D and manufacturing will be way up, with plenty of funding from many governments. Watch the anti-terrorism lobby pivot to biodefense.

- Anything associated with working from home, of course.

- Delivery. But expect the "gig economy" to be made more like regular employment. Expect the quality of delivery to improve. The delivery industry needs to keep the cold stuff cold and the hot stuff hot. Only Safeway and pizza delivery try to do that now.

Re: 'Dogfight' looms as landlords start suing restaurants over unpaid rent

#89

Post by rasz »

jasonjei wrote: post #25
dahdum wrote: post #14

Government should take a hit, in my opinion. It's inefficient for every individual and entity to prepare themselves against things like this, especially since government action (stay at home orders) is exacerbating it. The business "bailouts", at least the in US, are mostly just loans anyway. Taking a "too bad" stance and letting businesses cascade fail prolongs the pain and leaves the country worse off when the cris…

We just passed the CARES Act in the US, which gives small businesses a loan about 2.5 X their average monthly payroll. It is fully forgiven if used for payroll, rent, or utilities in the first 8 weeks.

Except banks refuse to give you any loan.
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