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It is dissimilar though. In the examples you gave, the airline or Amazon are taking on debt to purchase a plane or a bunch of servers themselves, so if the dema
by strange_quark 7y ago
It is dissimilar though. In the examples you gave, the airline or Amazon are taking on debt to purchase a plane or a bunch of servers themselves, so if the demand decreases in the future, they can sell off those assets. They would probably incur a loss, but at least they could recoup some of their investment. WeWork on the other hand is not a landlord and does not own anything other than the furniture in the offices. If (when) the market turns down, they're going to have a really hard time unloading those liabilities because who's going to want to pick up their lease?
- megaremote 7y agoWhose going to want to rent a plane? You are really pushing this point hard, when it does not fit.
- goatinaboat 7y agoUmm, everyone? https://en.wikipedia.org/wiki/Aircraft_lease#Dry_lease https://en.wikipedia.org/wiki/Aircraft_lease#Dry_lease
- xyzzyz 7y agoIf (when) the market turns down, they're going to have a really hard time unloading those liabilities because who's going to want to pick up their lease? I don't see why it would be any harder than selling off a plane in case of market downturn. Both are hard, and in both cases the owners of the asset (whether it's a lease or a plane) will likely incur a loss, so I don't really see any difference here at all.