6 ms·

Amazon is now the only store open. This will clearly accelerate the death of retail, to the point that I'm not even sure it will survive. We must have a rent h

Amazon is now the only store open. This will clearly accelerate the death of retail, to the point that I'm not even sure it will survive. We must have a rent holiday if those businesses and their workers are to survive.

WalterBright 7y ago
> We must have a rent holiday if those businesses and their workers are to survive. We'll get a lot of rent forgiveness naturally. If a strip mall has some tenants who cannot make rent in this crisis, who are they going to get who can pay? The pragmatic approach is to keep your existing tenants, because their survival is your strip mall's survival.
- michaelt 7y ago
  A cynical, calculating strip mall landlord might think they're more likely to get a government cash handout (or a cash handout to their tenants who then hand it to them, which is effectively the same thing) if they prove their tenants will go bankrupt without it.
  - WalterBright 7y ago
    It simply does the landlord no good at all to evict them.
- taurath 7y ago
  Will that happen for housing? The businesses will lose all their workers during that time, and everyone will go work in an amazon warehouse.
- fiblye 7y ago
  We might get a lot, but it likely won’t be enough. Many land owners would already prefer to leave their buildings empty for years over even considering negotiating on rent. I doubt anything can change their minds.
  - social_quotient 7y ago
    It’s odd but really true. Does anyone have insight why this is the case?
    - Kluny 7y ago
      According to Strong Towns, it's because the building can borrow money based on the projected value of rent. If they lower the rent, they can't borrow as much money. https://www.strongtowns.org/journal/2017/11/27/the-paradox-of-persistent-vacancies-and-high-prices https://www.strongtowns.org/journal/2017/11/27/the-paradox-o...
    - opportune 7y ago
      At an aggregate level it can make more sense to leave X% of units vacant than to lower prices (which could have effects on the rate you can charge with the rest of your units). I think it’s an example of our financial system not working as intended. For example let’s say I have a 100 unit apartment building. If I maintain a 20% vacancy rate target I can charge an average of $1000/mo/unit. But to set a price at which my vacancies get filled very quickly, to hit a 5% vacancy rate, maybe I need to charge $700/mo/unit. In that case I’m making less money than before - $80k/mo vs $66.5k/mo.
      - leetcrew 7y ago
        why wouldn't you just price discriminate through short-term concessions to fill the remaining 20% and increase revenue? this seems to be what most apartment buildings around me actually do.
        opportune 7y ago
        That is what people do sometimes (esp. in SF where you'll get "2 months free rent"). But I think in commercial real estate the math is a bit different because leases tend to be longer - so you really don't want to budge on the actual monthly rate and even 1-2 months free doesn't end up helping the prospective tenant that much
- tomatocracy 7y ago
  If you think the mall won't survive anyway, then this calculation changes though and instead you look to recoup as much as you can in the short term. Ordinarily this is a good thing because it forces unviable businesses to cease trading and the people and resources can be redeployed into something more productive (and in many countries at an individual level the people will receive help from the government to do this without ruining their lives). The idea here is to minimise the long term damage caused by people being forced into liquidation as a route to recoup losses and increase protection for individuals who are also temporarily affected.
VectorLock 7y ago
>Amazon is now the only store open. I've had Amazon Fresh cancel two orders so far so I'm not sure how open they are.
- vonmoltke 7y ago
  I can't even place an Amazon Fresh order right now, and the earliest Peapod delivery date I can get is 28MAR.
  - sjg007 7y ago
    It's kind of strange to see a complete breakdown in online ordering and delivery of groceries. Target etc... basically shut down curbside delivery because they need people to restock shelves. That means you have to visit the store. Odd. I expect to see grocery only delivery companies really take shape soon (like Instacart).
prostoalex 7y ago
Which area are you in? Every large retail store is open (so far) in Southern California, with most retailers' inventory being purchased at full retail prices. I am not sure why the retailers don't switch to curbside-pickup model exclusively, instead preferring hordes of customers roaming around every single morning, but from what I hear, Instacart and store-specific delivery programs are overwhelmed.
- asdff 7y ago
  They are open in Southern California, but running out of basics fast. I noticed a complete lack of certain produce, milk, eggs, bread, as well as the oft meme'd paper products. Every morning I go to the grocery store in my neighborhood looking for toilet paper and every morning there is some new staple nearly out of stock. I still have a few rolls left, and amazon seems to have a few remaining in stock, so things aren't dire yet, but they are getting concerning. This is also a city where not too long ago the social contract evaporated after hearing a verdict, requiring military intervention to restore order. An armed militia formerly stood on the roof of the store I scoured today for toilet paper. I'm fearful of what will happen when everyone realizes they can no longer wipe their ass or buy rice and the working class starts getting laid off en masse, and when this virus starts ravaging the 150k+ homeless in southern california.
  - taurath 7y ago
    Thus far the consumables supply chain in the US hasn’t been too badly effected. They’re doing thanksgiving or more amounts of business every day here in Seattle but they’re mostly keeping up. Whether we as a nation rip ourselves apart is on each of us as individuals to make that not happen.
    - vonmoltke 7y ago
      Grocery stores in my part of northern New Jersey are not keeping up, at the moment. On Saturday I was unable to buy fresh meat (of any kind), sausage (without cheese in it), flour, pasta, or canned beans. Produce pickings were slim, and most items were sold out. Ditto canned soup and bread. That's just the things I was actually looking for; there were plenty of other bare shelves throughout the store.
fragmede 7y ago
That's not true. at the very least, Walmart is open, does deliveries, and doesn't charge a monthly fee, unlike Amazon Prime!

WalterBright 7y ago

> We must have a rent holiday if those businesses and their workers are to survive. We'll get a lot of rent forgiveness naturally. If a strip mall has some tenants who cannot make rent in this crisis, who are they going to get who can pay? The pragmatic approach is to keep your existing tenants, because their survival is your strip mall's survival.

michaelt 7y ago
A cynical, calculating strip mall landlord might think they're more likely to get a government cash handout (or a cash handout to their tenants who then hand it to them, which is effectively the same thing) if they prove their tenants will go bankrupt without it.
- WalterBright 7y ago
  It simply does the landlord no good at all to evict them.
taurath 7y ago
Will that happen for housing? The businesses will lose all their workers during that time, and everyone will go work in an amazon warehouse.
fiblye 7y ago
We might get a lot, but it likely won’t be enough. Many land owners would already prefer to leave their buildings empty for years over even considering negotiating on rent. I doubt anything can change their minds.
- social_quotient 7y ago
  It’s odd but really true. Does anyone have insight why this is the case?
  - Kluny 7y ago
    According to Strong Towns, it's because the building can borrow money based on the projected value of rent. If they lower the rent, they can't borrow as much money. https://www.strongtowns.org/journal/2017/11/27/the-paradox-of-persistent-vacancies-and-high-prices https://www.strongtowns.org/journal/2017/11/27/the-paradox-o...
  - opportune 7y ago
    At an aggregate level it can make more sense to leave X% of units vacant than to lower prices (which could have effects on the rate you can charge with the rest of your units). I think it’s an example of our financial system not working as intended. For example let’s say I have a 100 unit apartment building. If I maintain a 20% vacancy rate target I can charge an average of $1000/mo/unit. But to set a price at which my vacancies get filled very quickly, to hit a 5% vacancy rate, maybe I need to charge $700/mo/unit. In that case I’m making less money than before - $80k/mo vs $66.5k/mo.
    - leetcrew 7y ago
      why wouldn't you just price discriminate through short-term concessions to fill the remaining 20% and increase revenue? this seems to be what most apartment buildings around me actually do.
      - opportune 7y ago
        That is what people do sometimes (esp. in SF where you'll get "2 months free rent"). But I think in commercial real estate the math is a bit different because leases tend to be longer - so you really don't want to budge on the actual monthly rate and even 1-2 months free doesn't end up helping the prospective tenant that much
tomatocracy 7y ago
If you think the mall won't survive anyway, then this calculation changes though and instead you look to recoup as much as you can in the short term. Ordinarily this is a good thing because it forces unviable businesses to cease trading and the people and resources can be redeployed into something more productive (and in many countries at an individual level the people will receive help from the government to do this without ruining their lives). The idea here is to minimise the long term damage caused by people being forced into liquidation as a route to recoup losses and increase protection for individuals who are also temporarily affected.

VectorLock 7y ago

>Amazon is now the only store open. I've had Amazon Fresh cancel two orders so far so I'm not sure how open they are.

vonmoltke 7y ago
I can't even place an Amazon Fresh order right now, and the earliest Peapod delivery date I can get is 28MAR.
- sjg007 7y ago
  It's kind of strange to see a complete breakdown in online ordering and delivery of groceries. Target etc... basically shut down curbside delivery because they need people to restock shelves. That means you have to visit the store. Odd. I expect to see grocery only delivery companies really take shape soon (like Instacart).

prostoalex 7y ago

Which area are you in? Every large retail store is open (so far) in Southern California, with most retailers' inventory being purchased at full retail prices. I am not sure why the retailers don't switch to curbside-pickup model exclusively, instead preferring hordes of customers roaming around every single morning, but from what I hear, Instacart and store-specific delivery programs are overwhelmed.

asdff 7y ago
They are open in Southern California, but running out of basics fast. I noticed a complete lack of certain produce, milk, eggs, bread, as well as the oft meme'd paper products. Every morning I go to the grocery store in my neighborhood looking for toilet paper and every morning there is some new staple nearly out of stock. I still have a few rolls left, and amazon seems to have a few remaining in stock, so things aren't dire yet, but they are getting concerning. This is also a city where not too long ago the social contract evaporated after hearing a verdict, requiring military intervention to restore order. An armed militia formerly stood on the roof of the store I scoured today for toilet paper. I'm fearful of what will happen when everyone realizes they can no longer wipe their ass or buy rice and the working class starts getting laid off en masse, and when this virus starts ravaging the 150k+ homeless in southern california.
- taurath 7y ago
  Thus far the consumables supply chain in the US hasn’t been too badly effected. They’re doing thanksgiving or more amounts of business every day here in Seattle but they’re mostly keeping up. Whether we as a nation rip ourselves apart is on each of us as individuals to make that not happen.
  - vonmoltke 7y ago
    Grocery stores in my part of northern New Jersey are not keeping up, at the moment. On Saturday I was unable to buy fresh meat (of any kind), sausage (without cheese in it), flour, pasta, or canned beans. Produce pickings were slim, and most items were sold out. Ditto canned soup and bread. That's just the things I was actually looking for; there were plenty of other bare shelves throughout the store.

fragmede 7y ago

That's not true. at the very least, Walmart is open, does deliveries, and doesn't charge a monthly fee, unlike Amazon Prime!