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Short term, that is mostly the theory. However, there are businesses that will have closed permanently, and the number of them grows day by day. Many restaura

Short term, that is mostly the theory. However, there are businesses that will have closed permanently, and the number of them grows day by day. Many restaurants survive on razor thin margins, and a few weeks without revenue can shut them down for good. Additionally, people are getting less money right now and so when things reopen you have a bit of a chicken-and-egg problem where restaurants don't get that many people because people need jobs to go there. However, the stock market largely shares your optimism at this point.

learc83 7y ago
>a few weeks without revenue can shut them down for good But what does shut down really mean? They've laid off all their staff, they aren't buying food, so their only major expense is rent. The hardest thing about opening a restaurant is staying open long enough for people to find out about them, so it's in the landlord's best interest not to evict restaurants that will likely do ok once the restrictions are lifted.
- JoeAltmaier 7y ago
  Curiously, I've heard that small-business folks have stopped paying rent! My sister's shop is in a strip mall, and she's the only one who paid the landlord this month. Even the Breugger's Bagel place didn't pay (apparently by corporate decree?!) It's happening all over my town. Tenants paying 1/2 or nothing.
  - madengr 7y ago
    I know my state has barred evictions until May. I assume that pertains to commercial property too.
    - JoeAltmaier 7y ago
      So folks instantly capitalize on that, by stiffing the landlord? It would never have occurred to me. One I talked to was even militant about it. "I tried to call him to negotiate something, but he wouldn't answer his phone! So I sent a check for half, and wrote 'paid in full' on it!" Wow.
      - madengr 7y ago
        I know my employer stiffs paying bills, well past net 30, so I can see others doing it. The worst you have to do is pay back-rent. Nothing to lose. In fact, better to delay it and take advantage of the bailout money that can be used for rent and payroll.
      - pavlov 7y ago
        It's not like the landlord can just get a new tenant in the current situation. The market value for retail real estate has collapsed to nearly zero for the short term. As the owner of the property, the landlord is the one who was bearing the risk.
      - macintux 7y ago
        As a businessperson, you can pay full rent on a property you may never be able to reopen, or you can try to keep from being evicted and wait to see what happens later. If you’re going to fail soon anyway, which I suspect most small businesses are afraid of, you want to minimize your losses.
    - _curious_ 7y ago
      I don't believe it does.
- ta1234567890 7y ago
  > The hardest thing about opening a restaurant is staying open long enough for people to find out about them, so it's in the landlord's best interest not to evict restaurants that will likely do ok once the restrictions are lifted. Have you ever started a restaurant business? You seem to have an overly simplistic view of how things actually work. Restaurants are really hard to run, 90%+ of them fail in the first year and profits are very slim. What you are saying is technically true, but is so simplistic that it's absurd. How does this sound? "the hardest part of starting a saas company is staying open long enough for people to find out about them". Also, rent is usually by far the biggest expense of a restaurant. Current government aid programs don't cover rent (sure 25% of PPP may be used towards rent, but that's a pittance that won't make a difference). Restaurants are going out of business in droves because they can't pay rent.
  - credit_guy 7y ago
    Can't restaurants file for Chapter 11, restructure their debt (i.e. late rent) and continue operating? Airlines do it all the time. Is the legal expense too high? Will their landlords evict them? Some will, but then they need to find new tenants. Many landlords will probably be willing to work out a deal.
    - ta1234567890 7y ago
      Most landlords are not being open to working out deals as they are holding on to the same optimistic sentiments expressed in so many comments here. They think their properties are very valuable and that they'll find new tenants without too much trouble. Technically any business can file for chapter 11, but it costs about $100k+ minimum in legal fees (at least in California). Most small businesses cannot afford that.
      - Exmoor 7y ago
        It will certainly be interesting to see how long it takes landlords to realize that there's about to be a ton of retail space on the market and that trying to absorb a couple months of not collecting rent from their businesses may make them more money in the long run than forcing a business to close and enduring 8/12/24 months of having an empty storefront.
brenden2 7y ago
Fair enough, my assumption has always been that we'll start opening back up in May. If this drags on much longer than that, then who knows. Things could certainly fall into a depression, and that's the pessimistic view. I'm still optimistic.
- DanBC 7y ago
  In the UK we've made considerable changes to NHS community health care in order to release capacity to work on covid-19 in inpatient hospital settings. These changes are expected to last until at least 31st July. https://mcusercontent.com/69607e85dd2b3ddde59bac2b6/files/7208d91f-c563-4729-a599-62774e3e68b9/COVID_19_prioritisation_within_community_health_services_with_annex_19_March_2020.pdf https://mcusercontent.com/69607e85dd2b3ddde59bac2b6/files/72... Maybe the US has enough beds to cope with opening things up as early as the end of May, but I find that surprising.
- _curious_ 7y ago
  Optimism is essential, though so is pragmatism. Why do you think "we'll start opening back up in May."? And do you think it will be 100% of businesses or a slow and select approach? (assuming US / western region here).
  - brenden2 7y ago
    Some politicians have been suggesting we could open up in May, notably the US president. Others have announced extended closures. In the US it's a state by state matter.
SkyBelow 7y ago
> However, there are businesses that will have closed permanently Businesses might close, but the demand will still return and new businesses will come back. Of little comfort to those who lose their business, but should let workers know that they'll still be demand for their job under another company if not their current. There will also be some changes in demand that would change businesses, but even then there should be new demand elsewhere.
- pixl97 7y ago
  >demand will still return and new businesses will come back Elasticity. The question is when. Is that a month from now, is that 4 months from now? How fast will new businesses be able open. How fast will existing businesses be able to expand into the demand. I think I great many people are thinking the systems are able to grow much faster than they will actually be able to. And this is also making the assumption that the demand will return. When 20% of your population is unemployed and not making an income at all, I don't see them buying much when the floodgates are opened.

learc83 7y ago

>a few weeks without revenue can shut them down for good But what does shut down really mean? They've laid off all their staff, they aren't buying food, so their only major expense is rent. The hardest thing about opening a restaurant is staying open long enough for people to find out about them, so it's in the landlord's best interest not to evict restaurants that will likely do ok once the restrictions are lifted.

JoeAltmaier 7y ago
Curiously, I've heard that small-business folks have stopped paying rent! My sister's shop is in a strip mall, and she's the only one who paid the landlord this month. Even the Breugger's Bagel place didn't pay (apparently by corporate decree?!) It's happening all over my town. Tenants paying 1/2 or nothing.
- madengr 7y ago
  I know my state has barred evictions until May. I assume that pertains to commercial property too.
  - JoeAltmaier 7y ago
    So folks instantly capitalize on that, by stiffing the landlord? It would never have occurred to me. One I talked to was even militant about it. "I tried to call him to negotiate something, but he wouldn't answer his phone! So I sent a check for half, and wrote 'paid in full' on it!" Wow.
    - madengr 7y ago
      I know my employer stiffs paying bills, well past net 30, so I can see others doing it. The worst you have to do is pay back-rent. Nothing to lose. In fact, better to delay it and take advantage of the bailout money that can be used for rent and payroll.
    - pavlov 7y ago
      It's not like the landlord can just get a new tenant in the current situation. The market value for retail real estate has collapsed to nearly zero for the short term. As the owner of the property, the landlord is the one who was bearing the risk.
    - macintux 7y ago
      As a businessperson, you can pay full rent on a property you may never be able to reopen, or you can try to keep from being evicted and wait to see what happens later. If you’re going to fail soon anyway, which I suspect most small businesses are afraid of, you want to minimize your losses.
  - _curious_ 7y ago
    I don't believe it does.
ta1234567890 7y ago
> The hardest thing about opening a restaurant is staying open long enough for people to find out about them, so it's in the landlord's best interest not to evict restaurants that will likely do ok once the restrictions are lifted. Have you ever started a restaurant business? You seem to have an overly simplistic view of how things actually work. Restaurants are really hard to run, 90%+ of them fail in the first year and profits are very slim. What you are saying is technically true, but is so simplistic that it's absurd. How does this sound? "the hardest part of starting a saas company is staying open long enough for people to find out about them". Also, rent is usually by far the biggest expense of a restaurant. Current government aid programs don't cover rent (sure 25% of PPP may be used towards rent, but that's a pittance that won't make a difference). Restaurants are going out of business in droves because they can't pay rent.
- credit_guy 7y ago
  Can't restaurants file for Chapter 11, restructure their debt (i.e. late rent) and continue operating? Airlines do it all the time. Is the legal expense too high? Will their landlords evict them? Some will, but then they need to find new tenants. Many landlords will probably be willing to work out a deal.
  - ta1234567890 7y ago
    Most landlords are not being open to working out deals as they are holding on to the same optimistic sentiments expressed in so many comments here. They think their properties are very valuable and that they'll find new tenants without too much trouble. Technically any business can file for chapter 11, but it costs about $100k+ minimum in legal fees (at least in California). Most small businesses cannot afford that.
    - Exmoor 7y ago
      It will certainly be interesting to see how long it takes landlords to realize that there's about to be a ton of retail space on the market and that trying to absorb a couple months of not collecting rent from their businesses may make them more money in the long run than forcing a business to close and enduring 8/12/24 months of having an empty storefront.

brenden2 7y ago

Fair enough, my assumption has always been that we'll start opening back up in May. If this drags on much longer than that, then who knows. Things could certainly fall into a depression, and that's the pessimistic view. I'm still optimistic.

DanBC 7y ago
In the UK we've made considerable changes to NHS community health care in order to release capacity to work on covid-19 in inpatient hospital settings. These changes are expected to last until at least 31st July. https://mcusercontent.com/69607e85dd2b3ddde59bac2b6/files/7208d91f-c563-4729-a599-62774e3e68b9/COVID_19_prioritisation_within_community_health_services_with_annex_19_March_2020.pdf https://mcusercontent.com/69607e85dd2b3ddde59bac2b6/files/72... Maybe the US has enough beds to cope with opening things up as early as the end of May, but I find that surprising.
_curious_ 7y ago
Optimism is essential, though so is pragmatism. Why do you think "we'll start opening back up in May."? And do you think it will be 100% of businesses or a slow and select approach? (assuming US / western region here).
- brenden2 7y ago
  Some politicians have been suggesting we could open up in May, notably the US president. Others have announced extended closures. In the US it's a state by state matter.

SkyBelow 7y ago

> However, there are businesses that will have closed permanently Businesses might close, but the demand will still return and new businesses will come back. Of little comfort to those who lose their business, but should let workers know that they'll still be demand for their job under another company if not their current. There will also be some changes in demand that would change businesses, but even then there should be new demand elsewhere.

pixl97 7y ago
>demand will still return and new businesses will come back Elasticity. The question is when. Is that a month from now, is that 4 months from now? How fast will new businesses be able open. How fast will existing businesses be able to expand into the demand. I think I great many people are thinking the systems are able to grow much faster than they will actually be able to. And this is also making the assumption that the demand will return. When 20% of your population is unemployed and not making an income at all, I don't see them buying much when the floodgates are opened.