7 ms·

>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 the

>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 6y 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 6y ago
  I know my state has barred evictions until May. I assume that pertains to commercial property too.
  - JoeAltmaier 6y 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 6y 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 6y 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 6y 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_ 6y ago
    I don't believe it does.
ta1234567890 6y 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 6y 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 6y 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 6y 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.

JoeAltmaier 6y 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 6y ago
I know my state has barred evictions until May. I assume that pertains to commercial property too.
- JoeAltmaier 6y 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 6y 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 6y 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 6y 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_ 6y ago
  I don't believe it does.

ta1234567890 6y 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 6y 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 6y 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 6y 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.