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> The bizarre thing is that even before the pandemic I've seen popular Bay Area restaurants close down due to huge rent increases and then the spaces are still

> The bizarre thing is that even before the pandemic I've seen popular Bay Area restaurants close down due to huge rent increases and then the spaces are still vacant years later. I don't understand what commercial landlords are thinking? If its anything like what I saw in Boulder, most are held by large companies (TEBO) who can write off the losses come tax year because they have other more profitable locations/sites. The restaurant I came out of retirement on in 2018 has been vacant since Summer of 2018, just to give context that building was $13k/month before operational costs, which were immense due to it be an incredibly old building. I personally had to patch up the pipesdue to massive leaks as our dishwasher wasn't getting enough pressure and my station was getting all the run off I had run to FOH get some wine cork to plug the holes and used a bunch of duct tape until the plumber could get there for the next week of service. I think I overheard the Sous and Execs saying where I last worked that rent was 20k/month for the flagship, which on a busy night we could clear in a single days (day/night) service. The further this has gone on, Colorado only just lifted its stay at home order today, the more I think I've hung up my whites and knives professionally for good this time. By contrast, this is what is happening in Hong Kong, as they have captured the loyalty of their patrons and are months ahead of most country in terms of Covid19 recovery [1]: 1: https://www.reuters.com/article/us-hongkong-protests-mayday/business-booms-for-yellow-firms-backing-hong-kong-protest-movement-idUSKBN22D577 https://www.reuters.com/article/us-hongkong-protests-mayday/...

52-6F-62 7y ago
I think your comment can be summed up in: they [read: large holding companies] just don't care because it doesn't affect them. It's pretty much the exact same situation in Toronto. Trying $40k/mo in Midtown in rent alone. It's stupid.
djrogers 7y ago
> most are held by large companies (TEBO) who can write off the losses come tax year because they have other more profitable locations/sites. That’s not how taxes and “write-offs” work. You deduct your expenses from your income, and pay tax on a percentage of what’s left. Having more income is always better than having more expenses.
- Melting_Harps 7y ago
  > That’s not how taxes and “write-offs” work. You deduct your expenses from your income, and pay tax on a percentage of what’s left. Having more income is always better than having more expenses. Does that apply to all properties, including commercial buildings? I only said that because a close friend of Tebo's wife (that's his actual name, and he named his business after himself from striking it big in collectors Coins) was a trainer at the gym I went to and we'd often talk about how all the property surrounding the area was owned by him and a lot are vacant, he said that was her rationale. He could be wrong or made it up, I suppose. He literately is a Feudal Lord in Boulder and has obscene amounts of holdings, its actually alarming how much clout the guy has a result of it and the effect it has on the local population.
- _nalply 7y ago
  You can game taxes. I learnt about two ways, but I am sure there are many more. First you can manage the losses of selected businesses of yours such that you break the tax progression and second if you own the property you rent to yourself (this means to your company) such that the deduction of rent leads to a higher reduction of taxes than the increase by the rent income.
- PaulDavisThe1st 7y ago
  The landlords are gambling. Their bet is that N months with no tenant followed by a tenant paying X% more than the going-rate tenant will net out to more than renting at the going rate. They also bet that by nudging rents higher, they will cumulatively ratchet rents up over time, to the benefit of all landlords (they hope). I don't know how often this bet comes true - it is truly remarkable to see retail properties empty for so long sometimes. But it's just a bet, not a tax strategy.

52-6F-62 7y ago

I think your comment can be summed up in: they [read: large holding companies] just don't care because it doesn't affect them. It's pretty much the exact same situation in Toronto. Trying $40k/mo in Midtown in rent alone. It's stupid.

djrogers 7y ago

> most are held by large companies (TEBO) who can write off the losses come tax year because they have other more profitable locations/sites. That’s not how taxes and “write-offs” work. You deduct your expenses from your income, and pay tax on a percentage of what’s left. Having more income is always better than having more expenses.

Melting_Harps 7y ago
> That’s not how taxes and “write-offs” work. You deduct your expenses from your income, and pay tax on a percentage of what’s left. Having more income is always better than having more expenses. Does that apply to all properties, including commercial buildings? I only said that because a close friend of Tebo's wife (that's his actual name, and he named his business after himself from striking it big in collectors Coins) was a trainer at the gym I went to and we'd often talk about how all the property surrounding the area was owned by him and a lot are vacant, he said that was her rationale. He could be wrong or made it up, I suppose. He literately is a Feudal Lord in Boulder and has obscene amounts of holdings, its actually alarming how much clout the guy has a result of it and the effect it has on the local population.
_nalply 7y ago
You can game taxes. I learnt about two ways, but I am sure there are many more. First you can manage the losses of selected businesses of yours such that you break the tax progression and second if you own the property you rent to yourself (this means to your company) such that the deduction of rent leads to a higher reduction of taxes than the increase by the rent income.
PaulDavisThe1st 7y ago
The landlords are gambling. Their bet is that N months with no tenant followed by a tenant paying X% more than the going-rate tenant will net out to more than renting at the going rate. They also bet that by nudging rents higher, they will cumulatively ratchet rents up over time, to the benefit of all landlords (they hope). I don't know how often this bet comes true - it is truly remarkable to see retail properties empty for so long sometimes. But it's just a bet, not a tax strategy.