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> your tenants pay all the costs of owning and maintaining it, they pay all the taxes, they pay everything To play devil's advocate, what if the tenants are ac
by twelve40 4y ago
> your tenants pay all the costs of owning and maintaining it, they pay all the taxes, they pay everything
To play devil's advocate, what if the tenants are actually fully compensated for that with a rent that would have been much higher across the entire market if the landlords were paying for all that?
> only need to reach 30-40% occupancy by square footage in order to break even, and the unrented portions can be written off for a tax credit
you seem to imply that commercial landlords are raking it, I think? But, afaik (and I'm admittedly not super-familiar with this), commercial real estate is an open, competitive market? So, given that, why doesn't it get flooded with supply of everyone who rushes in to build and collect those fat margins? Maybe there is still something there that makes it not as lucrative as it seems?
- count 4y agoIt's not an open or competitive market. It's a fractured, locality-heavy market that's actually operated more like a cartel in many (especially small to mid size) areas. You are never free to just buy a building and do what you want with it - the City has to vote, approve use, permits, etc. All of which conspire against a 'free' market in any sense. As an example, of the ~30 or so large scale commercial buildings in my local downtown, there's a total of 3-4 owners. You only know this if you know the lawyers who put together the property deals, as each is hidden behind it's own management company and rented through one of 2 commercial real estate management firms (conveniently owned by the same 3 people). There is no 'rush in to build', as there is no land at all remaining in the city to build new on - any construction requires demolition first. Again, permits, historic district permits, etc. all conspire against the newcomer.