3 ms·
> for no other reason than to avoid setting a precedent for lower rents even when it wasn't financially necessary. I agree with your virtiol, but this isn't qu
by bsder 3y ago
> for no other reason than to avoid setting a precedent for lower rents even when it wasn't financially necessary.
I agree with your virtiol, but this isn't quite correct.
You can tack "missing" rent onto the end of your financial agreement without penalty. "Lower" rent causes a reevaluation of the financial agreement basis which will almost always require a cash outlay. This is what is causing commercial real estate to be empty for 5+ years rather than lower the damn rent.
Municipalities need to implement an (in?)occupancy tax to stomp this crap out. If real estate isn't generating rent for 12+ months, tax needs to start going up on the space.
- smugma 3y agoSF has a Commercial Vacancy Tax, for properties unoccupied for 182+ days a year. My guess is that it is not well-defined and therefore generates minimal revenue. I also can't tell if this applies to office buildings or is more for street level commercial real estate.