4 ms·
New York has solved this by keeping the offices valued at the same price but just letting them sit empty.
by claaams 3y ago
New York has solved this by keeping the offices valued at the same price but just letting them sit empty.
- iinnPP 3y agoSometimes there are tax incentives to this. And the homeless population keeps going up.
- christkv 3y agoI remember there being some weird financial thing causing that as offering low rental prices could trigger loan conditions
- baremetal 3y agoWhen commercial loans are renewed (and they are because commercial loans are usually rolled over and not paid off, ie interest only) things like the occupancy rate, rent cost, creditworthiness of lessees and other things are factored into the new loan terms. So if the rental rate is lower then interest will be higher on the loan. Or the loan provider will okay a smaller portion of the loan requiring you to cough up the difference. Example a $10m building, you put $1m down on. You go to refinance the loan and they are only willing to float you $7m now because you arent able to charge as much rent to tenants. Thus requiring you to come up with $2m or lose your $1m investment and the building.
- christkv 3y agoThat was it :) creating an incentive to not rent out space at all. Probably even worse now with the high fed rate