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Current market prices for a lot of commercial real estate seems to be a ponzi scheme especially in the US. It is not in the interest of any of the players to de

Current market prices for a lot of commercial real estate seems to be a ponzi scheme especially in the US. It is not in the interest of any of the players to decrease prices only the renters. Local government need higher prices as without the high property prices their property tax receipt will tank making them unable to meet their budgets. Banks need higher prices as they are highly leveraged and will be on the hook for billions. Same for most landlords they cant decrease the rent too much as that would decrease the value of the property and make the bank come after them to top up as they are also leveraged. Then we have got black money parked in real estate of western countries where such owners do not care much about rental income they are okay with their money being safe so dont care about renting. Then we got the countries themselves they turn a blind eye to this black money parked in their countries as it helps their economies. Plus if the black money/corruption money is from a politically exposed person they are able to be controlled/blackmailed by the 3 letter agencies of these countries.

bell-cot 3y ago
Ponzi scheme? Yes. Lots of major players who really don't want the Ponzi pyramid to collapse? Yes. But, long-term, no Ponzi pyramid can avoid collapse. Black money is not infinite, and can get skittish when the music starts fading. A central bank printing money can prop the pyramid up...for a while. But that only makes the collapse bigger, and takes more of the central bank's economy down with it when it finally does go.
- ChuckNorris89 3y ago
  >But, long-term, no Ponzi pyramid can avoid collapse. Both politicians and industry leaders know it will inevitably pop at some point, but since they have short terms while they're in charge and won't be accountable for long term consequences of their actions, they just want to make sure it doesn't collapse while they're in power, so they keep kicking the can down the road as long as their short tenure last, then it becomes the next guy's problem, rinse and repeat. They're hopeful they can make the problem big enough that the government will have to bail them out when it crashes. It's a result of chasing maximized short term returns at the expense of long term consequences in a zero accountability system. Basically, it's what our system rewards.
- kryogen1c 3y ago
  >> Current market prices for a lot of commercial real estate seems to be a ponzi scheme > Ponzi scheme? Yes. How in the world are these the top comment and top reply? Commercial real estate isn't a ponzi scheme. Like, at all. In any way, shape, or form. There are disparate actors making separate, uncoordinated decisions. There are single transactions being made delivering real value. There's no long term holdings falsely being promised under the guise of stealing short term value by adding more customers. The commercial real estate market changed. Money is going to be lost. There are bad contracts on the books. Correlated markets are going to suffer. Leveraged losses are going to exponentiate. None of this has anything to do with a ponzi scheme.
  - simple-thoughts 3y ago
    In common parlance, an asset bubble is called a Ponzi scheme. Actual Ponzi schemes should be referred to as “rob peter to pay Paul” scams to prevent confusion.
    - deleted 3y ago
      [deleted]
    - CydeWeys 3y ago
      Or we could just use the actual definitions of words rather than make everything worse and harder to follow along with.
      - yazaddaruvala 3y ago
        Or we could just be flexible and evolve with any reasonable colloquialisms of the time.
        Atheros 3y ago
        In a ponzi scheme, some actors go to jail for the rest of their lives and in a speculative bubble they do not. There are good reasons to have separate words for these separate concepts. Dishonest people will always use hyperbole when describing the world. That hyperbole is not justification for honest people to abandon technical definitions. And that is what you are proposing. Having everyone "evolve" on the definition of 'ponzi scheme' means that the current definition is erased. But the current definition is still in use!
- cpuguy83 3y ago
  Tell that to Seattle and Amazon. I have little doubt that Amazon's back to work is about real estate and tax revenue for the city.
  - seanmcdirmid 3y ago
    I doubt it: Amazon isn’t on good terms with Seattle’s city government. They wouldn’t mandate RTO if it wasn’t in their self interest, Amazon isn’t one for needless charity.
williamcotton 3y ago
How is it a ponzi scheme? There is actual real estate being bought, sold and rented. What has happened is that demand for office space has dropped dramatically. The proper market reaction is to spend the money to convert these office spaces to some other use, perhaps residential. Then these properties will more likely find tenants.
- breckenedge 3y ago
  > How is it a ponzi scheme? Because it’s credit built on credit. It’s not an intentional Ponzi scheme (maybe). > The proper market reaction is to spend the money to convert these office spaces to some other use, perhaps residential. It’ll be prohibitively expensive for most properties to convert them to residential. They might as well be demolished for their land value.
  - deleted 3y ago
    [deleted]
  - Jabrov 3y ago
    That still doesn’t make it a Ponzi scheme. Don’t just throw the word around.
    - capitalsigma 3y ago
      Ponzi scheme is when the price collapses for something that I don't like, and the more that I don't like it the Ponzi-er it is
      - dmoy 3y ago
        That is not what a ponzi scheme is
- m0llusk 3y ago
  high demand, limited inventory, fifteen years of near zero interest rates mean prices have been set in a market environment of extreme distortion
cowsandmilk 3y ago
> Local government need higher prices as without the high property prices their property tax receipt will tank making them unable to meet their budgets. California is the only state facing this due to Prop 13. Most jurisdictions are able to adjust real estate tax rates in response to the drop in valuations and many did so when property values dropped in the Great Recession.
- seanmcdirmid 3y ago
  A lot of jurisdictions work on a budget: they need X dollars from property taxes, and use your assessed value to determine the rate they need to get X dollars. So if a recession hits, your property taxes don’t go down even if your home falls in value (your rate simply goes up). In a housing boom, your property value goes up, but so does everyone else’s, since X is fixed your rate goes down.
- deleted 3y ago
  [deleted]
- smugma 3y ago
  It’s the opposite in California. Even if prices drop 30%, if a property wasn’t traded in the last few (5-7?) years, it’s probably worth more than the assessed value.
quags 3y ago
Property taxes won’t change if these values collapse. A city may reassess values in the future but that just means some people go up and some go down with the final receipts the same. An owner may walk away from a Mortage and the bank will pay the taxes. If taxes are not paid you move into tax liens that trade and may be able to get the property just for the taxes on it. In the end property taxes get paid.
- dantheman 3y ago
  How do receipts stay the same?
  - ddkto 3y ago
    Property taxes are usually set as a fixed amount to be collected, and the tax % is back calculated. In practice, this means that the only thing that matters is the value of a property relative to the rest of the city.
    - Scoundreller 3y ago
      Does the US use the same rates for all property types? At least in Canada (and in Sim City 2000…), the tax % is different for residential, commercial, industrial and often subcategorized further.
      - quags 3y ago
        In my state it varies by town so nothing that covers the entire US.
    - lisper 3y ago
      That may be what “usually” happens but in california, which is a major commercial real estate market, we have this thing called proposition 13 which screws up everything.
  - quags 3y ago
    Taxes don’t change on the day to day swings of the properly value of the house. There is a set value and a set rate regardless of the worth of the house. Now it could be every 10 years a city needs to re-assess. So they go and value all the houses then they make a tax rate that gets to what the tax amount will be. So some go up and some go down based on the new value. There are some outliers - your taxes may change if you expand your house under a permit or so some upgrades. If you buy a house and believe its value is too high you can try to argue the total amount to lower the taxes. But nothing automatically is happening that is lowering anyone’s price except a total reassessment of the area. This is how gentrified areas may push people out with high taxes because a reassess changed the total tax amount and then your house may suddenly need to pay substantially more taxes * except in California as they have different laws.
andsoitis 3y ago
> Current market prices for a lot of commercial real estate seems to be a ponzi scheme especially in the US A ponzi scheme is fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors. Where is the nonexistent enterprise? How is money from later investors used to hoodwink the first investors by pretending there's quick returns? I think you are looking for a different characterization of commercial real estate for it isn't a ponzi scheme.
- klodolph 3y ago
  > A ponzi scheme is fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors. If you’re going to copy/paste a dictionary definition, you should probably cite the dictionary you are using (Oxford, it looks like). I think the correct term here is “speculative bubble”, but there are deep similarities between a speculative bubble and a Ponzi scheme. The similarities run deep enough that I do not think it is worth fighting over the difference between a Ponzi scheme and a speculative bubble. In both a speculative bubble and a Ponzi scheme, early investors are paid out with funds taken from later investors, for an asset which does not have enough utility to justify those payouts. In a Ponzi scheme, it’s one person or entity running it, and in a speculative bubble, it’s just “the market”. But the market is just a bunch of people. And I don’t think the bad faith component of Ponzi schemes should be considered a necessary component.
  - dragonwriter 3y ago
    > I think the correct term here is “speculative bubble”, but there are deep similarities between a speculative bubble and a Ponzi scheme. There are deep differences, too, most obviously the one highlighted by the “scheme” in ponzi scheme. > In both a speculative bubble and a Ponzi scheme, early investors are paid out with funds taken from later investors, for an asset which does not have enough utility to justify those payouts. In a ponzi scheme, money is deliberately directed to early entrants to cover the conscious absence of any mechanism to produce actual value. That's not true of speculative bubble; yes, the usual market mechanisms involve movers out of market get money from those moving in, but outside of fraud (which can make usual market action ponzi-like) its not conscious cover for an absence of a return-generating mechanism. Yes, a ponzi-operator produces deliberately a conditions similar to that which is retrospectively observed when the market misperceives value for a time, but that's the same as saying fatal accidents produce the same results as murder plots. We call them different things for good reason, and it is worth distinguishing them. > And I don’t think the bad faith component of Ponzi schemes should be considered a necessary component. Someone having advance and certain knowledge of the absence of return mechanism is quite relevant and distinct from a market misperception, especially when looking at a prospective bubble that hasn’t popped (so its the differences between “there is specific concrete evidence someone engineered this fraudulently” and “my perception of the future differs from the consensus”.) Redefining terms so you can use terms that communicate greater certainty and have higher emotional valence than is warranted by what you are actually describing is bad, in much the same way as an (actual, proper definition) ponzi is bad. Its an attempt to mislead and motivate action based on misleading people.
comboy 3y ago
I don't disagree, but on the other hand, so is the fiat money. Precious metals market is somewhat complicated and prone to manipulation. So real estate provides solid value that won't go away (simplifying). Groceries and such production keeps getting optimized with quality decreasing, I think the real inflation is not that easy to estimate.
BeFlatXIII 3y ago
Those are all reasons why I hope the crash is as big as possible. Let's enjoy the show.
- snow_mac 3y ago
  This is a stupid response. Remember 2009 when the housing bubble popped and it effected the entire economy? With billions tied up in commercial real estate, it will have a wider impact then just office buildings and retail locations
  - grepfru_it 3y ago
    some people just want to watch the world burn
    - deleted 3y ago
      [deleted]
    - JumpCrisscross 3y ago
      Almost nobody does. A lot of immature people think they do, because they’re not aware that it can get much, much worse for them without getting too bad for the people they hate.
      - eastbound 3y ago
        Some people are suicidal. And the opposite of suicidal, the “carpe diem” idea, rather hedonist, is equivalent in that they believe in “no tomorrow”. A lot of people suffer dissociation since Trump, which was crystallized in The Joker movie. Or perhaps it was due to social media. In any case, wanting to “see the world burn” is a recurrent idea, I’d like a study on how many people seriously adopt this attitude.
  - nine_zeros 3y ago
    > This is a stupid response. Remember 2009 when the housing bubble popped and it effected the entire economy? With billions tied up in commercial real estate, it will have a wider impact then just office buildings and retail locations A lot of people are so disenfranchised from the wealth that the world could crash and they could care less. They are already at the bottom with nothing to lose. Such is the inequality in America these days.
eduction 3y ago
You are right that that there are too many incentives for trusted players to delay acknowledging reality (even if people are quibbling with the word “ponzi”). I am reminded of the scenes in Big Short when the banks for some time refuse to acknowledge reality and write down their mortgage bond positions. Usually this sort of soft corruption is dealt with in real estate by incentives. For example the developer offers to pay your HOA fees for a year or two, or throw in some appliances, or whatever. The goal is always to artificially support a higher price through a back door discount that won’t devalue the whole building. There are commercial real estate equivalents to this like the developer paying for more customizations and improvements to the office space which are typically borne by tenants. But my reckoning is this downturn is way too big and fundamental for those stunts to be enough. If it’s true office real estate values have not been written down then I suspect we are in for a shit show when everyone is forced to acknowledge reality. (I am not in real estate but spoke regularly to industry folks and wrote reports during the last boom 2002-2008)
onlyrealcuzzo 3y ago
> It is not in the interest of any of the players to decrease prices only the renters. They don't have to increase rents as long as values kept increasing. If office values go up x% per year, even if you're steeply cash-flow negative, as long as you're adequately leveraged and have low interest rates, you're still probably printing money. It's almost as if artificially low interest rates manipulated the economy.
lost_tourist 3y ago
It's price gouging and they are trying to hold out as long as possible, but eventually they will have to give in and accept that they need to use the space for something different and/or drop the rent.

bell-cot 3y ago

Ponzi scheme? Yes. Lots of major players who really don't want the Ponzi pyramid to collapse? Yes. But, long-term, no Ponzi pyramid can avoid collapse. Black money is not infinite, and can get skittish when the music starts fading. A central bank printing money can prop the pyramid up...for a while. But that only makes the collapse bigger, and takes more of the central bank's economy down with it when it finally does go.

ChuckNorris89 3y ago
>But, long-term, no Ponzi pyramid can avoid collapse. Both politicians and industry leaders know it will inevitably pop at some point, but since they have short terms while they're in charge and won't be accountable for long term consequences of their actions, they just want to make sure it doesn't collapse while they're in power, so they keep kicking the can down the road as long as their short tenure last, then it becomes the next guy's problem, rinse and repeat. They're hopeful they can make the problem big enough that the government will have to bail them out when it crashes. It's a result of chasing maximized short term returns at the expense of long term consequences in a zero accountability system. Basically, it's what our system rewards.
kryogen1c 3y ago
>> Current market prices for a lot of commercial real estate seems to be a ponzi scheme > Ponzi scheme? Yes. How in the world are these the top comment and top reply? Commercial real estate isn't a ponzi scheme. Like, at all. In any way, shape, or form. There are disparate actors making separate, uncoordinated decisions. There are single transactions being made delivering real value. There's no long term holdings falsely being promised under the guise of stealing short term value by adding more customers. The commercial real estate market changed. Money is going to be lost. There are bad contracts on the books. Correlated markets are going to suffer. Leveraged losses are going to exponentiate. None of this has anything to do with a ponzi scheme.
- simple-thoughts 3y ago
  In common parlance, an asset bubble is called a Ponzi scheme. Actual Ponzi schemes should be referred to as “rob peter to pay Paul” scams to prevent confusion.
  - deleted 3y ago
    [deleted]
  - CydeWeys 3y ago
    Or we could just use the actual definitions of words rather than make everything worse and harder to follow along with.
    - yazaddaruvala 3y ago
      Or we could just be flexible and evolve with any reasonable colloquialisms of the time.
      - Atheros 3y ago
        In a ponzi scheme, some actors go to jail for the rest of their lives and in a speculative bubble they do not. There are good reasons to have separate words for these separate concepts. Dishonest people will always use hyperbole when describing the world. That hyperbole is not justification for honest people to abandon technical definitions. And that is what you are proposing. Having everyone "evolve" on the definition of 'ponzi scheme' means that the current definition is erased. But the current definition is still in use!
cpuguy83 3y ago
Tell that to Seattle and Amazon. I have little doubt that Amazon's back to work is about real estate and tax revenue for the city.
- seanmcdirmid 3y ago
  I doubt it: Amazon isn’t on good terms with Seattle’s city government. They wouldn’t mandate RTO if it wasn’t in their self interest, Amazon isn’t one for needless charity.

williamcotton 3y ago

How is it a ponzi scheme? There is actual real estate being bought, sold and rented. What has happened is that demand for office space has dropped dramatically. The proper market reaction is to spend the money to convert these office spaces to some other use, perhaps residential. Then these properties will more likely find tenants.

breckenedge 3y ago
> How is it a ponzi scheme? Because it’s credit built on credit. It’s not an intentional Ponzi scheme (maybe). > The proper market reaction is to spend the money to convert these office spaces to some other use, perhaps residential. It’ll be prohibitively expensive for most properties to convert them to residential. They might as well be demolished for their land value.
- deleted 3y ago
  [deleted]
- Jabrov 3y ago
  That still doesn’t make it a Ponzi scheme. Don’t just throw the word around.
  - capitalsigma 3y ago
    Ponzi scheme is when the price collapses for something that I don't like, and the more that I don't like it the Ponzi-er it is
    - dmoy 3y ago
      That is not what a ponzi scheme is
m0llusk 3y ago
high demand, limited inventory, fifteen years of near zero interest rates mean prices have been set in a market environment of extreme distortion

cowsandmilk 3y ago

> Local government need higher prices as without the high property prices their property tax receipt will tank making them unable to meet their budgets. California is the only state facing this due to Prop 13. Most jurisdictions are able to adjust real estate tax rates in response to the drop in valuations and many did so when property values dropped in the Great Recession.

seanmcdirmid 3y ago
A lot of jurisdictions work on a budget: they need X dollars from property taxes, and use your assessed value to determine the rate they need to get X dollars. So if a recession hits, your property taxes don’t go down even if your home falls in value (your rate simply goes up). In a housing boom, your property value goes up, but so does everyone else’s, since X is fixed your rate goes down.
deleted 3y ago
[deleted]
smugma 3y ago
It’s the opposite in California. Even if prices drop 30%, if a property wasn’t traded in the last few (5-7?) years, it’s probably worth more than the assessed value.

quags 3y ago

Property taxes won’t change if these values collapse. A city may reassess values in the future but that just means some people go up and some go down with the final receipts the same. An owner may walk away from a Mortage and the bank will pay the taxes. If taxes are not paid you move into tax liens that trade and may be able to get the property just for the taxes on it. In the end property taxes get paid.

dantheman 3y ago
How do receipts stay the same?
- ddkto 3y ago
  Property taxes are usually set as a fixed amount to be collected, and the tax % is back calculated. In practice, this means that the only thing that matters is the value of a property relative to the rest of the city.
  - Scoundreller 3y ago
    Does the US use the same rates for all property types? At least in Canada (and in Sim City 2000…), the tax % is different for residential, commercial, industrial and often subcategorized further.
    - quags 3y ago
      In my state it varies by town so nothing that covers the entire US.
  - lisper 3y ago
    That may be what “usually” happens but in california, which is a major commercial real estate market, we have this thing called proposition 13 which screws up everything.
- quags 3y ago
  Taxes don’t change on the day to day swings of the properly value of the house. There is a set value and a set rate regardless of the worth of the house. Now it could be every 10 years a city needs to re-assess. So they go and value all the houses then they make a tax rate that gets to what the tax amount will be. So some go up and some go down based on the new value. There are some outliers - your taxes may change if you expand your house under a permit or so some upgrades. If you buy a house and believe its value is too high you can try to argue the total amount to lower the taxes. But nothing automatically is happening that is lowering anyone’s price except a total reassessment of the area. This is how gentrified areas may push people out with high taxes because a reassess changed the total tax amount and then your house may suddenly need to pay substantially more taxes * except in California as they have different laws.

andsoitis 3y ago

> Current market prices for a lot of commercial real estate seems to be a ponzi scheme especially in the US A ponzi scheme is fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors. Where is the nonexistent enterprise? How is money from later investors used to hoodwink the first investors by pretending there's quick returns? I think you are looking for a different characterization of commercial real estate for it isn't a ponzi scheme.

klodolph 3y ago
> A ponzi scheme is fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors. If you’re going to copy/paste a dictionary definition, you should probably cite the dictionary you are using (Oxford, it looks like). I think the correct term here is “speculative bubble”, but there are deep similarities between a speculative bubble and a Ponzi scheme. The similarities run deep enough that I do not think it is worth fighting over the difference between a Ponzi scheme and a speculative bubble. In both a speculative bubble and a Ponzi scheme, early investors are paid out with funds taken from later investors, for an asset which does not have enough utility to justify those payouts. In a Ponzi scheme, it’s one person or entity running it, and in a speculative bubble, it’s just “the market”. But the market is just a bunch of people. And I don’t think the bad faith component of Ponzi schemes should be considered a necessary component.
- dragonwriter 3y ago
  > I think the correct term here is “speculative bubble”, but there are deep similarities between a speculative bubble and a Ponzi scheme. There are deep differences, too, most obviously the one highlighted by the “scheme” in ponzi scheme. > In both a speculative bubble and a Ponzi scheme, early investors are paid out with funds taken from later investors, for an asset which does not have enough utility to justify those payouts. In a ponzi scheme, money is deliberately directed to early entrants to cover the conscious absence of any mechanism to produce actual value. That's not true of speculative bubble; yes, the usual market mechanisms involve movers out of market get money from those moving in, but outside of fraud (which can make usual market action ponzi-like) its not conscious cover for an absence of a return-generating mechanism. Yes, a ponzi-operator produces deliberately a conditions similar to that which is retrospectively observed when the market misperceives value for a time, but that's the same as saying fatal accidents produce the same results as murder plots. We call them different things for good reason, and it is worth distinguishing them. > And I don’t think the bad faith component of Ponzi schemes should be considered a necessary component. Someone having advance and certain knowledge of the absence of return mechanism is quite relevant and distinct from a market misperception, especially when looking at a prospective bubble that hasn’t popped (so its the differences between “there is specific concrete evidence someone engineered this fraudulently” and “my perception of the future differs from the consensus”.) Redefining terms so you can use terms that communicate greater certainty and have higher emotional valence than is warranted by what you are actually describing is bad, in much the same way as an (actual, proper definition) ponzi is bad. Its an attempt to mislead and motivate action based on misleading people.

comboy 3y ago

I don't disagree, but on the other hand, so is the fiat money. Precious metals market is somewhat complicated and prone to manipulation. So real estate provides solid value that won't go away (simplifying). Groceries and such production keeps getting optimized with quality decreasing, I think the real inflation is not that easy to estimate.

BeFlatXIII 3y ago

Those are all reasons why I hope the crash is as big as possible. Let's enjoy the show.

snow_mac 3y ago
This is a stupid response. Remember 2009 when the housing bubble popped and it effected the entire economy? With billions tied up in commercial real estate, it will have a wider impact then just office buildings and retail locations
- grepfru_it 3y ago
  some people just want to watch the world burn
  - deleted 3y ago
    [deleted]
  - JumpCrisscross 3y ago
    Almost nobody does. A lot of immature people think they do, because they’re not aware that it can get much, much worse for them without getting too bad for the people they hate.
    - eastbound 3y ago
      Some people are suicidal. And the opposite of suicidal, the “carpe diem” idea, rather hedonist, is equivalent in that they believe in “no tomorrow”. A lot of people suffer dissociation since Trump, which was crystallized in The Joker movie. Or perhaps it was due to social media. In any case, wanting to “see the world burn” is a recurrent idea, I’d like a study on how many people seriously adopt this attitude.
- nine_zeros 3y ago
  > This is a stupid response. Remember 2009 when the housing bubble popped and it effected the entire economy? With billions tied up in commercial real estate, it will have a wider impact then just office buildings and retail locations A lot of people are so disenfranchised from the wealth that the world could crash and they could care less. They are already at the bottom with nothing to lose. Such is the inequality in America these days.

eduction 3y ago

You are right that that there are too many incentives for trusted players to delay acknowledging reality (even if people are quibbling with the word “ponzi”). I am reminded of the scenes in Big Short when the banks for some time refuse to acknowledge reality and write down their mortgage bond positions. Usually this sort of soft corruption is dealt with in real estate by incentives. For example the developer offers to pay your HOA fees for a year or two, or throw in some appliances, or whatever. The goal is always to artificially support a higher price through a back door discount that won’t devalue the whole building. There are commercial real estate equivalents to this like the developer paying for more customizations and improvements to the office space which are typically borne by tenants. But my reckoning is this downturn is way too big and fundamental for those stunts to be enough. If it’s true office real estate values have not been written down then I suspect we are in for a shit show when everyone is forced to acknowledge reality. (I am not in real estate but spoke regularly to industry folks and wrote reports during the last boom 2002-2008)

onlyrealcuzzo 3y ago

> It is not in the interest of any of the players to decrease prices only the renters. They don't have to increase rents as long as values kept increasing. If office values go up x% per year, even if you're steeply cash-flow negative, as long as you're adequately leveraged and have low interest rates, you're still probably printing money. It's almost as if artificially low interest rates manipulated the economy.

lost_tourist 3y ago

It's price gouging and they are trying to hold out as long as possible, but eventually they will have to give in and accept that they need to use the space for something different and/or drop the rent.