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They're going to lose the buildings eventually when the loans need to be refinanced at much higher interest rates while commanding much lower rents.
by khuey 3y ago
They're going to lose the buildings eventually when the loans need to be refinanced at much higher interest rates while commanding much lower rents.
- varenc 3y agoThis is my take too. The strictness of the tenant rent requirements seem like a "bug" in the lease agreement. In a situation like this where there's a massive downturn in office rental value and not much expectation it'll lift any time soon, it seems in both parties benefit by allowing lower rents. Locking commercial tenants in 5-10 year leases at current market rates will probably mean the building owner defaults on their debt, but that seems inevitable.