4 ms·
Yep, but they don't ever want to admit failure so keep rents high until they are bankrupt. Vacancies do not correlate with pricing for commercial real estate l
by happymellon 3y ago
Yep, but they don't ever want to admit failure so keep rents high until they are bankrupt.
Vacancies do not correlate with pricing for commercial real estate largely because of outside forces.
- lazide 3y agoIt’s one of the factors causing real estate illiquidity - same happens in residential. People really don’t want to materialize losses, and will do anything they can to avoid it. It’s why property prices aren’t falling much in residential yet either, except in markets with marginal owners. And it often works - if it’s just a temporary bump in the road, things recover and blam - they’re rich again. If it keeps up, at least they’ll have a lot of company and they’ll be less likely to be singled out/more likely to get a bailout.
- helen___keller 3y agoAtleast in residential rents can and do drop because a large number of rental properties are small time homeowners whose mortgages are not contingent on maintaining a high rent
- lazide 3y agoIt depends on the market segment. Most areas, high end/luxury type units are owned by the larger commercial investors and have the same issues. Prop mgmt companies have been doing ‘free month of rent’ type deals for a long time to avoid impacting the headline rent rates for that reason. Commercial equivalents are usually the Class A stuff. Class B/C is often owned by individuals or small syndicates.