3 ms·
My takeaway (and perhaps I have it wrong too) is that: 1) The bank doesn't have a mortgage on the commercial property, that's the owner/landlord. 2) The bank
by GolfPopper 3y ago
My takeaway (and perhaps I have it wrong too) is that:
1) The bank doesn't have a mortgage on the commercial property, that's the owner/landlord.
2) The bank can tell the owner, "You can't lease this place for less than $100 per square foot".
3) The benefits to the bank from having "this place goes for $100 per square foot" on their books (or, conversely, the negative consequences of not having that one their books) are strong enough to keep the bank locking that rate in place, even if doing so increases the chances of the landlord going bust.
4) Worst self-percieved case for the bank is: "We own a commercial property worth a lot on paper, because on paper it's worth $100 per square foot, which makes it easy to find another buyer."
- entropicdrifter 3y agoKinda smells to me like the banks are trying to engage in price-fixing to keep the commercial real estate market from plummeting too far in value too fast
- DiabloD3 3y agoI have made similar arguments elsewhere on the Internet. I believe this is the right analysis because the best comeback they have is a straw-man along the lines of "why do you hate Capitalism/America/etc?" I really can't wait until the Big Bank/Big Real Estate cartel gets busted over this; they almost did in 2008 during the crash and somehow wiggled out of it with minimal losses, while bankrupting Greece, almost bankrupting Spain, and setting back the US economy a decade.