4 ms·
That's not really comparable at all. Most retailers, banks, and companies realized that owning realestate is not part of their core competency. Canadian tire
by chollida1 3y ago
That's not really comparable at all.
Most retailers, banks, and companies realized that owning realestate is not part of their core competency. Canadian tire rolled their realestate into a REIT and then rents the locations back.
There's no double dealing or anything nefarious about it. Heck there is a huge company called Brookfield that has made a living out of buying commercial realestate from companies and renting it back to them while spining the realestate out into a REIT.
That's just smart business for the company who gets money upfront and a stable knowing rental price.
- angus-prune 3y agoI agree it's common and not underhanded. But it's not always smart business. Most commercial tenants are still resonsibile for maintenance, which is the primary ongoing expertise. It can be a useful way to free up capital, but only useful if it's used to expand the business and deliver a greater return. Too often it's used to artificially increase the share price or pay out dividend. In these cases the company commits to never ending rent payments for no actual benefit. There are whole bunch of businesses who have bucked this MBA trend, kept their freeholds and have ended up with a more resilient business better able to weather a change of economic circumstances.