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>The above is why you can't negotiate the monthly rent, but you can often get a few months free rent - change the rent you pay and the building value changes, w
by underlipton 2y ago
>The above is why you can't negotiate the monthly rent, but you can often get a few months free rent - change the rent you pay and the building value changes, while a few months free is just a marketing thing.
Residential property owners do this, too, and I strongly (I cannot being to convey how strongly) believe that this should be illegal. Beyond the obvious injury it does to renters and potential renters (annual rent increases are based on the stated rent, not the rate you pay after discounts), so much in the economy is based on purported property value. When you consistently have to offer "discounts" to find renters, what it means is that other aspects of the economy are being distorted by your fake property value. You're misusing or underutilizing that property, and market forces should force you to divest.
Go after banks, too, but start with this simple issue: if you can't rent at a certain price, you should have to lower the price or offer material incentives. Period.
- sroussey 2y agoProperty value pro forma will be based on contracted rents and expectations. Property value based on cash flows will be based on, well, real cash flows. Take the contracted rent or cash flows and divide by the cap rate (tends to follow interest rates) and you get the value. On the pro-forma plan your lowering rents to one implies lowering others and you just cut your building value in half pretty easily.
- underlipton 2y agoOkay. Your building is now worth half of what it used to be. That's capitalism. Hiding value drops distorts the market and makes the balance sheet of property owners seem stronger than it actually is. This "discount" regime essentially pushes the risk of an economic slowdown, which owners should naturally carry, onto renters instead.