>You hear this kind of thing constantly, but it's such an absurd claim. Imagine being a property owner and having two choices: (a) having a property you own accrue value over time, and (b) the exact same thing as before, but also getting paid hard cash by renters. And the claim is somehow that you will, because of your landlord greed (?!) take the door with less money.
Maybe? I vaguely reading somewhere that some NYC commercial landlords would rather keep a building empty after the pandemic rather then lower the rents.
IIRC part of the reason was because the building's possible rental income was used as part of building's valuation. The higher the potential income, the higher the valuation is, and looking more attractive as collateral on a loan. Hence the problem being that if they did lower the actual rent, it would lower the building's valuation and negatively impact whatever loans they had using the property as leverage. More so then any loss of any rental income.
No idea how true it is, seems a little ponzi like for me, and eventually you do need to come up with some sort of income if nothing else to make interest payments. On the other hand I don't know enough about financial world to say otherwise, so it could be very well true.
Maybe? I vaguely reading somewhere that some NYC commercial landlords would rather keep a building empty after the pandemic rather then lower the rents.
IIRC part of the reason was because the building's possible rental income was used as part of building's valuation. The higher the potential income, the higher the valuation is, and looking more attractive as collateral on a loan. Hence the problem being that if they did lower the actual rent, it would lower the building's valuation and negatively impact whatever loans they had using the property as leverage. More so then any loss of any rental income.
No idea how true it is, seems a little ponzi like for me, and eventually you do need to come up with some sort of income if nothing else to make interest payments. On the other hand I don't know enough about financial world to say otherwise, so it could be very well true.