I don’t usually post stuff from rip off news.com but this got me
“Those landlords might prefer to have a space sit empty rather than drop the asking rent, which would impact the value of their asset.”
That’s broken af
I don’t usually post stuff from rip off news.com but this got me
“Those landlords might prefer to have a space sit empty rather than drop the asking rent, which would impact the value of their asset.”
That’s broken af
The link between rental values and sales values is a real phenomenon. It would not be a landlord with a single property but with several properties in the district whose values they are trying to buoy.
I heard Marcus Westbury describe his Renew Newcastle project thus. His team offered low rent to corporations for disused shops in the CBD. They were playing go-between for creative types who wanted to start a novel business.
The corporations preferred to keep the shops empty so that the property value in the district would not fall.
Council wouldn’t play ball either but for them the fear was not being able to reclaim the buildings when needed because of tenancy rights.
Ironically it was corporations who were more cooperative in the end. Marcus and his team hired a lawyer who arranged for a contract where the corporation would charge a tiny token amount (something like $50 per month) and the tenants would vacate with short no-cause (four weeks) notice.
CEO’s enjoyed supporting quirky shops and the project revived the district, resulting in an increase in property prices (unfortunately spelling the end for most of the budding entrepreneurs but IIRC some were able to afford proper rent and continue).
Yeah I definitely think about this too. A string of vacant shops is like a cancer to a shopping strip: they just keep growing and growing in number.
OTOH if you lowered the rent temporarily to fill the shops, basically wouldn’t it be a case of a rising tide lifting all boats as you reinvigorate the area?
Shopping centres might do that or offer other incentives maybe like paying for advertising costs or something. If the shops are owned independently like the article’s example then it’s a bit harder because they need to cooperate.