Quote:
Originally Posted by Weitz
That would require the commercial renters to lower their prices.. from my understanding that hasn’t happened a whole lot. We moved from a sublease to another sublease because the rates right from the building weren’t good at all.
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It's a tricky situation, for a lot of landlords they have reached their floor on what they can lease space out at and still get any return, particularly when competing with sublease space.
Imagine you owned a condo and the mortgage payment was $1,500/mth and you're looking to rent it out. The rental market crashes from the time you bought it and now you can only rent $1,200/mth so now you're taking a bath on it.
To makes things worse let's assume there is another condo in your building that's debt-free and the owner just wants to recovery utilities plus a little cash flow so they will rent it for $300/mth.
That's essentially the market we are in. A lot of landlords can't do negative return deals and the sublease market can so they get the action.