It sort of is. When a property owner has loan against a commercial property, the lender uses the monthly rent to calculate how much they will loan you. The rent number they use is the last paid rent.
So you, the property owner, end up in a situation where if you lower rent to attract a new tenant, the bank will recalculate your loan, potentially ending in a margin call.
Because you are a heavily leveraged house of cards, a rug pull on a few of these loans could cause a cascade liquidating your commercial inventory. Your business is buy a property, take a loan against it, use that loan to buy a property, etc etc.
Therefore it becomes worth it to carry vacant properties, because they are acting as the stilts holding up your money making properties. The vacancy becomes a cost of doing business, and gets factored into the rent of places that are getting leased.
The current location my office is in, was vacant for 12 years before we signed a lease, owned by a big name commercial real estate firm.
Given what seems like a high rate of vacancies in a lot of markets maybe its time for those landlords to be wiped out, the loans defaulted, and the buildings sell to get back to their real valuations.
But no, we can't have wealthy people lose some money or the banks take a loss, that'd be terrible. We'll just continue crushing the middle class and poor with high rent costs and empty properties.
In an ideal situation, cities should be placing pressure on property owners and businesses to lease out vacant space because otherwise they are effectively offloading the negative externalities of empty space to the city and its tax base. If the city isn't going to outright buy vacant property for the sake of development, then it should heavily tax property owners for leaving said property empty or undeveloped.
That might help a little, but you won't notice. Beating such taxes is done with low value businesses. A mattress store is a typical case, good for holding larger spaces with almost no capital cost: a low overhead business used to hold a retail property until values appreciate. Smaller spaces are held with little clothing stores nobody shops at, or wire transfer shops and such. There is a plethora of such operations holding real estate everywhere, barely breaking even or losing modest amounts of money.
It's compelling to imagine there is some brilliant tax fix for every ill, but investors are a lot more agile than tax authorities; they make their living solving these impediments. Handling food is one the costliest ways to hold a commercial property, so that's rarely how its done.
I don't disagree, but even a low overhead business is still going to be better than an empty storefront (since it means creating some business and employment than none) and a reasonable % of said vacant businesses will be turned into decent value for the community. It's something especially apparent because even the local mattress stores have closed and left said space vacant.
Ok, but you're not going to get a nifty $4 lunch bowl shop. The properties are held until Starbucks or H&R Block or whatever wants to expand. Maybe said tax makes the mattress store reopen with its one minimum wage cashier poking at their phone all day, but you won't get more than that. The investors are holding out for the big money.
The business model works because when a buyer appears looking for numerous sites for expansion, they can deal with a professional investor group that can close deals in a cinch. This greatly lowers costs, because otherwise said buyer has to employ a small army of expensive people and take years to acquire or develop properties themselves. The buyer pays a premium for the value of foregoing all that. The price covers all the years of expenses; minimum wage labor, taxes, upkeep, and a good deal of profit, after years or even decades of squatting.
Nowhere in any of this is there someone with dreams of $4 lunch bowl shops.
> so why would they need to rent to a business with low operating costs
If you're asking why the landlord doesn't just leave the site vacant? They're offsetting costs or obviating vacancy taxes or both. There are a lot of reasons why it's beneficial to keep the lights on and babysit a place.
If you're asking why the landlord minds having a real tenant instead? The landlord doesn't want a real lessor that actually values the location, holds a 10+ year lease, invests money for improvements, makes weird modifications, etc. They want a junk business they can kick to the curb when the time comes.
Often the landlord and the placeholder business are the same, behind the scenes, renting from themselves. No hassle when it's time for the deep pocketed tenant/buyer to move in. All you need is a low cost property manager to look in on the place once a week, make sure the "staff" are actually showing up, and keep the plumbing/heat/electrical working.
> If you're asking why the landlord minds having a real tenant instead?
This
> 10+ year lease
I haven’t had a ton of experience with commercial property, but I have enough to know that at least where I live 10+ year leases aren’t common.
5 is much more common even for businesses spending significant money on buildout.
But also the kind of businesses the article is talking about wouldn’t require extensive buildout, so they would be much more amenable to shorter terms.
There are other reasons $4 lunch bowls are never going to happen in the us. Much higher labor costs (despite what the article said about similar minimum wage) is the biggest one.
> All you need is a low cost property manager to look in on the place once a week, make sure the "staff" are actually showing up, and keep the plumbing/heat/electrical working.
They could do that. Or they could actually make some income by renting it out instead of spending $50-100k on a fake business waiting for a payday that may never come.
There are many locations that are never going to attract a renter with deep pockets. And even in locations that will, it doesn’t take many years running a fake business to erase any eventual profits.
No one sells $4 lunch bowls in the US because no one wants to work for minimum wage for 12 hours a day. The article makes it seem like a great idea, but people in Japan who run these stores work like dogs and live in poverty for their whole lives.
Uber isn't exactly cheap, just cheaper than taxis, which are super-expensive. Kitchen work generally requires some kind of training, often some kind of licensing or certification, and is rarely the cheapest type of labor.
Anyway, the main issue here is population density, not labor availability. If there tens or hundreds of thousands of people working and living in a quarter mile radius and average foot traffic was in hundreds or thousands per hour rather than dozens or less it would likely be easy to sell $4 bowls and make a profit - most of the US is vastly less dense and walkable than that though, even in cities.
Yes, it works. The state that I used to reside in has draconian DUI/Traffic laws, and not coincidentally low traffic death rates.
Driving with license revoked or suspended was a serious charge and resulted in impound of vehicle and mandatory jail time. Repeat offenders would have their vehicles seized.
DUI laws similarly brutal. 2nd time offenders faced potentially life-altering charges and penalties. Get into an accident with injury to another person while DUI? Huge jail time. Felony DUI results in permanent loss of driving privileges.
Speeding 20 over the limit? Enjoy your reckless driving charge which is as serious a dui charge.
I read that getting a license back after a 2nd dui carries and average cost of $50k. Getting 2 dui's within 10 years automatically bumped 2nd dui to felony....no more driving for you.
Lax driving laws and penalties do nothing more than get a lot of people killed.
Perhaps not, but Linux desktop marketshare doubled in 2024. It is still minuscule, but it doesn't take much for a movement like this to take off. Microsoft continues to make Windows 11 impossible to install for the average user up to and including not all that rare scenarios where it cannot be installed at all.
Conversely, 15 minutes to install, fully patched, and ready to go Linux distro is a hugely attractive alternative to Windows. There are 3 viable gaming distros, and the underlying tech continues to evolve. It is already invisible to most games.
Yeah most games, except the ones which rely on KLA.
There aren't _that many_ games in that realm, but most PC gamers play at least one of them a lot.
Without effective KLA support (which would require a locked down Linux aka Gamedroid, for reasons I explain in my other comments) the best you can do is support these mostly non-competitive-multiplayer games. If you have friends who play lots of games, you'll quickly find most of them play at least one game which requires KLA.
The same thing we are doing now: nothing. The poor already aren't customers, and what remains of the middle class is already being priced out of basic necessities.
Have no fear, they are gunning for the upper class, now. A quick glance at big tech gutting their ranks is just the beginning for high wage earners.
History shall repeat itself, and many of those jobs will vanish forever.
I haven't tested the power draw, but I have the mainboard from Framework that I put into a larger ITX case for better cooling.
My main PC is a 7950X3D which has the same core count/threads as the Strix unit, and the Strix benches within margin of error as the 7950X3D. Which is to say the performance is the same.
That you can get the same computer power in a laptop is crazy.
It’s fine for 1440p gaming but you way overpaid for the GPU versus a discrete GPU and a lower end CPU with socketed RAM.
The CPU power of it and the high bandwidth integrated RAM aren’t the right performance trade offs for a gaming workload. Does it work for it? Sure. But you also have a bunch of extra hardware you don’t really need for it.
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