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Stupid Greed

Discussion in 'General Property Chat' started by hammer, 21st Feb, 2016.

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  1. hammer

    hammer Well-Known Member

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    RANT!
    A mate of mine owns a restaurant in the city. It's in an old ****ty arcade that's mostly empty except for his restaurant that's been there forever and runs through word of mouth (food is amazing).

    Anyway he's thinking about moving because the landlord keeps putting the rent up.

    I don't get it? Why would you do that as a landlord? Why squeeze one of your last remaining Tennants?

    If the arcade was booming i'd get it. But the arcade, heck...most of the city is now empty.

    Stupid and sad.
     
  2. ellejay

    ellejay Well-Known Member

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    Is this happening in Darwin?
     
  3. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Perhaps the landlord wants everyone out so it can be redeveloped?
     
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  4. CU@THETOP

    CU@THETOP Well-Known Member

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    It get's to the point where the landlord will squeeze to the max but then the business simply can't afford it and will shut shop. I had one client years ago running a fish and chip shop. Wiley Greek landlord offered a new term a few months from the expiry date on a much increased rental. Client said "no can do - I'm not making enough". Landlord- as most are when they hear this are disbelieving and refuses to move.
    Landlord rolls up on last day no doubt to negotiate and to his horror tenant has stripped the tenancy back to original state (as required under the lease) including ripping up tiling installed by the tenant. "stop! stop!" but it was all too late. Client vacated and went to work elsewhere and tenancy sat vacant for a long time.
    I tell tenant clients to commence negotiations a year out from the expiry date and start looking elsewhere as a backup plan.
    Like most things the more options you have the better negotiating position you are in.
     
    hammer likes this.
  5. Scott No Mates

    Scott No Mates Well-Known Member

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    If it's cheaper for him to stay in a sh!#y arcade than a shiny newer one where he will need to do a fitout and worry about loss of goodwill, he'll stay put.

    From the LL POV, bleed it baby then sell or redevelop. Tenant's payments probably very cf+ for the LL.
     
  6. York

    York Finance Broker Business Member

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    Exactly what I was thinking. Not uncommon for landlords in commercial to do this when there is no demolition clause.
     
  7. hammer

    hammer Well-Known Member

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    Doubt it. This is in Darwin and the town is in trouble. Commercial vacancy rate is higher than 20 percent and climbing. Would be a most brave developer to redevelop now.

    I think that it is just greed and hubris. This story is playing out all over town as the small businesses adjust to the downturn quicker than the landlords.. Sad.
     
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  8. Chilliblue

    Chilliblue Well-Known Member

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    Sometimes a valuer will place a higher $value on a vacancy rather than a sitting tenant below perceived market rates.
     
  9. TMNT

    TMNT Well-Known Member

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    Even thou th i dont believe in karma

    Damn. But i love it when karma hits