re: #370 Joe Bacon 🌹

Here we go…won’t be the last chain to stop rent payments…

la.eater.com

The Cheesecake Factory, one of the most popular sit-down restaurant chains in the country, says it will not be able to make upcoming rent payments for any of its storefronts on April 1 because of significant loss of income due to the coronavirus crisis.

There is some concern among those who work in commercial real estate that this could be bad:

Tom Barrack, the Los Angeles real estate tycoon, has a stark review of the commercial property market amid the coronavirus economic meltdown.

“On the brink of collapse.”

[snip]

“The economic impact, magnified by widespread total industry shutdowns throughout the American economy, could be exponentially worse than the economic effects of the 1987 crash, September 11th attacks and 2008 recession, combined. The long-term impact on the economy could be catastrophic.”

Rents stop coming, mortgages can’t be paid, foreclosures come… banks sitting on REO commercial properties is probably not particularly great for anyone (if our experience with them doing that on residential real estate after the ‘08 collapse is any indication).