Landlord upping rent 40%

[Galdorf]

7 year lease is up he wants to raise the rent 40% says he needs to put it at market value looks like i am going to have to find another place.
What he is really trying to do is make up for the 2 empty spots one is 6000 sq ft other 2500 that are vacant because he tried to do the same to them.
no lack of empty spots in area so many businesses have closed down lots of empty buildings in the area almost all of the furniture and electronics stores have closed up as well as book stores.

 

[Your PCMD]

You said it yourself, your going to have to find another location. If there are so many buildings empty, shouldnt be too hard for you to find one and probably at a lower cost because generally, landlords just want the income. You could just tell you landlord that any increase is not justified, its not up to you to make up his/her loss in revenue.

 

[Moltuae]

What he is really trying to do is make up for the 2 empty spots one is 6000 sq ft other 2500 that are vacant because he tried to do the same to them.

Have you tried telling him that he's soon to have another empty spot if he increases your rent?

If he's struggling to rent spaces, seems to me that you're the one in the bargaining position. I think I'd be asking him for a rent reduction.

 

[lcoughey]

When the economy is tight, a bird in the hand is better than two in the bush. Your landlord isn't too swift, if he thinks this will end well for him and his pocket book...unless he is trying to empty his facility because of a potential tenant who wants it all.

 

[ChrisTech]

Although if so many stores are closing in the area, is the area going downhill for some reason?

 

[nlinecomputers]

unless he is trying to empty his facility because of a potential tenant who wants it all.

But if that was the case wouldn't he just not renew at all? I'm sorry, your lease is up and I am selling. Here is your eviction notice.

 

[nlinecomputers]

Have you tried telling him that he's soon to have another empty spot if he increases your rent?

If he's struggling to rent spaces, seems to me that you're the one in the bargaining position. I think I'd be asking him for a rent reduction.

I'd get something lined up and then tell him you are moving out but will stay if he reduces the current rent 10%.

 

[NYJimbo]

One of the reasons I closed my shop was he wanted to do a big rent increase. AFTER I left he tried to rent it out for an even HIGHER monthly fee than what he wanted from me.

16 months later, my old shop is STILL empty.

We too have tons of empty shops here and the landlords still do not lower the prices.

 

[AlexanderCS]

It's the same here in our small town. Storefronts down the main strip ("old" part of town) remain empty for, sometimes, years.

I think part of it is, at least for us, they're all paid for. They're old buildings, the mortgage has been paid off years ago. Property tax sure, but it seems they'd rather let it sit for a long time and try to get $2000+/mo than rent to someone @ $1500. Landlords here don't seem to care.

 

[sapphirescales]

One of the reasons I closed my shop was he wanted to do a big rent increase. AFTER I left he tried to rent it out for an even HIGHER monthly fee than what he wanted from me.

16 months later, my old shop is STILL empty.

We too have tons of empty shops here and the landlords still do not lower the prices.

THIS. I don't get it. So many landlords would rather have a space sit empty rather than simply trying to get a reasonable amount of rent. That and most are still trying to lock new tenants into 5+ year leases. News flash for you - the economy is NOT doing well! The risk of signing a 5+ year lease at some crazy amount of rent is far too high. Where I live even far outside the city they're trying to get $5,000+/month in rent and demand a 5+ year lease. Surprise, surprise, those places are STILL empty even after being empty for YEARS! One building has been empty for 7 years here because the idiot won't budge on his price or lease length. I just don't get it.

 

[FremontPC]

Here's a Reddit page on the subject:

https://www.reddit.com/r/explainlik..._why_does_so_much_commercial_real_estate_sit/

There are various considerations along the one that sprung to mind for me, that is the landlord has various properties in their portfolio and may want to use the vacant property as a tax write off if they can't get the asking price for a lease.

 

[Krynn72]

Same here, it's gotta be some insider secret. Rent never lowers, and places stay vacant for years and years around here, and not for lack of new businesses. Maybe it's just some landlords being stubborn, because other places get rented out very quick. I don't see how making an extra $500/mo makes up for nearly a decade of lost $2500/mo, but I'm not in the industry so maybe something else is going on.

 

[NYJimbo]

Another bizzare thing in my area is that they keep finding the tiniest piece of land and putting up a strip mall or oddly shaped retail complex. We have several of these, just blocks from me, that were built years ago and have NEVER had occupants. A 4 story "medical office" complex shut down 5 years ago because it never had enough people rent it. The thing sits empty still. But regardless of all the empty buildings, someone is always trying to buy up whatever chunk of worthless land is left and create a new shopping center, strip mall or whatever.

 

[nlinecomputers]

may want to use the vacant property as a tax write off if they can't get the asking price for a lease.

This. If you really can't rent the space out then claim it is more valuable than it is and write off the losses.

 

[Krynn72]

This. If you really can't rent the space out then claim it is more valuable than it is and write off the losses.

Well that explains it. Sucks.

 

[sapphirescales]

This. If you really can't rent the space out then claim it is more valuable than it is and write off the losses.

Welp, that law's gotta change. They screw everyone else (taxpayers) and small businesses by not paying their fair share of taxes and keeping rents unreasonable, which I'm sure is a major barrier to entry for someone looking to start a small business. Not to mention it causes other existing small businesses to increase their prices. The ONLY ones that win in this scenario are the big fat cat assholes that own the buildings (and the banks of course).

 

[NETWizz]

I think the landlord is nuts to ask for 40% more. If he was bright, he wouldn't negotiate a 7 year least and in the meantime would agree to something like +5% for a short-term lease.

 

[NYJimbo]

Well that explains it. Sucks.

Well, it sort of explains it. However, here on Long Island we pay property tax out the ass, I mean its something that can make you regret owning a home. So its VERY common for landlords to fight their tax assesment and then get their property value re-evaluated. If they do that then they cannot try to claim it as a loss bigger than it really is when they file. If they do, then it's fraud.

So I dont know if the "claim a bigger loss" would work around here.

 

[DataMedics]

If you really can't rent the space out then claim it is more valuable than it is and write off the losses.

It doesn't work that way. As a professional landlord, I wish this were true, but it's not. Rent is considered income. What you spend on the property is deducted from that income as a deduction. Saying a rental space is worth $1,000/mo or $1 million won't make any difference. Not making money to get a deduction isn't a good financial choice ever. If that made sense we should all stop going to work so we don't have any taxes to pay.

The fact is, they're just a bad landlord. Here in RI, there are a ton of foolish commercial landlords who are all dreaming of getting a perfect tenant who wants to rent the space forever for three times what it's worth. One idiot I spoke with has 4 spaces in a highly visible location strip mall just sitting empty for about 5 years now. When I inquired about the spaces, he said he's hoping for a big brand company like Sealy Mattress to come in and want the whole building and be willing to renovate it for him. Yes, he actually told me all this.

The reality is more likely they these people come from "old money". They are second or third generation rich kids who don't really get business math and don't really need any more money. So they keep dreaming of striking gold when Walmart wants their property and is willing to pay whatever for it.

 

[NYJimbo]

The reality is more likely they these people come from "old money". They are second or third generation rich kids who don't really get business math and don't really need any more money. So they keep dreaming of striking it rich when Walmart wants their property and is willing to pay whatever for it.

When I rented my shop in 1995, my landlord was in the process of taking over "daddys" property portfolio. He was born into money and never had to struggle. When he did an upgrade on the building he told me that our building was a "pain in the ass" but it still generated money, so he kept it. He doesnt seem like someone looking to squeeze out the last penny from a property, rather if he is still in the black with something, he is happy. So while vacant property bothers him ,he puts no effort into those but still hangs on to them. He has money to go to Paris and Italy ten times a year with his existing stuff daddy gave him so I guess thats enough for him.