Quote:
Originally Posted by WhipperSnapper
Restaurants closing in Toronto is almost entirely due to rents and taxes. Owners are able to and are jacking up rents by $100s of dollars every months and sometimes knowing their current tenants cannot pay. A chain store in a long term lease can add millions to a store's property value.
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The commercial vacancies are still a bit of a mystery to me. I realize that the leases are often long, I guess in the 3-10 year range based on leases I have heard about. If landlords could kick out tenants whenever, you'd expect them to always have tenants as long as the rent was above the costs imposed by the tenants themselves (wear and tear, insurance costs, effort of dealing with the tenant).
A lot of cities have businesses that say they can't find space and spaces in prime areas that sit empty not just for a month or two but sometimes a year or two. If you have a 5-year lease, you are better off lowering your rents by 10% than holding out for a year.
Is there some tax thing at play here? Or the tenants want to pay so little it's not worth it? Or are some landlords actually making bad financial decisions?