So retailers just stop paying rent ...yep billions in profits but can't afford 1 months rent

bone said:
I think that SunTrader brought up an excellent point about “Force Majeur” lease provisions.
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The reason why I brought it up is that one of my friends owns a Cici's Pizza Buffet Restaurant, and his landlord which is a big commercial real estate company, absolutely rejects that this situation is a force majeure situation since restaurants are allowed to operate via takeout orders. So there's the stand off.

It seems like a sensible solution would be to charge based upon a percentage of sales. So if the restaurant was doing $100k per month and paid $10k in rent before this mess, that's 10% of sales. So if they did $15k in sales this month from just takeout orders, they would only pay $1,500.
 
virtusa said:
That's a very clear example.
The landlord did NOT close it to foot traffic. The government did. So the landlord cannot be blamed for that. He made an agreement with a renter to put a space at the disposition for the renter. The landlord did what he was obliged to do by contract.

If one of the two parties that signed the contract does meet his obligations, he is guilty. So not paying the rent is against the signed agreement.
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An issue to be negotiated/arbitraded. Perhaps one of those "Force Majure" thingys?
 
Baron said:
Are the landlords so broke that they can't survive without one month of rent? And what does it say about a landlord who demands full payment knowing damn well the foot traffic in the tenant's store is non-existent because of factors outside anyone's control?
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If internet would be shutdown for 2 months, would your sponsors not have to pay? Will you pay the bill? And why should you pay the bill as you did nothing wrong at all?

Landlords should not be victims of factors outside anyone's control too.
Force Majeure will decide what the outcome will be.
The landlords did nothing wrong, so the damage cannot be put on their account.
 
Baron said:
The reason why I brought it up is that one of my friends owns a Cici's Pizza Buffet Restaurant, and his landlord which is a big commercial real estate company, absolutely rejects that this situation is a force majeure situation since restaurants are allowed to operate via takeout orders. So there's the stand off.

It seems like a sensible solution would be to charge based upon a percentage of sales. So if the restaurant was doing $100k per month and paid $10k in rent before this mess, that's 10% of sales. So if they did $15k in sales this month from just takeout orders, they would only pay $1,500.
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Landlords have it heads I win, tails you lose - other than in cases where force majeure clauses apply.

Because another thing not understood by the general public is that there is this other thing called "percentage rent".

Ordinary rent ($ per sqft) and on top of that percentage rent (X% of any amount greater than Y). But in times like currently with sales/revenues/profits down ordinary rent is due but heck no way is there any discount.
 
Baron said:
The reason why I brought it up is that one of my friends owns a Cici's Pizza Buffet Restaurant, and his landlord which is a big commercial real estate company, absolutely rejects that this situation is a force majeure situation since restaurants are allowed to operate via takeout orders. So there's the stand off.

It seems like a sensible solution would be to charge based upon a percentage of sales. So if the restaurant was doing $100k per month and paid $10k in rent before this mess, that's 10% of sales. So if they did $15k in sales this month from just takeout orders, they would only pay $1,500.
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they can then argue they have 0 brick store sales
 
S2007S said:
Amazing that companies that have made billions and billions in profits over decades can even pay a month's rent after stores are shut down for just 1 single month!!!!!!!!!


And gap is not the first to do this.



Gap stops paying rents, warns it might not have enough cash for operations
PUBLISHED THU, APR 23 20208:35 AM EDTUPDATED 36 MIN AGO


https://www.cnbc.com/2020/04/23/gap...h-for-operations-as-it-stops-paying-rent.html
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They should have read this forum. As even beginners in technical analysis could tell them, most gaps will be closed

(sorry)
 
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