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comment on: WeWork Skips Some Rent Payments as Coronavirus Undermines Revenue  · link
by: b_b · 847 days ago

    “WeWork believes in the long-term prospects of our locations and our relationships with landlords across the world,” a WeWork spokeswoman said in a statement, while trying trying to maintain a straight face.

Fixed it.

comment on: WeWork Skips Some Rent Payments as Coronavirus Undermines Revenue  · link
by: goobster · 846 days ago

THIS.

WeWork goes away, but the tenants stay and begin paying slightly higher rents to the building owners. Because the owners don't want the space vacant, anyone paying WeWork's rent can afford a little more, and the building landlord just hires someone to manage all the "small" contracts that were too small for them to consider as renters before.

That is, once people are allowed to go inside the buildings again....

comment on: WeWork Skips Some Rent Payments as Coronavirus Undermines Revenue  · link
by: kleinbl00 · 846 days ago

I think there will be a lot of simply assuming the contracts.

WeWork was predicated on this idea that you had a "membership" that allowed you to jet around to all these other offices all over the place and I think that business model is done for a few years at least. At which point you recognize that your landlord isn't WeWork, it's whoever actually owns the building. I've probably linked these guys a half-dozen times; subleasing isn't fucking rocket science.

comment on: The Rise of the WeWorking Class · link
by: demure · 1258 days ago

    What's interesting here though is that "shitty life/work balance" is WeWork's implicit product... and I hadn't seen it put so starkly before. Because really, they're taking the shitty "have a kombucha now get back to the galley and row, slave" aspect of working in tech and offering it up for rent. They're offering it up to you, as an individual "entrepreneur", and they're offering it up to your company, as a way of literally outsourcing their culture. Most everyone else has been pointing out that WeWork is basically a rental middleman, adding a layer of techy bullshit to existing leases and skimming off the top.

Exactly--right on the nose. Glad you took another look.

    And 20 years from now, when we're all mocking the shit out of the terrible ideas of the teens, I sincerely hope we've come to our senses about what a terrible idea all this is.

Hear hear.

comment on: "Kat returns to the office." Welcome to her COVID hell. · link
by: goobster · 767 days ago

My boss is advocating for us NEVER returning to the office. Our team is still killing it - profitable, productive, etc. - but we were pretty physically separated anyway, due to the regional nature of our sales team. One guy in Vegas, another in Georgia, a guy in ... umm... Cincinnati, I think?... and about 6 of us in our HQ office here in Seattle(ish), with three of those on the road most of the time.

And I've been hearing this from a lot of different people in different companies. My housemate works inside the Amazon buildings downtown, and has had to go in twice a week for the last month or so. He sees 5-7 people A DAY in the Amazon cafe he runs.

If the spike we are currently entering into here in the US continues without a Federal program to address it systematically (which will never happen), we won't even get to a second wave until next year. The first wave will continue through the end of the year. Approaching maybe half a million deaths by Christmas? (130k so far, 4 months into the pandemic stage, with 6 months to go, and people/businesses getting desperate to go out. So far we have been pretty well behaved. But that's ending pretty fast, and this weekend will surely spike the numbers like we haven't seen yet.)

So then companies have to cut costs dramatically if they want to stay in business. Furloughs. Reduce operational costs, like facilities. Offices.

Commercial real estate becomes cheap and plentiful.

But millions of people still need to work, and can't work 100% from home.

So WeWork-COVID opens up in all this cheap, new, accessible office space. Coworking at a social distance becomes common, and with the reduced costs of not having any kitchen facilities and coffee break room/supplies. Everyone is self-sufficient. Bathroom trips become longer as you sanitize before and after you use it.

I think there's a potential for "office work" to change a lot for many kinds of modern jobs.

But the meat packers? Production lines? Shipping departments? Still fucked.

post: Rent, two ways · link
by: kleinbl00 · 823 days ago

Dueling news articles put forth by the WSJ's commercial real estate report this morning:

Advocates, officials try to prevent Philly’s coming wave of coronavirus evictions

    At a news conference last week, Councilmember Kendra Brooks called the proposals “humane protections to keep people in their homes during this unprecedented public health crisis.”

    Garland noted that these are measures “that frankly most good landlords are doing.” But others, she said, are illegally locking out tenants, charging “exorbitant” late fees, and threatening to call U.S. Immigration and Customs Enforcement.

    The Reinvestment Fund report also highlights the importance of legal representation for both tenants and landlords and finds better outcomes for both parties when all know their rights and responsibilities. In line with most legal proceedings, tenants who bring lawyers to eviction negotiations tend to get better deals, including being allowed to leave a unit without owing more money or entering an installment plan instead of owing a lump sum.

    But nearly two in three tenants do not have an attorney when entering into agreements with landlords without a judge’s participation.

But wait! The Wall Street Journal to the rescue!

Fixed Rent Payments Could Be the Latest Pandemic Victim

LOL J/K that's if you're a publicly-traded retailer

    A number of retailers are already asking landlords to waive some of their rent in return for a share of future revenues. Ross Stores Inc. said last month that it would pay a rent equivalent to 2% of sales when its stores reopen. Guesst, a New York-based technology company, recently launched software to help retailers and landlords manage revenue-sharing arrangements.

    Co-working giant WeWork, which had been looking to switch to more revenue-sharing arrangements before the pandemic, has accelerated the shift over the past month and hired two brokerage firms to renegotiate its real-estate deals. Some apartment-hotel operators, suffering from a downturn in tourism, are also looking to lower their real-estate bills and are willing to grant property owners a share of their profits in return.

    Lease alternatives can come in many forms. Some firms sign deals that include a few years of revenue sharing upfront, followed by a period of fixed rent payments. Other deals include a low monthly rent, topped off by a share of revenue. Still others include no rent at all.

Average rent, Philadelphia: $1652/mo

Average salary, Philadelphia: $5666/mo

2% of average salary "revenue:" $113/mo

Go ahead and try revenue sharing with your landlord. See how well it works without a $32b market cap.

post: Coliving: A Solution for Lonely Millennials? - The Atlantic · link
by: thenewgreen · 2464 days ago

    Evans and Talarico aren’t the only ones trying out something like this. Pure House, which The New York Times called a “Millennial commune,” is a Williamsburg apartment building that also creates a networking and social community for its residents. Krash is a startup that invites entrepreneurs to live in a shared living space for three to 12 months in Boston, New York, or D.C. to jumpstart their connections. Even WeWork, the massive coworking space, is planning on moving into shared living spaces, according to the The Wall Street Journal.

chooter -Interesting stuff! Thought you might enjoy the read.

comment on: Ben Carlson: Debunking the Silly “Passive is a Bubble” Myth · link
by: kleinbl00 · 1064 days ago

BAM

WeWork is suddenly worth $20b.

comment on: Ben Carlson: Debunking the Silly “Passive is a Bubble” Myth · link
by: kleinbl00 · 1065 days ago

Fundamental value theory states that a stock is worth the future value times the odds of it going up divided by the odds of it going down minus the value of the starting investment in a risk-free vehicle.

Castle in the air theory holds that a stock is worth what you can sell it for.

Fundamental value theory has been out of vogue for twenty years. WeWork is worth $47b because you'll be able to sell it for $80b in another couple years (right? right!).

ETFs are the way to go because everybody knows that ETFs are what you want to buy. Until ETFs are what you want to sell and suddenly, ETFs aren't worth as much.

comment on: For the fourth straight month, roughly one-in-three Americans failed to make a full, on-time housing payment. · link
by: kleinbl00 · 725 days ago

It's not a crisis because there are no poignant images, there are no famous people affected, and because poverty and eviction cut to our deepest shame.

Piketty kept talking about the rentier - those whose livelihood comes from owning something and charging someone else to use it. That would be "landlords" if you aren't a French economist. Rentier made up a very large portion of the bourgeoisie in pre-revolutionary France and they make up a very large portion of the bourgeoisie in pre-postcapitalist America.

WeWork has 9 million square feet of space in NYC. 2 million of that has no one paying rent on it. That number is not going to go down anytime soon. 50% of commercial rents are in arrears across the United States.

I didn't really understand The Great Depression until I read Ken Galbraith's book. The problem was basically this: a whole bunch of people who were counting debts owed to them as assets had to write them down when they were forced to conclude they would never be paid.

Let's say you own an 10-unit apartment building. Everyone in it pays you a thousand a month. You own a ten unit apartment building because the mortgage and expenses cost you eight thousand a month. Suddenly half your tenants can't make rent. You went from making two grand a month to losing three. I'll bet you needed that grand a month; the bank was expecting six grand, the property manager was expecting a grand, the state was expecting a grand. So now the property manager is fucked. The state's fucked but it'll take them a year to 18 months to get to you. The bank is going to get something but not nearly enough so now the bank has to cover that shortfall. And we're all shining it on and pretending that cruise ships are going to make a big comback next year because the most shameful sentence in the English language is

"I can't pay my bills."

Obviously the people most fucked are the ones getting evicted. Not going to minimize that in the slightest. That is a life-changing event, and not for the better. Ignore that tragedy for a minute though and contemplate the fact that on average, pressing one eviction and all it entails through the courts runs between three and six months' worth of rent.

If you evict half your building you're in the hole for a minimum of 15 months even if you have people lined up to pay full price for the empty units. And you don't.

My wife bought this house in 2000. Our mortgage is adorable. We'll be okay. Guys next door?

...yeah.