We are in commercial zoning oversupply to be honest. New retail units going up all the time under apartments failing to lease because there is only so much retail demand, at least at the prices offered but we know people would rather take a loss from an empty unit they can write off than actually lower rent and underlying asset value they use for collateral for loans.
replyReally depends on local markets. NYC by comparison has a lot of new condos that go up with zero street level retail space.
replyIt all gets filled up with an expansive lobby and amenities.
Makes the surrounding street life dead.
Could we fix that with a vacancy tax for retail?
replyThere are too many factors that intersect to lead to these outcomes that make it easy to detect any one silver bullet. Valuing a property based on rents seems to be another big issue since it sets up incentives to increase rent and valuations even when the real estate market doesn't support that rent increase.
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