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As someone that spent from 1972 till I retired as a investment/commercial broker, there is only one reason that rental commercial property sits vacant.
Reason: There has not been a suitable tenant willing and able to pay the rent on the property.
There are no advantage to the landlord for the property to sit vacant. It is only to their advantage if there is income coming in for the property.
Lets look at some of the reasons the property sits vacant.
1: In many areas of the country, there is a surplus of vacant commercial property. The less desirable locations to put a business, are going to sit empty.
2: Shoppers, have moved their shopping to another and far newer shopping area of the city, and businesses move along with the shoppers. Shoppers like new fancy NEW shopping areas. Once the sales volume goes down the the point that the area is no longer profitable to store owners, they are going to move.
3: Changes in a neighborhood. If a shopping center has seen the neighborhood go downhill, to the point middle class and up shoppers no longer feel safe in an area, they shop somewhere else, and the store owners give up the space, to move to a better area with more shoppers.
Example: 50 years ago, KMart built a new store in one of the State Capital Cities. Twenty five years ago the general area had deteriorated to the point KMart moved out and no one would rent it. Finally after few years the rent went down to the point a man leased it, and put in a Flea Market with hundreds of vendors. Business got real good, open Friday through Sunday. One Sunday two rival gangs from that neighborhood had a deadly shoot out in the store. That put that business out of business, and no one would even consider renting that building, and the building was torn down. There is still only a vacant lot at that location. I was at the store soon after the grand opening, and I stopped by the flea market, while it existed. I have not been to that neighborhood since, nor will I ever go to it again. It is not a safe neighborhood even for the residents.
OP--As to that old church where an Eatery existed but is no longer used space, there is nothing that would attract a good business to that location, as there are better locations available, where the owners would do a much better amount of business, so why would anyone choose a very old location where making a profit would be questionable.
SHOPPERS LIKE NEW LOCATIONS, WITH BRIGHT AND MODERN FACILITIES, WHERE THEY FEEL PHYSICALLY SAFE. Merchants are going to move to where they get the most traffic, and make the most profit.
There are no tax breaks, or any other reason for owners to keep from renting a piece or all of a commercial building. They want to rent to a good reliable tenant. They are sitting vacant if they are in deteriorating neighborhood, in a low shopper traffic count area of town, etc.
When a place stays vacant it's because either (A) the Landlord is playing hardball trying to get an above market lease, or (B) they just don't care enough to rent it because they have plenty of money and other things to worry about.
Also, the property could be owned by a real estate developer who is trying to assemble a plot with multiple adjacent buildings for a bigger development down the road. This process usually takes years, and they are taking in the losses in the hope of creating more value later on with the new, bigger assemblage.
Also, the property could be owned by a real estate developer who is trying to assemble a plot with multiple adjacent buildings for a bigger development down the road. This process usually takes years, and they are taking in the losses in the hope of creating more value later on with the new, bigger assemblage.
yes, although you can usually find commercial tenants for month to month leases or seasonal operations like halloween stores or christmas stores. Sometimes that lease income can be even higher than a long term lease for that month or two they are in operation
Also, the property could be owned by a real estate developer who is trying to assemble a plot with multiple adjacent buildings for a bigger development down the road. This process usually takes years, and they are taking in the losses in the hope of creating more value later on with the new, bigger assemblage.
Again....
East side of First avenue between 79th and 80th streets. Everyone and their mother knows the block has been sold, mostly emptied of tenants (a few commercial and residential remain), and is going to be redeveloped. However one or more of those vacant retail spaces have "for rent" signs in windows.
IIRC the IRS requires a landlord to be "actively" attempting to rent his commercial space to take the loss due to vacancy. The law is pretty vague and thus think a sign in window pretty much covers things....
SHOPPERS LIKE NEW LOCATIONS, WITH BRIGHT AND MODERN FACILITIES, WHERE THEY FEEL PHYSICALLY SAFE. Merchants are going to move to where they get the most traffic, and make the most profit.
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How do you explain Bleeker street being vacant for years? This is prime NYC real estate in one of the most touristy areas of Manhattan, and one of the most desirable areas to live.
What are you guys smoking, there is no immediate benefit to a landlord for keeping a space vacant. When they write it off as an expense they displace maybe 30% of the rental income loss, so they are still losing 70% every single month.
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I agree with Blake here.
One cannot tell the IRS that he has an income generating asset that he chooses not to use, and then claim a loss.
I just took a good hard look at the former Food Emporium site on 86th and Second that has been empty at least 6 years. The space is immense and the building must be forgoing $50-$100 G's a month by leaving it empty for a half decade. (Is that large building a rental, condo or co-op?)
My co-op gets $38 G's a month from the relatively small Key Food on the ground floor. THat helps a lot with expenses.
I agree with Blake here.
One cannot tell the IRS that he has an income generating asset that he chooses not to use, and then claim a loss.
I just took a good hard look at the former Food Emporium site on 86th and Second that has been empty at least 6 years. The space is immense and the building must be forgoing $50-$100 G's a month by leaving it empty for a half decade. (Is that large building a rental, condo or co-op?)
My co-op gets $38 G's a month from the relatively small Key Food on the ground floor. THat helps a lot with expenses.
To be fair the SAS construction that went on for years only recently ended. You couldn't get near much less see that corner retail space while that hot mess was going on. No business in their right mind would have leased such a space.
Yes, rental "losses" are deductible , can be accumulated and under most commercial landlord's situations deducted from other income as well. And yes, that is one of the reasons landlords don't mind places staying empty.
If they put some limits or restrictions on it things would change but that's not going to happen.
all that does is help minimize losses somewhat, it's not a benefit, they are still losing money overall.
If you deduct $20k on your taxes for instance, the benefit is generally that you owe about $7k less in taxes, but you're still left with a net loss of $13k.
If you deduct $20k on your taxes for instance, the benefit is generally that you owe about $7k less in taxes, but you're still left with a net loss of $13k.
ding ding ding
waiting for the next moron to claim that something "is a write off" for a company when they have absolutely no concept of what a write off actually is
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