Government bans upward only rent reviews

Canice

I presume that you have no inside knowledge of this case? I don't have either.

But as I see it, the guy negotiated a lease at the top of the market. He can't even claim that he was a victim of an unfair rent review clause.

The state of Dawson Street is not a big problem for the landlord. If he has a substantial tenant who has guaranteed the rent, he will probably insist that they pay the rent.

If he has a tenant who is going bankrupt, he will probably work with him.

Tenants have extraordinary rights to long leases under the law. One of the downsides of this is that the landlords want high rents.

I think that the market in general should be liberalised. If I enter into a lease for 5 years or 10 years, then I should have no further rights on expiry of the lease.Because someone with a 5 year lease has a right to renew that lease under Irish law, landlords tend to insist that they sign 21 year or 35 year leases to give them an obligation as well as a right.

I have successfully negotiated my way out of a long-term negative lease by negotiating with the landlord and agreeing to pay the costs of finding another tenant.

The public outcry that landlords should all reduce their rents for the benefit of retailers creates the wrong atmosphere in which to have meaningful negotiations.
 
I have no inside knowledege of this particular case but it strikes me that it doesn't represent the norm.

Whilst it's not all that unusual for 1 bank to be represented on both sides of a commercial transaction, well, look, The Times details all the people involved. These aren't Mom and Pop operations. I don't know what these people were up to.
 
Brendan said:
But as I see it, the guy negotiated a lease at the top of the market. He can't even claim that he was a victim of an unfair rent review clause.
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At that time, it was a landlord's market. As far as I know, upwards-only agreements were the norm. Therefore, if one wanted to open a business in central Dublin, you either agreed to such a lease, or didn't get one at all. Hobson's choice.

As I say, this forum has a section dealing with negative equity. Everything you say about people who rented commerical property at the top of the market equally applies to people who bought houses at the top of the market; that they made the deal fairly, in full awareness of its consequences, etc, etc.

But I have to think the situation with the former is far more serious; while negative equity has many ramifications, at the end of the day, the worst that happens is that the owner cannot sell to get a larger home or to move to a new job. The former means that jobs are being lost.

The public outcry that landlords should all reduce their rents for the benefit of retailers creates the wrong atmosphere in which to have meaningful negotiations.
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There's no way to argue against this logic. Before there was any public awareness of the issue, landlords weren't negotiating. Now that there _is_ public awareness, that gives landlords a reason not to negotiate? So I guess that the newspapers shouldn't be printing stories about this issue?
 

Fair point.

It's a very valid issue to discuss in public. I suppose what I meant was that if I was the landlord in this case, I would not appreciate being demonised by the media when they know nothing about the case.

We obviously have to agree to differ. But I would have far more sympathy for an ordinary Joe who bought a home at the top of the market who is now overindebted than for

" Ron Bolger, chairman of Irish Food Processors; Peter Murray, a former chairman of Anglo Irish Bank; and investors organised by NCB Stockbrokers."
 

I don't have much sympathy with them either - certainly, if it was only Anglo Irish Bank apparatchiks on either side who were suffering, my reaction would be similar to Kissinger's quip about the Iran-Iraq war. My sympathy is with the 60 ordinary joes who lost their jobs over this.
 
canicemcavoy said:
My sympathy is with the 60 ordinary joes who lost their jobs over this.
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I would assume that if rent was not paid for a whole year then other bills were not being (at least partially) paid either. This leads me to think that the business was not viable and those 60 ordinary joes were probably going to lose their jobs anyway. In fact, the landlord probably could have terminated the lease well before now. You'd also have to question the restaurant's owner's expectation of running a restaurant with this level of overhead...that's a lot of pizzas!
 
As I said already; if you feel that the status quo of having empty retail outlets, people on the dole, and landlords receiving no money anyway is better than any alternative, that's your prerogative.
 
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This seems to be a pretty common sequence of events now in these cases, though I'm not convinced the structure of parties involved is reflective of business norms - except in the bubble mania world of a few years back.

The Times certainly seems to go to extraodinary lengths detailing the people involved. The slicing and dicing seems more to do with, uhm ... financial whizz-kiddery, than running any sort of business. It's hard to apply any sort of business logic to the decisions these people may make with regards to these investments.

 
It does appear that a very one sided view is been perceived in the case of Retailers vs Landlords. Nobody was ever forced to sign a lease for any Commercial Property. The retail game is full of greed. It was pretty obvious that retail rents were out of control and that casualties woulkd occur. The moaning and groaning of the retailers throughout the country is loud and pitiful. If it was all as difficult as they make out why didn't they bail out when things were booming. 'If you can't stand the heat get out of the kitchen'
 
The problem with the debate on rents is that people are forgetting that many landlords can't afford to drop rents because they bought properties at such low yields during the boom years. These guys all have debt to service so while it might be politically easy to call for rent reductions, in reality in a lot of cases, it is not possible to do so. I am willing to bet that most landlords who can afford to negotiate would negotiate.
There is no easy solution to this mess.
 
Yes, as somebody pointing out the massive level of rents here, I do agree that it is difficult for some landlord who face debt repayments.
 
Just maybe consider that the rents are not too high for the property; just too high for the tenant in the current market. Whilst tenants are publically screaming for lower rents, how many will take note and tell their landlords things are fine when it happens, 'I owe you money'. Reciprocal answer -- None. They have frightened those with money off instead of encouraging them to spend. Retailers have become a noisy voice box for what we all know - We're in a Recession Stupid. The sympathy vote has been dumped.
 
If you feel that strongly about it, perhaps you should set up a public campaign urging landlords to maintain their rents.
 
canicemcavoy said:
As I said already; if you feel that the status quo of having empty retail outlets, people on the dole, and landlords receiving no money anyway is better than any alternative, that's your prerogative.
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I was pointing out where I felt this business might not be viable. I never said anything about preferring the situation you have described. Far from it.
 
Firefly said:
I was pointing out where I felt this business might not be viable.
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Correct, Because we have come from a Property Boom, it is a pity that Joe Public doesn't acknowledge that the mass of Financial Casualties relate to persons that have been involved in the Property Business.

Sure the Real Estate Alliance are able to spout off for the Retailers, as to how difficult things are, how the rents have crippled the retailers' businesses. But the facts are that the same retailers chose to pay the rents. In many cases it was easily evident that some businesses would not last, or be able to pay the rent or were dealing in product and produce that has suffered because of a Worldwide recession. So quit beating the landlords, try beat the hearts and minds of those that allowed this crazy stupidity and madness -- The Banks.

So far there has not been too many high profile legal cases involving retailers that have gone bang, but the emphasis is really blaming one entire sector -- landlords
 
mercman said:
So quit beating the landlords, try beat the hearts and minds of those that allowed this crazy stupidity and madness -- The Banks.
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In this case, one of the landlords is the son of a famous banker, Seanie. I wonder does he agree that his current problems are entirely due to his father as you seem to?
 
mercman said:
Just maybe consider that the rents are not too high for the property; just too high for the tenant in the current market.
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I don't fully agree. Some commercial rents are too high, and will always be too high. They are based on property values that were inflated way beyond fundamentals.

They will still be too high with 2-3% growth in the economy.

I read somewhere else that office rensts are 10 euro per sqm in Munich. In Dublin it's much higher (can somebody confirm how much???). I heard 40+ per sqm, but can't confirm that.
 
If you could posture yourself to read the thread. What has his father got to do with it. All of the Banks in general simply went on a roll of careless lending. What the heads of all the Banks did was bad business and they should all be turfed out. In the case you chose to mention the person concerned owns a tiny portion of the property. In that particular property, the tenant is as much at fault to choose to pay such a ridiculous rent in the first instance.
 
mercman said:
If you could posture yourself to read the thread. What has his father got to do with it.
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You're blaming our current woes solely on bankers, and excluding all blame from landlords who overpaid for property. The father of the landlord in question, Seanie Fitzgerald, was head of a large bank now well-known for loaning money for property. Yet I doubt that the landlord in question thinks that his father is totally at fault.

I'm also amused that you have no sympathy for retailers who overpaid for their leases (fair enough), yet have sympathy for landlords who overpaid for property.
 
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