Post Lockdown Strategy

[River Rat]

Your anchor tenants what time do the have left on their respective leases

Due for renewal 2023.

[River Rat]

I would split government interventions into:

Political

Tax

 

Under political I see soft issues such as labour relations/environment

 

Tax - whatever comes our way

 

Also include shareholders as a seperate category

Agreed let's see if we can develop these into rules.

[SteveFW]

Developing the scenarios will be extremely complex as the "decision tree" has so many variables from each of the interlinking options split to create.

 

First up I would discount government intervention in this scenario entirely, their focus will initially be on labour and feeding the unfed.  They will not provide effctive intevention except on the level of a few lower paid staff.

[geomark]

Developing the scenarios will be extremely complex as the "decision tree" has so many variables from each of the interlinking options split to create.

 

First up I would discount government intervention in this scenario entirely, their focus will initially be on labour and feeding the unfed.  They will not provide effctive intevention except on the level of a few lower paid staff.

But they can still intervene meaningfully if not positively (for the lamdlord) by eg saying cant evict anyone during a period, has happened in Australia?

[SteveFW]

I believe that the financiers will "come to the party" .  They have skin in the game and must negotiate to protect their position and minimise their loss.  their opening bid will be a rental holiday with delayed payment and interest rolled forward.

 

If they do not do a deal they will be able to call up whatever sureties there are and then attcah and liquidate the buildling.... not an attractive prospect in the likely market.

[River Rat]

But there are no extraneous rules other than those set out above which govern this situation, i.e. if one were to enter into a rights based third party resolution (arbitration or litigation) those would be the rules which would be applied and their would be decision arising from the application of these rules.

I think we have to accept that legally we have the high ground in that tenants are renegotiating because they realise they won't be able to fulfill their obligations. We can try and keep them to it but we'll both lose in the process. That's why the renegotiation is a rule.

[vanniri]

Agreed let's see if we can develop these into rules.

Tax - tax incentives to keep employees on payroll and tax breaks to support cashflow

 

Shareholders - 35% requires income stream, balance long - term investors

[ACM]

But they can still intervene meaningfully if not positively (for the lamdlord) by eg saying cant evict anyone during a period, has happened in Australia?

Agree.  And the interventions on tenants (example impact of Goverment intervention on Spar) might just ripple through onto landlord (Spar might not be able to afford to keep all their staff and want a longer period of reduced rent). 

[geomark]

I believe that the financiers will "come to the party" .  They have skin in the game and must negotiate to protect their position and minimise their loss.  their opening bid will be a rental holiday with delayed payment and interest rolled forward.

 

If they do not do a deal they will be able to call up whatever sureties there are and then attcah and liquidate the buildling.... not an attractive prospect in the likely market.

Is this not covered in rule 3?

[River Rat]

Developing the scenarios will be extremely complex as the "decision tree" has so many variables from each of the interlinking options split to create.

 

First up I would discount government intervention in this scenario entirely, their focus will initially be on labour and feeding the unfed.  They will not provide effctive intevention except on the level of a few lower paid staff.

  

But they can still intervene meaningfully if not positively (for the lamdlord) by eg saying cant evict anyone during a period, has happened in Australia?

Exactly government intervention is a reality our problem is that what the will do is a key uncertainty that they will is certain.

[ACM]

Does tenants have "force majeure" in their contracts?

Are there any contracts the land lord has that are not critical that have a "force majeure" ?

[SteveFW]

But they can still intervene meaningfully if not positively (for the lamdlord) by eg saying cant evict anyone during a period, has happened in Australia?

They  (the Govt) will possibly do this for residential rentals but I think it is unlikely, given past experience that they will interfere in commercial leases.  This intervention also does not really assist either the landlord or the tenant in this scenario.

[River Rat]

I believe that the financiers will "come to the party" .  They have skin in the game and must negotiate to protect their position and minimise their loss.  their opening bid will be a rental holiday with delayed payment and interest rolled forward.

 

If they do not do a deal they will be able to call up whatever sureties there are and then attcah and liquidate the buildling.... not an attractive prospect in the likely market.

That looks like a rule.

6. The entire property market is in the same position as ours and a sale in execution will be avoided by the financiers.

[SteveFW]

I think we have to accept that legally we have the high ground in that tenants are renegotiating because they realise they won't be able to fulfill their obligations. We can try and keep them to it but we'll both lose in the process. That's why the renegotiation is a rule.

Correct, the legal position is clear, as is the inability of the tenant to fulfill his obligation, I think that one is heading into a negotiation here to balance or try to balance the interests of the parties, either via a third party mediation or via a negotiation.

[ACM]

I believe that the financiers will "come to the party" .  They have skin in the game and must negotiate to protect their position and minimise their loss.  their opening bid will be a rental holiday with delayed payment and interest rolled forward.

 

If they do not do a deal they will be able to call up whatever sureties there are and then attcah and liquidate the buildling.... not an attractive prospect in the likely market.

 

Reserve bank today eased on regulations on banks in terms of reserves to get R500b of funds available from banks to do exactly that. 

[meathead]

I would consider that the tenats are trying renegotiating as a positive instead of them defaulting