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A comment on San Francisco’s rent prices have never returned to pre-2020 levels. Parent comment

Re:San Francisco’s rent prices have never returned to pre-20... by nolongerthere on Saturday December 23, 2023 @09:10PM (#38750422)
Forget rent control, the way commercial real estate works, many banks give loans based on certain minimum rents being paid, if the landlord lowers the rent the bank can call the entire loan to be paid immediately.
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Re:San Francisco’s rent prices have never returned to pre-20... by lotsofpulp on Saturday December 23, 2023 @09:46PM (#38750637)
If there is no rent, then there is a default too. You don’t get to pretend your property is worth $x per sq ft unless it is landing in the bank account.

https://www.investopedia.com/terms/d/dscr.asp

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Re:San Francisco’s rent prices have never returned to pre-20... by chii on Saturday December 23, 2023 @10:02PM (#38750707)
What the landlord does in this situation is paying out of pocket the expected interest payment to the bank, while deducting this as a cost from their other more profitable portfolios.

They hope to ride out the lows.

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Re:San Francisco’s rent prices have never returned to pre-20... by roshin on Saturday December 23, 2023 @10:21PM (#38750794)
In that case, the landlord could rent for a lower rent than the bank is okay with, and supplement the missing amount himself. That would be cheaper that leaving it empty and paying all the rent himself.
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Re:San Francisco’s rent prices have never returned to pre-20... by Qwertious on Sunday December 24, 2023 @01:03AM (#38751511)
That would require the landlord to report the rent as being higher than it actually is, which is fraud.
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Re:San Francisco’s rent prices have never returned to pre-20... by lotsofpulp on Saturday December 23, 2023 @11:23PM (#38751102)
No, the lender or the servicing company will regularly request the P&L and check up on business. Paying out of pocket does not mean the debt covenants are satisfied.
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