...But building owners who purchased their properties in recent years with the expectation that rents could only continue to rise may be in a bind. To secure financing, they would have to project a certain level of income, and if they accept less than that, they run the risk of being in default, or having their lender require them to put more equity into the building.
In other words, the landlords aren’t behaving irrationally; if it were an option, they would rather lease those spaces at a lower rent than collect nothing at all. But it's not an option, because if they sign those leases, they’ll trigger debt covenants that will cost them even more money than leaving the storefronts vacant.
...Most Americans now have a lot of debt, whether they’re ordinary workers or commercial landlords. Which means that most Americans have to be extraordinarily sensitive about letting their income cross the line where they can no longer support their debt payments. Which in turn means that already sticky prices may become positively glue-like.
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