Comment by ThrustVectoring
3 days ago
Commercial real estate lending typically has a clause that allows pausing of payments during a vacancy and letting the interest accrue into the balance of the loan - effectively, the banks are giving the property owners a free option to try and get the vacancy cleared without affecting long-term incomes and asset prices.
That still sounds like a scam.
Money laundering? https://financialcrimeacademy.org/real-estate-aml-red-flags
Seems there's ALWAYS some from each column...
Yeah, it's a big high-stakes game of musical chairs.
Ironically, this is one of the strongest proofs that American society is very un-capitalistic.
Shareholders, who would have received the dividends from rent payments otherwise, simply go pound sand when this happens.
Even though there should be plenty of shareholders willing to accept lower asset values in exchange for continued, reduced, dividend payouts.
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More like a game of Hot Potato.
More like poorly structured loans and incentives.