A wicked domino effect is at work. Commercial real estate loses tenants when those tenants downsize, go broke, file bankruptcies (which conveniently allow them to â€˜accept or reject’ their leases) or just disappear. Every property has a break-even point, past which, they become a non-producing piece of dirt with structure attached, into which you continue to pour money. If your tenants cannot pay you, sooner or later, you cannot pay your mortgage. Your lender then forecloses and you do not own your commercial property any more – all you have to show for it is a smoking hole where your credit score used to be.
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