Overheard a landlord at Lafayette Coney Island complaining about assessments

Last Tuesday I'm eating a coney at the Lafayette counter and this guy two stools down is on the phone bitching about his Woodward Ave storefront tax assessment going up 18% this cycle. He kept saying it's cheaper to hold vacant than lease to a vape shop at $12/sq ft. Made me wonder if anyone else has done the math on vacancy vs bad tenant risk in the Cass corridor. Has that tipping point hit yet or are owners still eating the costs?

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1 Comment

the_faith17d ago

Had the same math problem on a building I owned off Trumbull a few years back. Took me a full cycle to realize the worst tenant is an empty unit with a tax bill that keeps climbing. I ate the vacancy for 14 months because every applicant was either a cell phone kiosk or a guy who wanted to pay in crypto. Finally leased to a laundromat at $9 a foot, which barely covered the taxes. But the property stayed warm and the assessor didn't hit me as hard the next year because there was actual activity. Landlords who sit on empty space are just paying extra for the privilege of complaining. The tipping point is when your vacancy loss plus the tax hike exceeds what a bad tenant would cost you in eviction fees and cleanup. Most owners won't admit they're there until they see it in their own P&L.