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After 2008, banks used their windfall to become the new McDonalds - an expansionist real estate company.

Easier than giving out business loans. All those new branches will disappear in a few years as real estate profits peak.




That explanation doesn’t make any sense. Why wouldn’t they just own the property and lease it, like any other landlord?


Laws governing investment of capital. One course is speculative, the other is “operations”.


The other posters aren't correct. The actual reasoning is that the banks, as tenants, impart a top-flight credit score to a substantial portion of the building's finances if the leases are designed the right way. In return for the slightly more demanding leases which allow the credit-score to functionally pass through, they receive a substantial rebate on the market rate of their leased locations over long periods, affording them cheap arbitrage opportunities - if real estate prices and rents soar, they're still locked in below market rate at the pre-boom rates. If they don't, and rates go down, they have a substantial buffer before the market value of their leasehold is negative.


Well if you think the market will get hotter then you would want to wait to lease it.




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