They can borrow against the property at the stated rent instead of what the market would actually pay. As soon as they accept lower rents they can no longer claim it's worth as much in collateral.
Hmm. I would never have expected the kinds of lenders who might be in a position to accept a large commercial property as collateral to be so gullible as to just accept that number at face value without paying any attention to other factors that might call it into question.
Or are the "lenders" in this case actually retail investors who are buying into dodgy REITs and suchlike?
Or are the "lenders" in this case actually retail investors who are buying into dodgy REITs and suchlike?