[CydeWeys]

The key thing to understand is that commercial real estate is valued as some multiplier on rent (exactly the same as evaluating a bond by the interest rate it pays out). If the rent you're charging goes down then so too does the valuation, which can out you underwater on your loan and then you're just screwed.

Some kind of regulation that imposed an equation that increasingly devalues property from its last rented price the longer it remains vacant would do wonders here at correcting the market distortions. Another way to implement that would be to value vacant properties using the total rents charged over the past 5 years -- so the more vacancy there is in that, the more your total rent suffers.

Lenders can (and should) make this change too. It doesn't even need to be imposed top-down by the government.

[bombcar]

Commercial loans can also often be called - unlike home loans - so if you go underwater the lender can say “cash. Now.”

[rdtwo]

Right and being underwater and recognized as underwater can topple an entire chain of loans that were used to secure other loans. One bad loan can topple an entire chain like dominos but this usally applies to small/med real estate groups. Large conglomerates have ways to segregate risk and leave investors holding the bad w

[bombcar]

You can use this to your advantage when negotiating if you can figure out a way for your official rent payment to be what they want but receive rebates or other cost cutting measures so the net payment is what you want.

[rdtwo]

Yeah that’s why new apartments will front load offers with 1-3 months free rent