[rossdavidh]

Oh my goodness, thank you. My wife had to move her store in 2020 in the midst of lockdown; you'd think rents would have been low, but no. Since then, many of the places that wouldn't lower the rent then, have sat empty ever since. This is in Austin, TX, a town that has had a healthy economy during that entire time.

Weirder still, many of them were on the market, theoretically for rent, but if you called them up it turned out they weren't actually available, and the landlord wasn't interested in renting them. I couldn't figure out why you would pretend something was for rent at $X, and let it sit empty for years, rather than actually rent it at something <$X. Now it makes sense.

[senordevnyc]

Wait, were they not available at $x, or not available for < $x? Because if it’s the former, then this article doesn’t really explain your experience, right?

[evo]

Could be this (from the article): "Another scenario I can think of is that the financial model for the building requires spaces to be filled by “credit tenants,” meaning name-brand businesses of a certain caliber and creditworthiness."

Might not be available unless your name ends in 'tarbucks'.

[lokar]

Yep. The owner assigns much higher value to leasing to a large national chain. They often hold out for one, refusing to lease to more risky businesses.

[Nemi]

Another thing that I read about on this topic was that once a land lord has gotten into a groove of extend and pretend they lower their costs and cut out the overhead of property management. This means that if they took on one tenant they would have to ramp up property management costs (and potentially refurb/improvement costs) and they are not willing to do that, so you end up with the situation where you can't rent a property even if you want to.

[rossdavidh]

Several instances of both. In at least one case they told us that they wanted to rent to a big-name tenant at a larger space in the same complex, before they started renting any of the smaller places. What seemed odd to me is that they would nonetheless put the property "on the market", i.e. online listing, even though if you called up they would say it's not for rent. I figured it had to be to claim that it was "available for rent" in some technical sense, but I didn't know why.

In others they would just have too high a price, and it is still empty six years later so they are clearly not unaware that they have it priced too high. Simple math showed they would be better off renting at a lower price than going years without anything, but it was quite common so it didn't seem like it could be simple stupidity.

The test, I guess, of this explanation is whether or not the flow of money out of private credit causes the end of "extend and pretend", and the market finally clears.