Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why do commercial spaces sit vacant? (2025)

freerange.city

Post reply on HN
Print view View original

251–258 of 258 posts

Re: Why do commercial spaces sit vacant? (2025)

#251

Post by em-bee »

grebc wrote: post #208
BrenBarn wrote: post #204

Earlier quoted context omitted.

Well, sort of. One scenario is to say "it is illegal to let your property be vacant (for more than X months etc. etc.)". Then suddenly all these owners are violating laws. Another is to say "it is illegal to hold more than $100 million of wealth". Then a bunch of rich people are in violation. Laws are what we make them. The point here is that the current laws are inadequate to produce the society people want to live…

No one is getting that law across the line in any sane country, I’m not even sure why the conversation has veered this far off-topic. Suddenly because some people here do not like commercial vacancies all of a sudden laws are changing so properties are never vacant. Can’t wait for people here to begin arguing Elon should just sell/give up his equity because Starship hasn’t launched successfully yet. Not everything ne…

well i am not from a sane country i guess. keeping homes vacant is already illegal in germany in most places, and laws against vacant commercial properties are being discussed.

this is not just about how commercial property works, but this is about how urban planning works.

you keep insisting that i am a non-interested party. i am speaking for the city and the community. please explain to me how they are non-interested parties.

the needs of the community outweigh the needs of land and building owners. as an owner you are to serve the community. if you don't want to do that then you have no business being part of that community. we'll try to work with you to find an amicable solution, but if you refuse and leave your building abandoned then we can force you to sell. laws to that end already exist. they are used sparingly, but they are there if we really need them.

Re: Why do commercial spaces sit vacant? (2025)

#252

Post by dzonga »

people like to complain about strip malls or those little office parks.

this is why those win - it's cheaper to build & maintain them & easier to turn a profit on them.

the fancy big glass downtown skyscrapers are mostly for ego.

usually the tallest one determines who has power in that economy/city.

way back then churches used to be the tallest.

now in most cities it's the banks.

in SF - it's SalesForce Tower i.e tech is dominant

Re: Why do commercial spaces sit vacant? (2025)

#253

Post by rossdavidh »

senordevnyc wrote: post #166
rossdavidh wrote: post #157

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 tu…

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?

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.

Re: Why do commercial spaces sit vacant? (2025)

#254

Post by limagnolia »

flurben wrote: post #231
prepend wrote: post #220

Earlier quoted context omitted.

Property tax isn’t based on vacancy rate, it’s based on property value. The article writes a bit about property value being based on rents. So a completely rented building pays the same property tax as an empty building with no renters.

I used to think the same thing, until recently. Where I live (NC, USA) there was a big issue where commercial property owners have been able to reduce their property tax assessments, not on the basis of 'comparable sales' (like everyone else), but on the basis of the income derived from the property. I can't say how widespread this practice actually is, but it's not unheard of. Apparently property tax rules are going…

It would be absolute stupidity for a property owner to keep a property vacant solely to reduce the property tax assessment. Certainly there are some stupid rich people... but I doubt that the majority are that stupid. There must be some other explanation.

Re: Why do commercial spaces sit vacant? (2025)

#255

Post by stevage »

solomonb wrote: post #148
LoganDark wrote: post #146

Earlier quoted context omitted.

> The other side of this is that landlords hate to reduce rent to rent vacant spaces because their paying tenants will demand rent reductions or move. Since when have tenants known each other's rents?

The current tenants will see the listing for the vacant unit.

This is how I got a rent reduction in my flat during the pandemic.

Re: Why do commercial spaces sit vacant? (2025)

#256

Post by em-bee »

grebc wrote: post #236
AnthonyMouse wrote: post #210

Earlier quoted context omitted.

It's not a matter of whether I like it. It's a question of why the bank, unless required to do so by some kind of absurd perverse regulatory incentive, would do something which is not only harming others but also increasing the default risk for the bank by reducing the income of a borrower who, if they can't make the payments, will cause the bank to have to write off millions of dollars by foreclosing on an underwate…

Harming others is a stretch. You’re also assuming every vacancy has this pigeon holed financial setup. A LOT of commercial property is freehold. I’m honestly at a bit of a loss that people feel they can tell others what to do with their property because it’s vacant. That’s not how society works, and it won’t change to that either.

if the society decides that they don't want properties to stay empty, then that's exactly how it works. and yes, it will change to that if people want it. german cities are already discussing options how to motivate owners to fill their properties through various incentives including legal ones.

Re: Why do commercial spaces sit vacant? (2025)

#257

Post by grebc »

em-bee wrote: post #256
grebc wrote: post #236

Earlier quoted context omitted.

Harming others is a stretch. You’re also assuming every vacancy has this pigeon holed financial setup. A LOT of commercial property is freehold. I’m honestly at a bit of a loss that people feel they can tell others what to do with their property because it’s vacant. That’s not how society works, and it won’t change to that either.

if the society decides that they don't want properties to stay empty, then that's exactly how it works. and yes, it will change to that if people want it. german cities are already discussing options how to motivate owners to fill their properties through various incentives including legal ones.

Good luck!

No one was really discussing in a EU context though.

Re: Why do commercial spaces sit vacant? (2025)

#258

Post by Nevermark »

AnthonyMouse wrote: post #209
Nevermark wrote: post #160

Earlier quoted context omitted.

The problem is the bank didn’t leave a buffer to meet their requirements, so arbitrage between reality and official reality comes to the rescue. If a bank only loaned 60% of a buildings value, it could be devalued, the operator would eat the shortfall, but the bank could reappraise, with the loan continuing as before. [So a regulation setting a banks maximum loan percentage, at a percentage less than they are require…

> The problem is the bank didn’t leave a buffer to meet their requirements They did though. It was a $20M building and they only loaned out $16M, providing a $4M buffer. It isn't possible to require an amount that the value of the building could never fall below under any circumstances because that would require the loan amount to be zero. It's always possible for the value of the property to crash, e.g. it becomes c…

> They did though. It was a $20M building and they only loaned out $16M, providing a $4M buffer

The problem is the bank is regulated to only maintain loans at 80% of property value or lower.

If they give a loan at the maximum allowable level, they don't have a (legal) buffer.

Thus the strong incentive to perform creative bookkeeping, to avoid having to repossess property they don't want. Instead of simply recognizing the falling property value in their accounting, which without a forced call, is the property owners loss, not theirs.

Post reply on HN