> and apparently (for a reason I don't fully understand) landlords felt it better to have spaces remain vacant than to lower rents.

As I understand it (but I'm not sure how applicable this is to any specific place), landlords can write down a loss set by either the last rent they received or the market rate in the neighborhood. If those losses are offset by gains elsewhere, they can zero their tax bill -- which, for landlords with diversified holdings, may be very large.