We work and Regus dedicated offices in main location are empty and crazy expensive. I wonder why they don’t reduce their prices.
It's worse.
They're often in technical default of their loan terms if rents fall below a level. From the landlord's perspective, leaving units empty and waiting for a turnaround is rational: it preserves option value. For the lender, the limit provides an objective signal of hardship ex ante. Ex post facto, they're riding the same option value as the landlord, provided the payments come through.
This is also true in a bank run. Yet those still happen. And I don't think it's because commercial landlords are more altruistic or forward-thinking than depositors.