This tallies with my intuition for why it’s often more profitable to leave commercial properties vacant. The operating costs to maintain an empty office building are really not that high.

Two takeaways that are essential:

• Commercial real estate is a financial product much more than it is a building for humans to use and its financing is structured in ways that you can’t understand if you take residential property as a reference.
• Commercial leases are long term (in the Netherlands often 5+5 years) which means that if you settle for a lower rent than you had planned for, that then becomes locked in for half a decade or more.

This knowledge is especially useful in Berlin right now since we have many commercial properties that were built in the past 5-10 years flooding the market, all sitting empty (I live next door to one) as Berlin and the entire German economy goes into a slump. The only thing the operators of these properties can do right now is to have faith that ‘the stimulus money is coming’.

This is also why it’s hard to convert offices into housing. It’s not so much about the architecture being unsuitable as it is about the financials not making sense anymore in such a scenario.

https://www.freerange.city/p/why-do-commercial-spaces-sit-vacant