Why do commercial spaces sit vacant?

# Summary Commercial real estate landlords often keep spaces vacant for years because lowering rent would trigger bank foreclosure due to how commercial loans work. Unlike residential mortgages, commercial property values are determined by projected income rather than market prices, and loans are structured as short-term balloon notes rather than long-term amortized mortgages. Both landlords and banks prefer to "extend and pretend"—leaving buildings empty while hoping market conditions improve—rather than accept foreclosure, even though this generates zero revenue.