From what I understand, the situation has become more complicated than the scenario of “landlord owns property, wants to make money on rent”. It’s now, “landlord simultaneously rents space to tenants and sells interest in the property to investors.” Because the landlord is dealing in two markets simultaneously, the optimal decision for the landlord may look inefficient if you look at a single market.

The empty storefronts are bad, for sure. But to the landlord, reducing rent in order to generate additional income may revalue the property and put it underwater, which triggers clauses in the deals with investors and banks. And as far as I can tell, the whole thing is driven by how balance sheets can be presented to investors and banks, as much as it is driven by how properties can be rented to businesses.

My personal take is that this system killed SoHo. I also don’t understand anything about real estate ¯\_(ツ)_/¯