I’ve thought for years that the growing number of commercial vacancies, even pre-Covid, would “sort itself out.” It certainly hasn’t yet.
When you look at it as parking of assets as a hedge against inflation it makes more sense what is going on.
But taxes you might say. They charge dumb rents on these places. So if you get a sucker willing to pay a way over priced rent for say 6 months or a year it may cover the taxes for 10-20 years. Meanwhile the cash value has usually at least matched along with inflation. Even if they do not cover with a sucker the rate of inflation may be higher than the taxes. Plus the possibility of buying into a 'hot market' and the value does actually increase (but that is speculation which is some of it).
Why the 'dumb' rent why not have a reasonable one? Because they do not really want to rent. They do not want to deal with 'hey landlord the roof needs to be replaced again'. They want to deal with that when the time comes to liquidate it for whatever reason.
Many people look at like the are running a property business. There are many of those types of companies out there (which is why they can play this game). But there are many people just looking to 'not be poor' and live off daddies money for the rest of their lives from their trust fund.
If you change the zoning at a sufficient scale, rents would be expected to decline permanently, so there would be nothing gained by holding out until tomorrow.
This partly explains why I saw -- with two temporary-by-design blips -- a particular downtown San Jose corner location empty for 10 years. Last I saw, they finally rented it out as an office, but that was just shy of Covid19.
Apparently a decade is the minimum for "wait for better demand" or they had//have pockets deep enough to play a long game.
I just don't understand how some people are happy with empty store-fronts. "I want the blightful eyesore, not the bustling tax money" doesn't make sense to me.