alt Hacker News>AFAIK Commercial is priced at a multiple of rent. So when an owner still has a loan on a building that was based off of multiple of 3000/mo and decides to rent it out for 1500/mo it effectively cuts the value of that building in half.
Well, if the town is dying, the "value of that building" is effectively cut in half, or worse, anyway. Asking a lot for rent is not gonna magically make the building worth more - it will just keep it unrented.
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tardedmeme • yesterday at 10:00 AM
It's not just accounting, it means enough things that they're incentivized to manipulate it upwards. It impacts the loans they can get and the interest they pay, enough that it may be worth it to forego some actual income to keep the fake numbers up.
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Accounting rules allow you to extend and pretend which is common in commercial. Because loans are sucuritized by other assets there can be a lot of different assets that could all suddenly become distressed just by pricing down rent in one building