This video talks about why New York city real estate is going unrented for years, and why the rent is never lowered. The building mortgage is placed into a mortgage back security. The security is sold to multiple investors. They now have control of how much rent costs. Unrented space doesn't lower the value of the building because rent can be added at the end of the mortgage. If the rent is lowered the mortgage is in default because the building value is lower. That would require the owner of the building to write a huge check to make up the difference. Since they can add rent to the end of the mortgage that's what they do, instead of taking the out of pocket loss. The result is, there could be one space in the building that has rent so high that no one could ever pay it. It keeps the value of the building high enough to stay out of default.
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