Living in SoCal, I almost always prefer to order online. Most local businesses are losing to their e-commerce competitors; no wonder commercial spaces are empty.
I have a side business of a small e-commerce shop. I would consider having physical space just for the sake of luxury, but now I would rather spend that monthly rent on marketing online rather than paying for physical space.
IMHO, that's what is happening. Bank problems or anything else are secondary; if it were profitable to be at the physical location for the businesses, other factors would vanish.
The article applies to all kinds of loans for property though.
Apartment complexes could also be 50% vacant and still "worth" their original value if the asking rents remain high.
Office buildings that got cleared out after covid, same thing.
Brick and mortar retail are the same.
The article is more of a criticism of how asset values are calculated and loans are managed to avoid foreclosure. Which results in financially valid buildings/loans that are underutilized because the other option is creating economic equilibrium at the cost of lenders and debt holders.
I have a side business of a small e-commerce shop. I would consider having physical space just for the sake of luxury, but now I would rather spend that monthly rent on marketing online rather than paying for physical space.
IMHO, that's what is happening. Bank problems or anything else are secondary; if it were profitable to be at the physical location for the businesses, other factors would vanish.