> Interesting, but It doesn't answer why a bank would hold a completely vacant building for 15 years.
I had the exact same question before I fully read the article.
This is answered in the article in the "Extend and Pretend" section.
> "And so long as the operator can afford to keep losing $140k per year on the building… they can!"
> [...]
> "The only sticking point here is that the building operator is still losing $140k per year. But remember that, if he gives up, he loses the $4 million he’s already put into the building. Even if he ended up paying $140k per year for 10 years before things turned around, losing $1.4 million is still better than losing $4 million."
Extending the article's example to a scenario where the building was vacant for 15 years, it means the operator was willing to lose $140K per year. In the 15 year scenario, the operator lost $2.1 million ($140K * 15 years) which is still better than losing the $4 million if the operator walked away from the investment.
> Anything that makes owning an empty building a bad investment in all circumstances.
In the final section "This Sucks, What Could We Do About It?", it mentions how adding a vacant store font tax would end up creating more foreclosures. This is the side effect of the financialization of real estate.
I had the exact same question before I fully read the article.
This is answered in the article in the "Extend and Pretend" section.
> "And so long as the operator can afford to keep losing $140k per year on the building… they can!"
> [...]
> "The only sticking point here is that the building operator is still losing $140k per year. But remember that, if he gives up, he loses the $4 million he’s already put into the building. Even if he ended up paying $140k per year for 10 years before things turned around, losing $1.4 million is still better than losing $4 million."
Extending the article's example to a scenario where the building was vacant for 15 years, it means the operator was willing to lose $140K per year. In the 15 year scenario, the operator lost $2.1 million ($140K * 15 years) which is still better than losing the $4 million if the operator walked away from the investment.
> Anything that makes owning an empty building a bad investment in all circumstances.
In the final section "This Sucks, What Could We Do About It?", it mentions how adding a vacant store font tax would end up creating more foreclosures. This is the side effect of the financialization of real estate.