Foreign-ness of the investment capital may be important to the perceived moral valence if the transaction, but money is money. The strategy of squatting on vac

Foreign-ness of the investment capital may be important to the perceived moral valence if the transaction, but money is money. The strategy of squatting on vacant property is essentially patience. For it to pay off, you do have to eventually rent it out (or sell it) when you think prices are high enough. For example, if you have deep enough pockets you might move during a recession, but wait until the recession is over to sell your old house, because you get a better price. If you never sell it, you’re tying up capital for no reason. The higher interest rates are, the more you’re losing in opportunity cost by owning a vacant building. Patience has probably been especially abundant in this decade of historically low interest rates. Since no tax rate is 100%, a writeoff is never as good as a profit. It only softens the blow, which might extend the landlord’s patience in waiting for rents to cycle back up to $2800. Another thing that happens is the project’s financing is contingent on a certain average rent, but the contract doesn’t factor in $0 rent empty units, just leaves them out of the calculation. This is essentially a bug. It’s one reason landlords give signing bonus concessions instead of just lowering the rent. In markets seeing runaway costs, vacancy is at historic lows. No one is investigating this too thoroughly because fixing it wouldn’t be very fruitful.