Why do stores and malls let so many storefronts stand empty for months or years? Wouldn’t having tenants bringing in SOME money be better than leaving the property to rot and generate zero rent?

It’s because commercial loans do not work like private mortgages. They refinance more frequently (every 5–10 years), and the value and loan terms are set by the property’s Net Operating Income (NOI) as well as the quality and length of leases. Loan covenants are also a factor. Many lenders require consent for below-market rents or very short terms.

As implied above, however, the overriding reason that commercial spaces sit empty is that locking in a low rent on a long lease can knock millions off the property value and jeopardize the next refinance. And since refis can be as frequent as every five years in CRE, this is not a trivial concern.