Commercial interests would rather tear down all the appurtenances on land rather than rent improved properties at a loss. Thus the improved properties become ever more scarce, resulting in either bidding the rents still higher, or moving to lease of land only, and the lessee builds the improvements necessary to conduct business, only to lose title to them altogether should the land lease end.
1. It would seem to me that in a traditional commercial lease, the only properties that would rent "at a loss" even with a steep reduction in rent are those that were purchased or refinanced in the last 5-7 years.
2. A property tax appeal for a commercial property in rent default should effectively reduce the assessed value of the property to little more than the value of the land plus the salvage value of the improvements.
3. Conversions to residential use would seem to be an ideal alternative for any landlord in this situation.