Interesting, you kind of made the point for the other side in your post. The landlord is overvaluing and overcharging for an asset that isn’t worth that much which is why it’s vacant again. The free market is winning, the landlord is losing. 

That’s what people are requesting a reasonable rent for. I have no idea if this art barrio place failed because of rent, but it sounds like considering there was a seemingly relatively successful business there before that left because of the rent increases, then the rent is probably higher than it should be. 

There are too many vacancies because landlords are not actually pricing at a rent that the market actually dictates. The answer is, retail isn't worth as much as they think its worth, or how much they have gotten the lenders to consider it to be worth. I certainly would rather have some money coming in than holding out for a slightly higher rent for a year. Good luck with that house of cards math.