They provide the capital so that building exists. If there weren't a chance or probability for it to generate income and to increase in value. A few would pay for it in first place and even then only for personal use. Thus resulting to system where to start business you first must outright build the building with loans or buy from some failed place. As no one would build for you to rent.
So their role is increasing the scarcity/cost of property?
Remember a landlord is not a developer or builder - they generally buy property that already exists.
I think what you are saying is that the property wouldn't be available to rent, BUT would be available to buy at a potentially lower price (as buyers wouldn't be competing with rent extractors/landlords)?
I know we are talking commercial property here, but look at the market in Sweden, where renting property to live in for more than a month is illegal in most cases. The cost for a young person to buy their first flat (often with family support) is low. The country operates fine with very limited rental. People still build property, young people still get to live.
