Empty commercial units and Maint costs

In a lot of Coops the retail space is not owned by the Coop so they aren't being affected at all.

In my building, the retail space is part of the co-op - the owner of all the retail space is a shareholder, and pays maintenance - whether the space is used or not does not affect the co-op's finances (unless the owner goes under). In our case, the owner happens to be a large public investment fund, with a very long-term view, and the likelihood of them going under is viewed as minimal (given their size, who they are investing for, etc.). In many buildings, the 'commercial' doctor's offices are also shareholders.

The due diligence you need to do is fully understanding the relationship between the co-op and all their 'commercial' / 'retail' / 'professional' spaces, and how the money flows between them.

Aaron2,
That's unusual because usually you can't assign Coop shares to commercial spaces in residential building unless they can be easily converted to residential space. What is much more common is the commercial space is part of a 2 unit Condominium, where the residential unit is then divided into Coops.

I've seen it where the Sponsor held on to the retail space after going Coop. So Coop has to deal with all the nuisance of the retail space (the worst being restaurants) without getting the benefit of increasing rents, etc., from the retail.

Usually it is even worse as the share allocation to sponsor owned retail is typically less than its real share of assessed property taxes.

"Held on to" is kind of nebulous: before 1980 many Sponsors wrote themselves 99 year below market master leases known as Sweetheart Leases because you couldn't issue shares to Commercial space which could not be easily converted to residential (like most professional spaces in apartment buildings). Then following the Condominium and Cooperative Conversion Protection and Abuse Relief Act of 1980 NY took it further and banned these Sweetheart Leases as well. Not wanting to lose out, Sponsors switched to CondOps where instead of taking long term leases on those spaces, the just took fee simple ownership of them as Condominium units.
However, allocation of Percentage of Common Interest apportionments still only had to be done "rationally and reasonably," so you had Sponsors doing things like when MJ Raynes tried to justify the allocation to the garage space at Lincoln Towers based on "Utility Usage" when the only things in the garage were a couple of bare lightbulbs hanging from the ceiling so the garage which held hundreds of cars used less electricity than the refrigerator in one studio apartment.

"Usually it is even worse as the share allocation to sponsor owned retail is typically less than its real share of assessed property taxes."

300, this is exactly what happened in the first building we ever bought into. They paid far less than everyone else for the garage, not to mention there were 3 retail food spaces, including a McDonald's which was a nightmare of traffic, trash, etc.

without getting the benefit of increasing rents, etc., from the retail

10023, except in most cases, rents are declining for retail space.