Andante I do think you misunderstand.
SRV lease a whole floor so any vacancy is space they are leasing but getting no income. The admin and lease costs per floor are pretty much fixed; for example they may need 40% occupancy to cover lease and admin costs for a particular floor.
It follows if they have 60% occupancy the profit margin is the 20% occupancy above cost neutral. Each additional % above cost neutral numbers goes to the bottom line (profit).
If they reduce customer rental rates to increase occupancy this still goes to the bottom line as SRV's costs are pretty much fixed.
The reason SRV may be reluctant to get into a price war is they offer premium office locations with premium service so don't want to damage their brand. It would be like a premium wine brand selling cheap to increase sales and then trying to put prices back up again.
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