This whole premise seems pretty scammy. The owner isn’t paying for the property with their own money, the bank is mostly not using their own money as it was newly created by the loan, but they both get to share in the value of what was bought with it, just because they are a bank and a rich person. But now since the factual and legal premises of the loan are turning out not to be true, they collude with each other to hopefully keep it anyway if circumstances change.

This just isn’t a good system for deciding who gets to own buildings in important locations to begin with. Even if everything had worked out and rents were kept at market rate with active businesses operating out of the building for the full duration of the loan, that’s still a bad outcome because it means that the wealth disparity that is the core problem of our society has gotten that much worse, and the beneficiaries weren’t even really limited by their own capital.