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Fire-Sale Pricing Comes to Office Investment Sales
Commercial real estate owners are starting to unload troubled office buildings at fire-sale prices, in what the Wall Street Journal reported as a sign that the office market slump is moving into a new phase where more landlords are ready to capitulate.
In recent weeks, Blackstone sold the Griffin Towers office complex in Santa Ana for $82 million, or about 36% less than it paid in 2014, people familiar with the matter told the WSJ. Principal Financial Group sold a Parsippany, NJ office building for $14.3 million, down from the $52 million it paid in 2008.
The tower at 350 California in San Francisco, valued at $300 million in 2019, is expected to trade at about $60 million, or roughly 80% below that previous valuation.
Listings of office buildings for sale are also rising. “Office inventory is growing,” Steven Jacobs, president of online auction platform Ten-X, told the WSJ. “Investors want out.”
Pictured: Griffin Towers.
- ◦Sale/Acquisition
