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U.S. Office Sector Investment Sales Begin Surging Again
Arguably the last major commercial property sector to rebound from the COVID-19 pandemic, office is now coming back into vogue among investors, the Wall Street Journal reported. The volume of U.S. office building sales increased to $63.6 billion in 2024, up 20% from 2023, according to MSCI. Although that figure pales against the $142.9-billion annual average between 2015 and 2019, it marks the sector’s first year-over-year increase since 2021.
Some investors are buying premium-quality buildings burdened with debt or scooping up half-empty towers for pennies on the dollar, reported the WSJ. Others are bidding on obsolete office properties for conversion to apartments. Some big foreign investors are showing renewed interest, coming in ahead of what they believe will be an even larger surge of buying later in 2025.
“People are making their bets,” Gary Phillips, managing director of Eastdil Secured, told the WSJ. With nearly $200 billion of dry powder stored up by opportunistic funds, brokers expect sales activity to continue accelerating.
Pictured: 405 Howard St. in San Francisco, part of an eight-building portfolio for which Norges Bank Investment Management paid $977 million to take full control at the end of 2024.
- ◦Sale/Acquisition
