Posted on 05/16/2023 9:07:55 PM PDT by george76
Uptick in troubled office-building sales indicates more owners believe weak demand is here to stay
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Property owners are starting to unload troubled office buildings at fire-sale prices, 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 the firm paid in 2014 ... Principal Financial Group sold a Parsippany, N.J., office building for $14.3 million, down from the $52 million it paid in 2008
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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.
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the office sales market has been moribund. Investors purchased only $10.7 billion worth of office property in the first quarter of this year, down 68% from the same period last year.
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troubled office-building sales indicates that more owners believe that weak demand is here to stay. The volume of distressed office deals is expected to rise even further in the months to come, as billions of dollars worth of mortgages need to be refinanced.
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Listings of office buildings for sale are also rising. “Office inventory is growing,” said Steven Jacobs, president of Ten-X, one of the biggest auctioneers of commercial property online. “Investors want out.”
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In the first quarter of this year, 26 office buildings were taken over by creditors in foreclosure actions, compared with six in the first quarter of 2022
(Excerpt) Read more at wsj.com ...
It used to be that you were among the elite of real estate investors when you owned prestigious Manhattan, ChiCongo and San Fran Sicko office towers. The crown jewels of modern urban civilization. Now you are a chump. You know who are heavily invested in them? Your major insurance corporations.
Buying up Green Acres, where the yokels live, was a better bet, Go ask Bill “The Virus Hunter” Gates.
The Leaning Millenium Tower in San Francisco might be worth $1 soon.
Time for conversions to residential
...or Street squatters will soon be there.
OK, they can convert these towers in the homeless shelters and make sure there’s at least one window on each floor open for those who want to just jump out
In the past it was the Japanese who’d buy them
Then it was OPEC that had the cash to do so.
Perhaps now it will be the drug cartels
They supposedly anchored the tower to bedrock.
That is ALOT of “LOSS CARRY FORWARD” for future income tax returns
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